The European Commission has agreed that a Greek “aid measure” of EUR6.8 million euros (USD7.16 million) compensating Ellinair (ELB, Thessaloniki) for damages sustained from the coronavirus pandemic complies with revised European Union state aid rules, the regulator said in a statement on May 3.

Ellinair suspended flight operations last autumn, returning its fleet of one A319-100 and three A320-200s to lessors. Shortly afterwards, in November, its ailing parent, Greek leisure specialist Mouzenidis Group suspended the activities of all of its Russian legal entities including Moscow-based tour operator Mouzenidis Travel.

The measure the European Commission has now approved, which will take the form of a direct grant, is meant compensate the airline for damages suffered between March 18 and June 30, 2021, due to travel restrictions imposed by Greece and other countries to limit the spread of Covid-19.

As a result, “the airline experienced a sharp drop in traffic and profitability,” the statement said.

The commission explained that it had assessed the assistance under antitrust rules it had eased with the onset of the pandemic, which enable it to approve state aid member states provide to compensate specific companies or sectors for the impact of exceptional occurrences.

“The commission considers that the coronavirus outbreak qualifies as such an exceptional occurrence, as it is an extraordinary, unforeseeable event having significant economic impact. The commission found that the Greek measure will compensate damage that is directly linked to the pandemic. It also found that the measure is proportionate, as the compensation does not exceed what is necessary to make good the damage,” it concluded.