The European Commission has approved plans by the German government to exempt selected passengers to and from certain German islands from an air transport tax under the EU Treaty's rules on State aid. Article 107(2)(a) of the Treaty on the Functioning of the European Union permits aid of a social character, providing that it is granted to individuals on the basis of conditions where there is no discrimination related to the origin of the products or services concerned.

Since 1 January 2011 all passengers departing from German airports are subject to an air transport tax. An exemption is available to residents of the North Sea and Baltic Sea islands. It also applies to medical flights and civil servants working on islands that face a connectivity problem due to ferries that can only run at high tide and in good weather conditions. Germany has also agreed to extend the tax exemption to flights between the domestic islands and other EEA destinations.

“Whilst State aid rules should be strictly implemented to ensure an undistorted air transport market, this decision demonstrates that it is possible to have aid of a social character provided it benefits individuals and not specific undertakings”, noted Joaquín Almunia, Vice-President of the Commission and Commissioner for Competition.