Case C‑321/21 P

Ryanair DAC

v

European Commission

 Judgment of the Court (Fourth Chamber), 28 September 2023

(Appeal – State aid – Article 107(2)(b) TFEU – Danish air transport market – Aid granted by the Kingdom of Denmark to an airline amid the COVID-19 pandemic – Temporary Framework for State aid measures – State guarantee on a revolving credit facility – Decision by the European Commission not to raise objections – Aid intended to make good the damage suffered by a single victim – Principles of proportionality and non-discrimination – Freedom of establishment and freedom to provide services)

1.        Aid granted by a Member State – Prohibition – Exceptions – Aid compatible with the internal market – Aid to make good the damage caused by natural disasters or exceptional occurrences – Guarantee on a revolving credit facility for a single airline amid the COVID-19 pandemic – Included – Guarantee not benefiting all the airlines adversely affected – Irrelevant

(Art. 107(2)(b) TFEU)

(see paragraphs 18-33)

2.        Appeal – Grounds – Incorrect assessment of the facts and evidence – Inadmissibility – Review by the Court of the assessment of the facts and evidence – Possible only where the clear sense of the evidence has been distorted – Ground alleging distortion of the facts – Need to indicate precisely the evidence alleged to have been distorted and show the errors of appraisal which led to that distortion – Requirement that the distortion be obvious from the documents in the file

(Art. 256(1), second subpara., TFEU; Statute of the Court of Justice, Art. 58, first para.; Rules of Procedure of the Court of Justice, Art. 168(1)(d))

(see paragraphs 53-59)

3.        Aid granted by a Member State – Prohibition – Exceptions – Aid compatible with the internal market – Aid to make good the damage caused by natural disasters or exceptional occurrences – Guarantee on a revolving credit facility for a single airline amid the COVID-19 pandemic – Assessment of the proportionality having regard to the amount of the aid

(Art. 107(2)(b) TFEU)

(see paragraphs 63-67, 71-74)

4.        Aid granted by a Member State – Prohibition – Exceptions – Aid compatible with the internal market – Aid to make good the damage caused by natural disasters or exceptional occurrences – Guarantee on a revolving credit facility for a single airline amid the COVID-19 pandemic – Compatibility of the guarantee with the internal market despite its exclusive nature – Conditions

(Art. 107 TFEU)

(see paragraphs 89-96)

5.        EU law – Principles – Equal treatment – Discrimination on grounds of nationality – Prohibition under Article 18 TFEU – Subsidiary nature in relation to the specific rules on non-discrimination laid down by the FEU Treaty – Article 107(2) and (3) TFEU laying down such specific rules

(Arts 18 and 107(2) and (3) TFEU)

(see paragraphs 97-100)

6.        Aid granted by a Member State – Prohibition – Exceptions – Aid compatible with the internal market – Aid to make good the damage caused by natural disasters or exceptional occurrences – Guarantee on a revolving credit facility for a single airline amid the COVID-19 pandemic – Aid compatible with the internal market pursuant to Article 107(2)(b) TFEU – Assessment of the aid having regard to the freedom to provide services and freedom of establishment – Conditions

(Arts 49, 56 and 107(2)(b) TFEU)

(see paragraphs 118-124)

7.        Aid granted by a Member State – Prohibition – Exceptions – Aid compatible with the internal market – Aid to make good the damage caused by natural disasters or exceptional occurrences – Guarantee on a revolving credit facility for a single airline amid the COVID-19 pandemic – Assessment in the light of Article 107(2)(b) TFEU – Commission decision finding the aid to be compatible with the internal market without initiating the formal investigation procedure – Infringement of the procedural rights of the interested parties – Conditions – Interested parties having to demonstrate the existence of doubts as to the compatibility of the aid with the internal market

(Art. 107(2)(b) TFEU)

(see paragraphs 131-140)

8.        Aid granted by a Member State – Commission decision not to raise objections to an aid scheme or an aid measure – Obligation to state reasons – Scope

(Arts 107(2)(b) and 296 TFEU)

(see paragraphs 144-149)

Résumé

In April 2020 the Kingdom of Denmark and the Kingdom of Sweden notified the European Commission of two separate aid measures for SAS AB, each involving a guarantee on a revolving credit facility of up to 1.5 billion Swedish kronor (SEK) (‘the measures at issue’). Those measures were intended to compensate SAS in part for the damage resulting from the cancellation or rescheduling of its flights after the imposition of travel restrictions amid the COVID-19 pandemic.

The notification of the Swedish aid measure immediately followed the Commission’s approval, under Article 107(3)(b) TFEU, (1) of a Swedish loan guarantee scheme to support certain airlines amid the COVID-19 pandemic. (2) In that respect, Sweden had confirmed that SAS, which was experiencing difficulties in obtaining loans from credit institutions under the Swedish loan guarantee scheme, would benefit either from aid under that scheme or from the new notified guarantee, but not from both measures at the same time.

By decisions of 15 April 2020 (3) and of 24 April 2020, (4) the Commission classified the measures at issue as State aid that was compatible with the internal market pursuant to Article 107(2)(b) TFEU. In accordance with that provision, aid to make good the damage caused by natural disasters or exceptional occurrences is compatible with the internal market.

The airline Ryanair brought actions for annulment of those decisions, which were, however, dismissed by two judgments of the General Court. (5)

The appeals brought by Ryanair against those judgments are dismissed by the Court of Justice, (6) which confirms, in that context, that aid measures adopted in order to address the consequences of the COVID-19 pandemic may lawfully be reserved to a single undertaking, even if its competitors are also affected by that pandemic.

Findings of the Court of Justice

First of all, the Court of Justice confirms the General Court’s analysis that aid granted under Article 107(2)(b) TFEU and intended to deal with an exceptional occurrence may, as in the present case, be limited to a single undertaking to the exclusion of all other adversely affected undertakings.

In that regard, the Court of Justice notes that it is in no way apparent from the wording of Article 107(2)(b) TFEU, read in the light of its objective, that only aid granted to all undertakings which suffered damage caused by an exceptional occurrence could be declared compatible with the internal market.

It is true that if, when examining an aid measure under that provision, the Commission were to find that the selection of the beneficiary is not consistent with the objective of compensating for the disadvantages caused directly by an exceptional occurrence and that it thus meets other considerations unrelated to that objective, that measure cannot be declared compatible with the internal market.

However, the mere fact that aid is granted to only one undertaking, among a number of undertakings potentially adversely affected by an exceptional occurrence, still does not mean that that aid necessarily pursues other objectives to the exclusion of the objective pursued by Article 107(2)(b) TFEU or that it is granted arbitrarily.

In that context, the Court of Justice also rejects Ryanair’s argument that the purpose of that provision presupposes that the Member State concerned acts as an ‘insurer of last resort’ offering the same protection to all undertakings exposed to certain exceptional occurrences, since such an interpretation is not apparent either from the wording or from the objective of Article 107(2)(b) TFEU.

Accordingly, the General Court did not err in law in finding that, notwithstanding the fact that the measures at issue did not benefit all the undertakings which suffered damage caused by the COVID 19 pandemic, the Commission was entitled to classify them as aid compatible with the internal market under Article 107(2)(b) TFEU.

Moreover, contrary to what Ryanair maintained, the fact that the Commission had declared the Swedish loan guarantees scheme compatible with the internal market on the basis of Article 107(3)(b) TFEU did not prevent it from declaring the new guarantee notified by the Kingdom of Sweden compatible with the internal market under Article 107(2)(b) TFEU. Since an event such as the COVID-19 pandemic may be classified both as an ‘exceptional occurrence’, within the meaning of the latter provision, and as an event giving rise to a ‘serious disturbance in the economy’, within the meaning of the former provision, the FEU Treaty does not preclude the concurrent application of those provisions, provided that the respective conditions for their application are met.

Next, in the context of the review of proportionality, while confirming that individual aid granted under Article 107(2)(b) TFEU cannot exceed the losses incurred by its beneficiary as a result of the exceptional occurrence concerned, the Court of Justice rejects Ryanair’s complaints that the General Court should have taken into account possible overcompensation of SAS in relation to the damage suffered by the other airlines operating in Sweden and Denmark. On that point, the Court of Justice states, first, that the question whether, or to what extent, other companies also suffered damage as a result of the COVID-19 pandemic is clearly irrelevant for the purposes of assessing possible overcompensation in favour of SAS. Second, since the Kingdom of Denmark and the Kingdom of Sweden were not required to take into account all the damage caused by the COVID-19 pandemic or to grant all adversely affected undertakings the benefit of the aid, the authorisation to grant, under Article 107(2)(b) TFEU, aid to SAS alone cannot be made subject to the Commission demonstrating that the damage caused by that pandemic caused damage only to that undertaking.

Moreover, the General Court was right to hold that, in the case of aid in the form of a guarantee on a credit facility, the amount of aid granted to the beneficiary which the Commission must take into account in order to determine whether there has been any overcompensation corresponds, in principle, to the difference in the rate granted to that beneficiary with or without the guarantee on the date its decision was adopted. By contrast, for the purposes of that determination, the Commission must not have regard to any advantage which the beneficiary might have indirectly derived from it, such as the competitive advantage resulting, as the case may be, from the fact that it was the sole beneficiary of the aid.

The Court of Justice also endorses the General Court’s conclusion that the measures at issue are not contrary to the principle of non-discrimination solely because they are inherently exclusive, since EU law allows Member States to grant individual aid, provided that all the conditions laid down in Article 107 TFEU are fulfilled.

In that regard, the Court of Justice recalls that, although Article 107(1) TFEU lays down the principle that measures meeting the conditions laid down in that provision, which include the requirement of selectivity, are incompatible with the internal market, the fact remains that paragraphs 2 and 3 of that article provide for certain derogations from that principle. It follows that State aid granted for the purposes of an objective recognised by those derogations and within the limits of what is necessary and proportionate to achieve that objective cannot be held to be incompatible with the internal market having regard solely to the characteristics or effects inherent in any State aid, that is to say, in particular, for reasons relating to whether the aid is selective or distorts competition.

In that context, the Court of Justice also rejects Ryanair’s claim that the General Court erred in law in failing to apply the principle of non-discrimination on grounds of nationality laid down in Article 18 TFEU, but examined the measures at issue in the light of Article 107(2)(b) TFEU. In accordance with settled case-law, Article 18 TFEU is intended to apply independently only to situations governed by EU law in respect of which the FEU Treaty does not lay down specific rules prohibiting discrimination. According to the Court of Justice, the derogations provided for in Article 107(2) and (3) TFEU constitute such specific rules.

Nor did the General Court err in law in rejecting Ryanair’s complaints alleging infringement of the provisions on the freedom to provide services and freedom of establishment. In that regard, the Court of Justice notes that, in order to establish that the measures at issue, because they benefited only SAS, constituted an obstacle to the freedom of establishment and the freedom to provide services, Ryanair would have had to show that they produced restrictive effects that go beyond those inherent in State aid granted in accordance with the requirements laid down in Article 107(2)(b) TFEU. However, in its line of argument, Ryanair merely criticised the choice of SAS as the sole beneficiary of the measures at issue and the consequences of that choice, even though that choice is inherent in the selective nature of those measures.

Lastly, the Court of Justice rejects the ground of appeal alleging that the General Court disregarded the requirements to state reasons for the Commission’s decisions not to raise objections to the measures at issue and, consequently, dismisses Ryanair’s two appeals in their entirety.

1      Under that provision, aid to promote the execution of an important project of common European interest or to remedy a serious disturbance in the economy of a Member State may be declared compatible with the internal market.

2      Decision C(2020) 2366 final on State aid SA.56812 (2020/N) – Sweden – COVID-19: Loan guarantee scheme to airlines (OJ 2020 C 269, p. 1).

3      Commission Decision C(2020) 2416 final of 15 April 2020 on State aid SA.56795 (2020/N) – Denmark – Compensation for the damage caused by the COVID-19 outbreak to Scandinavian Airlines (OJ 2020 C 220, p. 7).

4      Commission Decision C(2020) 2784 final of 24 April 2020 on State aid SA.57061 (2020/N) – Sweden – Compensation for the damage caused by the COVID-19 outbreak to Scandinavian Airlines (OJ 2020 C 220, p. 9).

5      Judgments of 14 April 2021, Ryanair v Commission (SAS, Denmark; Covid-19) (T‑378/20, EU:T:2021:194) and Ryanair v Commission (SAS, Sweden; Covid-19) (T‑379/20, EU:T:2021:195).

6      The appeal brought against the judgment in Case T‑379/20 is dismissed by the judgment of the Court of Justice in Case C‑320/21 P. The appeal brought against the judgment in Case T‑378/20 is dismissed by the judgment of the Court of Justice in Case C‑321/21 P.