Ukraine’s airport reconstruction will not be financed by any single instrument. It will be assembled — concession structures, IFI debt, donor facilities, and eventually private equity — and every one of those channels runs on due diligence. Having spent the past months mapping the legal terrain of Ukrainian airport recovery for a domestic audience, I want to translate two findings for the readers who will actually sit on investment committees and advise on concession tenders. One is a contingent liability that standard airport due diligence in this region systematically misses. The other is a premium that most financial models are still pricing at zero.
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In short: two items are routinely mispriced in Ukrainian airport deals. Carrier discount-and-marketing packages can amount to State aid, and Ukraine already has the statute and the enforcement authority to treat them that way, so a deal signed without a dated profitability analysis can become a liability the buyer inherits. On the other side, the draft EU aviation guidelines would add up to 20 percentage points of permissible aid for zero-emission and ground-power infrastructure, and an airport rebuilt from damage is placed to claim it in full.
The liability: airline agreements as contingent State aid exposure
The first commercial documents a reopened Ukrainian airport will sign are agreements with carriers — and for regional airports, that means low-cost carriers arriving with a standard package: deep discounts on airport charges plus separate “marketing” agreements payable to the carrier’s own subsidiary. European enforcement history shows exactly what this construction can become. In the Commission’s French airport decisions of 2014, discount-plus-marketing packages at Pau, Nîmes and Angoulême ended in recovery orders against the carrier and its marketing subsidiary — at Nîmes and Angoulême with the two made jointly liable for repayment — and with interest running from the date the aid was placed at their disposal. At Nîmes alone the Commission put the undue advantage at around EUR 6.4 million, on agreements going back to 2002. In the Klagenfurt proceedings, closed by the Court of Justice only in November 2023, twenty-one years separated signature from final judgment, and the ten-year limitation period was held to restart with each Commission request for information concerning the aid. The economics are asymmetric by design: aircraft are mobile assets, and runways are not, so recovery formally addressed to the carrier lands, commercially, on the airport.
What makes this a live Ukrainian issue rather than an EU analogy is that the machinery already exists domestically. Ukraine’s State Aid Law No. 1555-VII mirrors Article 107(1) TFEU, designates the Antimonopoly Committee (AMCU) as the enforcement authority, and — via the Association Agreement — makes Commission and CJEU practice the source of interpretation. This is not prospective: in August 2021, AMCU’s administrative panel assessed investment support for Kherson airport by direct application of point 85 of the 2014 Aviation Guidelines, and sector-specific admissibility criteria for civil aviation aid — covering airport investment and operating aid and route start-up support — have been in force since January 2024 as Cabinet Resolution No. 26.
Martial law and State aidThe wartime regime goes further than a pause in procedure. Under point 5-2 of the Law’s final provisions, the notification, review and recovery provisions (Articles 6, 7 and 9 to 16) do not apply while martial law is in force, aid granted in that period is declared admissible, and grantors need not notify aid granted during martial law or within one year after it ends. The admissibility attaches to aid granted while martial law lasts; deals signed after it ends are again subject to the Law’s admissibility rules.
For a diligence team, the practical consequence is a checklist item that rarely appears in this region’s data rooms: reconstruct every airport-carrier relationship as a single economic transaction — charges agreements, marketing agreements, side letters, subsidiaries on both sides — and ask whether a dated, ex ante incremental profitability analysis existed at signature. Where it did, the package is defensible under the market economy operator principle and is simply not aid. Where it did not, and the aid was granted outside the martial-law window, the target carries an unquantified contingent liability with interest accruing, and the purchaser inherits it. The same logic extends to cumulative de minimis exposure per carrier and to the absence of review clauses in long-dated packages. I have set out the broader transactional checklist for Ukrainian airport investments in a separate due diligence article; airline agreements deserve their own line in it, priced, not footnoted.
The premium: decarbonisation as a funding multiplier
The second finding runs in the opposite direction. The draft EU Aviation State aid Guidelines, consulted on in mid-2026 and scheduled to apply from April 2027, tighten most parameters of airport support — investment aid is confined to airports with up to 3 million passengers a year, and start-up aid for new routes is abolished outright; we have looked separately at what that means for rebuilding Ukraine’s regional airports. But inside the tightening sits a mechanism that matters for reconstruction economics: aid intensity bonuses of up to 20 percentage points for infrastructure dedicated to aircraft with zero tailpipe CO2 emissions or to fixed electrical ground power and pre-conditioned air for parked aircraft, alongside a requirement that investment aid creating new capacity be conditioned on a credible decarbonisation plan. Sustainability, in other words, converts directly into additional permissible public co-financing. In parallel, Regulation (EU) 2023/1804 (AFIR) already makes fixed electrical ground power a regulatory obligation for TEN-T network airports — at all contact stands by the end of 2024 and at remote stands by the end of 2029, with the power drawn from the grid or generated on site without fossil fuels from 2030 — which sets the design benchmark donors and lenders will finance to, whether or not the Regulation formally binds Ukraine on signing day.
Here, Ukrainian assets have an advantage that warrants a line in the model rather than a paragraph in the ESG annex. A European airport retrofitting to zero-emission operations pays twice — decommissioning working infrastructure and building new. A Ukrainian airport rebuilding from damage faces greenfield decarbonisation economics: no replacement cost, full bonus eligibility, and a design horizon that starts inside the 2027 framework rather than migrating into it. Lender expectations point the same way. Since January 2023, all EBRD operations are aligned with the Paris Agreement by shareholder resolution, with green finance targeted at over half of annual business volume; IFC applies its Performance Standards as contractual conditions. For an asset that will be financed by these institutions, net-zero design is not a virtue signal — it is a bankability condition, and an asset engineered to it clears investment committees that a conventional design will not.
Where the two lines meet: charges, consultations and the till question
The liability and the premium converge at one structural decision that is easy to defer and expensive to revisit. Green capital expenditure recovered through airport charges will eventually pass through Ukraine’s implementation of Directive 2009/12/EC on airport charges — mandatory airline consultations, methodological transparency, non-discrimination. The first party to test a green surcharge will be the same low-cost carrier that negotiated its incentive package on day one, and its question will be precise: why should it pay for electrified stands its aircraft never required? The defensible answer depends on a choice made at financial close, not at the consultation table: the single till / dual till allocation — whether commercial revenues share the burden of aeronautical capex or aviation finances itself. Concession documentation that fixes the till model, ring-fences green capex accounting, and embeds the charging methodology before the investment is committed converts a future dispute into a disclosed term. Documentation that leaves it open hands the first objecting carrier a regulatory lever.
Structuring a concession or a carrier incentive package for a Ukrainian airport? Send us the draft charges methodology or incentive terms — we will test them against the market economy operator principle and the till model before they are signed.
What this means for transaction structuring
Four disciplines follow, none of them exotic. Carrier agreements should be short-dated with built-in review, incentives tied to delivered traffic with clawback, and each package supported by a dated market economy operator dossier — the single document that determines whether the arrangement is aid at all. Incentive policy is best published as an objective scheme rather than negotiated bilaterally: openness removes selectivity, the most dangerous element of the aid construction, and survives the coming charges framework intact. Green design belongs in the base case — decarbonisation plan in the reconstruction documentation, AFIR-compliant ground power in the engineering brief, EBRD and IFC alignment evidence in the financing pack. And the archive is the asset: in every European precedent worth citing, what decided the case a decade after signature was not what the parties remembered but what they had dated and filed.
JVS Law viewUkrainian airport assets will reward the diligence teams that price both lines — the contingent liability nobody lists and the regulatory premium nobody models. JVS Law works on both sides of that ledger.
Frequently asked questions
Can an incentive deal between a Ukrainian airport and a low-cost carrier be State aid? Yes, if the package fails the market economy operator test. Ukraine’s State Aid Law mirrors Article 107(1) TFEU and the AMCU enforces it; what keeps a deal out of the definition is a dated, ex ante incremental profitability analysis showing the package made commercial sense for the airport at signature.
Are agreements signed during martial law protected? Under Ukrainian law, largely yes. Aid granted while martial law is in force is declared admissible and need not be notified, and the notification exemption also covers aid granted within a year after martial law ends. Aid granted after martial law ends is again subject to the Law’s admissibility rules.
Do the new EU aviation State aid guidelines apply in Ukraine? Not directly. They are still an EU draft, with adoption planned for early 2027. Ukraine applies its own criteria under Cabinet Resolution No. 26 of 2024 and, under the Association Agreement, reads its State aid rules in the light of Commission and CJEU practice. In practice the EU guidelines and AFIR set the design benchmark donors and lenders finance to.
What should a buyer of a Ukrainian airport check in the carrier agreements? Rebuild every airport–carrier relationship as one transaction — charges agreements, marketing agreements, side letters and subsidiaries on both sides — and ask for the dated profitability analysis that existed at signature. Where it is missing, price the contingent liability, with interest running.
The EU aviation State aid guidelines discussed here are still a draft; the Commission plans to adopt them in the first quarter of 2027. This note is not advice on any particular transaction. JVS Law advises on airport and aviation infrastructure projects in Ukraine and on aviation and asset finance in Ukraine.