EC Approves State Aid for Two Helicopter Programs

 - March 22, 2012, 3:56 PM

The European Commission (EC) is allowing France and Italy to grant aid for the development of two medium-twin helicopters in the 10,000-pound class–the Eurocopter X4 and the AgustaWestland AW169.

Eurocopter will receive €143 million ($186 million) as a repayable advance. It will be repaid in full when an unspecified “pre-defined sales target” is reached. Each additional delivery beyond this target will trigger the payment of a royalty fee to the French state.

In Italy, AgustaWestland will benefit from a €272 million ($354 million) zero-interest subsidized loan, which will be spread over 19 years. The zero interest equates to €94 million ($122 million) in aid, the EC calculated. The European Union’s governing body decided that these measures are compatible with EU rules on state aid, as the planned public funding is “justified and proportionate.” Moreover, the EC deems it unlikely to limit competitors’ willingness to invest. The sector is characterized by “significant scope for technological innovation and high growth prospects.” Therefore, the aid is “unlikely to distort competition,” the EC said.