Summaries of judgments: Ryanair DAC/Commission (T-259/20)

Summaries of judgments made in collaboration with the Portuguese judges and référendaire of the General Court (Maria José Costeira, Ricardo Silva Passos and Esperança Mealha)
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Judgment from General Court (Tenth Chamber, Extended Composition) of 17 February 2021, T – 259/20, Ryanair DAC/Commission

State aid – French air transport market – Deferral of payment of civil aviation tax and solidarity tax on airline tickets due on a monthly basis during the period from March to December 2020 in the context of the Covid-19 pandemic – Decision not to raise any objections – Aid intended to make good the damage caused by an exceptional occurrence – Free provision of services – Equal treatment – Criterion of holding a license issued by the French authorities – Proportionality – Article 107(2)(b) TFEU – Duty to state reasons

1. Facts

On 24 March 2020, French Republic notified the Commission of an aid scheme in the form of a deferral of the payment of civil aviation tax and solidarity tax on airline tickets due on a monthly basis during the period from March to December 2020, accordingly with Article 108(3) TFUE. This aid is designed to guarantee that the airlines holding an operating license issued in France are able to maintain sufficient liquidity until the restrictions, prohibitions on movement are lifted, and normal commercial activity is resumed. With this measure, the French Republic differs the referred tax payment until the 1 January 2021 and then spreads payments over a period of 24 months, until 31 December 2022.

Following that notification, the European Commission adopted, on 31 March 2020, the Decision C (2020)2097 final concerning State aid SA.56765 (2020/N) (‘contested decision’) on which considered that despite the fact that the measure represents an aid according with Article 107(1) TFEU, it is compatible with the internal market in the light of Article 107(2)(b) TFEU.

Subsequently, Ryanair brought an action seeking the annulation of the Commission´s decision. The undertaking alleged four pleas in law. The first plea alleges infringement of the principle of non-discrimination on grounds of nationality and the free provision of services, the second plea alleges manifest error of assessment in the appraisal of the proportionality of the aid scheme at issue in the light of the damage caused by the Covid-19 crisis, the third plea alleges infringement of the procedural rights under Article 108(2) TFUE and finally the fourth plea alleges infringement of the duty to state reasons.

The applicant also applied for the present action to be decided under an expedited procedure under Articles 151 and 152 of the Rules of Procedure of the General Court. On 29 May 2020, the General Court (GC) granted the request.

2. Decision

The GC dismissed the action.

Concerning the plea related to the infringement of the principle of non-discrimination on grounds of nationality and the free provision of services the GC considered that this plea should be rejected. First of all, the GC examined the compatibility of the measure with the internal market and considered that it existed, and it was demonstrated in the contested decision, a causal link between the Covid-19 pandemic, the restrictive measures taken and the damages suffered by the airlines operating in France.  As to the eligibility criterion of holding a French license in order to have access to the deferral planed by the French authorities, the GC enlightened that it concerns an EU operating license issued by the French authorities according with Regulation No 1008/2008 and not a national license. Taking into account the exceptional circumstances, that is not in discussion a discrimination on grounds of nationality as well as the existence of a stable and specific link between the airlines and the French Republic the GC considered an appropriate criterion.

In relation to the violation of the free provision of services, the GC remembered that such freedom in matters related to transports, cannot be examined according with Article 56 TFEU since it is regulated by a special legal regime, more precisely by Regulation No 1008/2008. In this sense, the GC underlined that the applicant did not alleged any violation of the mentioned regulation.

In relation to the alleged manifest error of assessment in the appraisal of the proportionality of the aid scheme was also rejected by the GC. The court stressed that the possibility of an overcompensation should be ruled out considering the amount of damage supported by the beneficiaries of the aid is, in all probability, higher than the total amount of the scheme aid concerned and the commitments by the French Republic to communicate the methodology followed to the Commission.

Moreover, regarding the plea alleging the infringement of the procedural rights under Article 108(2) TFEU, the GC concluded that the allegation has any independent content from the first and second pleas. The court pointed out that since it already carried out an examination to the merits of those pleas it is not necessary to analyse the substance of this plea.

Finally, as regards to the plea of alleged violation of infringement of the duty to state reasons, the GC considered that the contested decision is very clear on the reasons based on which the Commission decided not to raise any objections to the scheme aid notified by the French Republic. The GC emphasized that the figures that led to the definition of the scheme aid objective, the way of reaching it as well as the reasons that justify the amount in question are clearly stated in the contested decision.

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