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Document 62021CJ0591
Judgment of the Court (Fourth Chamber) of 29 July 2024.#Ryanair DAC and Laudamotion GmbH v European Commission.#Appeal – State aid – Article 107(2)(b) TFEU – Austrian air transport market – Aid granted by the Republic of Austria to an airline amid the COVID-19 pandemic – Subordinated loan to Austrian Airlines AG – Decision by the European Commission not to raise objections – Aid to make good the damage suffered by a single undertaking – Principles of proportionality and of non-discrimination – Freedom of establishment and freedom to provide services.#Case C-591/21 P.
Domstolens dom (fjärde avdelningen) av den 29 juli 2024.
Ryanair DAC och Laudamotion GmbH mot Europeiska kommissionen.
Mål C-591/21 P.
Domstolens dom (fjärde avdelningen) av den 29 juli 2024.
Ryanair DAC och Laudamotion GmbH mot Europeiska kommissionen.
Mål C-591/21 P.
ECLI identifier: ECLI:EU:C:2024:635
JUDGMENT OF THE COURT (Fourth Chamber)
29 July 2024 (*)
(Appeal – State aid – Article 107(2)(b) TFEU – Austrian air transport market – Aid granted by the Republic of Austria to an airline amid the COVID-19 pandemic – Subordinated loan to Austrian Airlines AG – Decision by the European Commission not to raise objections – Aid to make good the damage suffered by a single undertaking – Principles of proportionality and of non-discrimination – Freedom of establishment and freedom to provide services)
In Case C‑591/21 P,
APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 23 September 2021,
Ryanair DAC, established in Swords (Ireland),
Laudamotion GmbH, established in Schwechat (Austria),
represented initially by V. Blanc, F.‑C. Laprévote, E. Vahida, avocats, I.‑G. Metaxas-Maranghidis, dikigoros, D. Pérez de Lamo and S. Rating, abogados, and subsequently by F.‑C. Laprévote, E. Vahida, avocats, I.‑G. Metaxas-Maranghidis, dikigoros, D. Pérez de Lamo et S. Rating, abogados,
appellants,
the other parties to the proceedings being:
European Commission, represented by L. Flynn and F. Tomat, acting as Agents,
defendant at first instance,
Federal Republic of Germany, represented by J. Möller and P.‑L. Krüger, acting as Agents,
Republic of Austria, represented by A. Posch, J. Schmoll and E. Samoilova, acting as Agents,
Austrian Airlines AG, established in Vienna (Austria), represented by A. Zellhofer, Rechtsanwalt,
interveners at first instance,
THE COURT (Fourth Chamber),
composed of C. Lycourgos, President of the Chamber, O. Spineanu‑Matei, J.‑C. Bonichot, S. Rodin (Rapporteur) and L.S. Rossi, Judges,
Advocate General: G. Pitruzzella,
Registrar: A. Calot Escobar,
having regard to the written procedure,
having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,
gives the following
Judgment
1 By their appeal, Ryanair DAC and Laudamotion GmbH seek to have set aside the judgment of the General Court of the European Union of 14 July 2021, Ryanair and Laudamotion v Commission (Austrian Airlines;Covid-19) (T‑677/20, ‘the judgment under appeal’, EU:T:2021:465), by which the General Court dismissed their action for annulment of Commission Decision C(2020) 4684 final of 6 July 2020 on State aid SA.57539 (2020/N) – Austria – COVID-19 – Aid to Austrian Airlines (OJ 2020 C 346, p. 2; ‘the decision at issue’).
The background to the dispute and the decision at issue
2 The background to the dispute, as set out in the judgment under appeal, may be summarised as follows.
3 Austrian Airlines AG (‘AUA’) is an airline which is part of the Lufthansa group. The parent company, Deutsche Lufthansa AG (‘DLH’), stands at the head of that group. The group includes, among others, the airlines Brussels Airlines SA/NV, AUA, Swiss International Air Lines Ltd and Edelweiss Air AG.
4 On 23 June 2020, the Republic of Austria, in accordance with Article 108(3) TFEU, notified the European Commission of an aid measure in the form of a subordinated loan convertible into a grant of EUR 150 million in favour of AUA (‘the measure at issue’). That measure was intended to compensate AUA for the damage resulting from the cancellation or rescheduling of its flights after the imposition of travel restrictions and other containment measures amid the COVID-19 pandemic.
5 On 6 July 2020, the Commission adopted the decision at issue, by which, after finding that the measure at issue constituted State aid within the meaning of Article 107(1) TFEU and after assessing its compatibility with the internal market in the light of its Communication C(2020) 1863 of 19 March 2020 entitled ‘Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak’ (OJ 2020 C 91 I, p. 1), as amended by Communications C(2020) 2215 of 3 April 2020 (OJ 2020 C 112 I, p. 1), 2020/C 164/03 of 13 May 2020 (OJ 2020 C 164, p. 3) and 2020/C 218/03 of 29 June 2020 (OJ 2020 C 218, p. 3), it decided that that measure was compatible with the internal market under Article 107(2)(b) TFEU and therefore did not raise any objections to it.
6 The measure in question forms part of a series of aid measures in favour of AUA and the Lufthansa group which may be summarised as follows.
7 By decision of 22 March 2020, SA.56714 (2020/N) – Germany – COVID-19 measures, the Commission, on the basis of Article 107(3)(b) TFEU, authorised an aid scheme established by the Federal Republic of Germany in order to support undertakings that require liquidity for their activities in Germany, without limitation as to the economic sector concerned. Under that scheme, DLH was eligible for a State guarantee of 80% on a loan of EUR 3 billion (‘the German loan’).
8 By decision of 17 April 2020, SA.56981 (2020/N) – Austria – Austrian guarantee scheme on bridge loans under the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak, as amended by decision of 9 June 2020, SA.57520 (2020/N) – Austria – Austrian anti-crisis measures – COVID-19: Guarantees for large undertakings on the basis of the Guarantee Law of 1977 by Austria Wirtschaftsservice GmbH (aws) – Amendment to the scheme SA.56981 (2020/N), the Commission, on the basis of Article 107(3)(b) TFEU, authorised an aid scheme established by the Republic of Austria for undertakings affected by the COVID-19 pandemic, without limitation as to the sector concerned (‘the Austrian aid scheme’). Under that scheme, the Republic of Austria granted AUA aid in the form of a State guarantee of 90% on a loan of EUR 300 million granted by a consortium of commercial banks.
9 By decision of 25 June 2020, SA.57153 (2020/N) – Germany – COVID-19 – Aid to Lufthansa (‘the Lufthansa decision’), the Commission, on the basis of Article 107(3)(b) TFEU, authorised the grant of individual aid of EUR 6 billion to DLH, composed of, first, EUR 306 044 326.40 for an equity participation, second, EUR 4 693 955 673.60 for ‘silent participation’, a hybrid capital instrument, treated as equity capital according to international accounting standards, and, third, EUR 1 billion for ‘silent participation’ with the characteristics of a convertible debt instrument. That aid could be used by DLH to support the other companies in the Lufthansa group that were not in financial difficulties on 31 December 2019, including AUA.
10 The Lufthansa decision states that the aid measure which it covers is part of a wider set of support measures for the Lufthansa group, consisting of the following:
– the German loan;
– a 90% State guarantee on a EUR 300 million loan that the Republic of Austria planned to grant to AUA under the Austrian aid scheme;
– the measure at issue;
– EUR 250 million in liquidity support and a EUR 40 million loan provided by the Kingdom of Belgium to Brussels Airlines; and
– an 85% State guarantee on a loan of EUR 1.4 billion granted by the Swiss Confederation to Swiss International Air Lines and Edelweiss Air.
11 In the Lufthansa decision, the Commission observed, in essence, that the aid granted by other States to undertakings in the Lufthansa group, namely the aid listed in the second to fifth indents of the preceding paragraph, and therefore including the measure at issue, would be deducted from the individual aid to DLH that was the subject of that decision or from the German loan.
The procedure before the General Court and the judgment under appeal
12 By application lodged at the Registry of the General Court on 13 November 2020, the appellants, Ryanair and Laudamotion, brought an action for annulment of the decision at issue.
13 In support of that action, the appellants raised five pleas in law, alleging, first, that the Commission had failed to examine possible aid to or from Lufthansa; second, infringement of the principle of non-discrimination, the free provision of services and the freedom of establishment; third, misapplication of Article 107(2)(b) TFEU and manifest error of assessment; fourth, infringement of their procedural rights on the ground that the Commission refused to initiate the formal investigation procedure despite the existence of serious doubts as to the compatibility of the measure at issue with the internal market and; fifth, infringement of the second paragraph of Article 296 TFEU.
14 By the judgment under appeal, the General Court rejected the first to the third and the fifth pleas raised by the appellants as unfounded. As regards the fourth plea, it considered, inter alia, that that plea reproduced the arguments put forward in the first to third pleas, with the result that, in the light of the reasons which led it to dismiss those pleas, it was not necessary to examine the merits of that fourth plea. Consequently, the General Court dismissed the action in its entirety, without ruling on its admissibility.
Forms of order sought by the parties to the appeal
15 By their appeal, the appellants claim that the Court of Justice should:
– set aside the judgment under appeal;
– annul the decision at issue;
– order the Commission and the interveners at first instance to pay the costs or, in the alternative:
– set aside the judgment under appeal;
– refer the case back to the General Court for reconsideration; and
– reserve the costs.
16 The Commission, the Federal Republic of Germany, the Republic of Austria and AUA contend that the Court should:
– dismiss the appeal and
– order the appellants to pay the costs.
The appeal
17 The appellants have put forward seven grounds in support of their appeal. The first ground of appeal alleges errors of law and distortion of the facts by the General Court in rejecting their argument that the Commission had failed to review a possible ‘spill-over of aid to or from DLH’. The second ground of appeal alleges that the General Court erred in law in rejecting the appellants’ argument that aid granted under Article 107(2)(b) TFEU cannot be intended to make good the damage suffered by a single undertaking in a sector that has been affected as a whole. The third ground of appeal alleges errors of law, distortion of the facts and contradictory reasoning by the General Court in its rejection of the appellants’ argument alleging infringement of the principle of non-discrimination. The fourth ground of appeal alleges errors of law and distortion of the facts by the General Court in its rejection of the appellants’ argument related to infringement of the freedom of establishment and the free provision of services. The fifth ground alleges errors of law and a distortion of the facts by the General Court in applying Article 107(2)(b) TFEU and the proportionality principle as regards the damage caused to AUA by the COVID-19 pandemic. The sixth ground of appeal alleges an error of law and distortion of the facts by the General Court in deciding not to examine the merits of the fourth plea in the action at first instance, which alleged infringement of the appellants’ procedural rights. The seventh ground of appeal alleges an error of law and distortion of the facts vitiating the General Court’s finding that the Commission had not infringed its obligation to state reasons under the second paragraph of Article 296 TFEU.
The first ground of appeal
Arguments of the parties
18 By their first ground of appeal, the appellants complain that the General Court erred in law and manifestly distorted the facts in rejecting, in paragraphs 36 to 44 of the judgment under appeal, their argument that the Commission had failed to review a possible ‘spill-over of aid to or from DLH’. In particular, it was incorrect of the General Court to hold that the Commission had taken sufficient account of the relationship between the measure at issue and the aid which is the subject of the Lufthansa decision.
19 More particularly, the appellants dispute certain assessments of the General Court in paragraphs 40 to 42 of the judgment under appeal, in relation more specifically to the risk that AUA might receive support from DLH going beyond the latter’s contribution of EUR 150 million in equity, referred to in the decision at issue, resulting in overcompensation in favour of AUA.
20 The first ground of appeal is divided into two limbs. First, the appellants argue that, contrary to what the General Court held in paragraph 41 of that judgment, they were required only to demonstrate that it was plausible that the aid provided to DLH could ‘spill over’ to AUA, such a ‘spill-over’, moreover, not being hypothetical at all. In addition, the General Court’s finding in that same paragraph 41 that any ‘spill-over’ would not be problematic on the ground that it ‘would originate in the aid already authorised in the Lufthansa decision, the legality of which is not the subject matter of the present action’ contradicts the judgment of 19 May 2021, Ryanair v Commission (KLM; COVID-19) (T‑643/20, EU:T:2021:286). Furthermore, the General Court’s statement in paragraphs 40 and 41 of the judgment under appeal, that the German loan and the aid which is the subject of the Lufthansa decision, based on Article 107(3)(b) TFEU, on the one hand, and the measure at issue, based on Article 107(2)(b) TFEU, on the other hand, were not supposed to cover the same eligible costs, is formalistic and superficial. It is clear that both the aforementioned loan and aid and that measure were de facto aimed at helping AUA overcome the financial impact of the COVID-19 pandemic. Second, the appellants argue that, contrary to the General Court’s findings in paragraph 42 of the judgment under appeal, the deduction mechanism provided for in the Lufthansa decision cannot correct the overcompensation that would be caused by a ‘spill-over’ of the aid which is the subject of that decision from DLH to AUA.
21 The Commission contends that the first ground of appeal should be rejected as unfounded. According to the Federal Republic of Germany, the Republic of Austria and AUA, this ground of appeal is, at least in part, inadmissible and is in any event unfounded.
Findings of the Court
22 As a preliminary point, it should be observed that, by the decision at issue, the measure at issue was declared compatible with the internal market under Article 107(2)(b) TFEU, which makes provision for such compatibility with regard to aid ‘to make good the damage caused by natural disasters or exceptional occurrences’.
23 In that respect, aid granted on the basis of Article 107(2) TFEU must, inter alia, be necessary to achieve the aims set out in that provision, so that aid which improves the financial situation of the recipient undertaking without being necessary to achieve those aims cannot be considered as being compatible with the internal market (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 57 and the case-law cited).
24 Under Article 107(2)(b) TFEU, only damage caused directly by natural disasters or exceptional occurrences may be compensated for (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraphs 20 and 58 and the case-law cited).
25 It follows that the aid granted cannot exceed the losses incurred by the beneficiaries of that aid owing to the event concerned (see, to that effect, judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 59 and the case-law cited).
26 The first ground of appeal is directed against the grounds of the judgment under appeal by which the General Court rejected, in paragraphs 36 to 44 of that judgment, the first plea in the action at first instance, which alleged that the Commission had not taken account of a possible ‘spill-over of aid to or from DLH’, in particular the risk of AUA benefiting from a transfer of additional funds from DLH, beyond the equity contribution of EUR 150 million referred to in the decision at issue, such an additional transfer being liable to result in overcompensation for the damage suffered by AUA.
27 By the first limb of their first ground of appeal, the appellants claim that, contrary to what was held by the General Court in paragraph 41 of the judgment under appeal, they were required only to demonstrate that such a ‘spill-over’ was plausible. It must be stated that this first limb is based on a misreading of the paragraph in question since the General Court, responding to the appellants’ assertion that it could not ‘be ruled out’ that DLH would transfer additional liquidity to AUA beyond that contribution, merely held, as part of its unappealable assessment of the facts, that such a transfer was a mere hypothesis, since the appellants had adduced no specific evidence to that effect.
28 Furthermore, it must be found that, as is apparent from paragraph 41 of the judgment under appeal, it was merely for the sake of completeness – if it were to be assumed that DLH had the intention of transferring additional liquidity to AUA beyond the contribution of EUR 150 million referred to in the decision at issue – that the General Court assessed the arguments made by the appellants in their first plea in the action at first instance and to which it responded by means of the considerations set out in the second part of paragraph 41. Consequently, the complaints made in the first limb of the first ground of appeal which concern those considerations must be rejected as ineffective.
29 By the second limb of their first ground of appeal, the appellants dispute the General Court’s finding, in paragraph 42 of the judgment under appeal, that the deduction mechanism provided for in the Lufthansa decision would correct the overcompensation that would be caused by a ‘spill-over’ of the aid which is the subject of that decision from DLH to AUA.
30 Contrary to what is claimed by the appellants, that finding is not vitiated by an error of law.
31 Since the aid forming the subject matter of the Lufthansa decision had been declared compatible with the internal market under Article 107(3)(b) TFEU – and in view of the fact, first, that that aid could benefit all the companies in the Lufthansa group, including AUA, and, second, that, according to that decision, that aid merely corresponded to the minimum necessary to achieve its objectives, namely restoring the capital structure of the Lufthansa group and ensuring its viability – the General Court was entitled to find, without erring in law, that there was no risk of overcompensation of the damage and, in any event, that the Commission, in the light of similar considerations set out in the decision at issue, had taken sufficient account of the relationship between the various aid measures concerned and, in particular, of the possible ‘spill-over’ of that aid from one measure to another.
32 Lastly, to the extent that the appellants also allege in their first ground of appeal that the General Court distorted the facts submitted to it, it should be pointed out that, in accordance with the settled case-law of the Court of Justice, it follows from the second subparagraph of Article 256(1) TFEU and from the first paragraph of Article 58 of the Statute of the Court of Justice of the European Union that the General Court has exclusive jurisdiction, first, to establish the facts, except where the substantive inaccuracy of its findings is apparent from the documents submitted to it, and, second, to assess those facts (judgment of 25 June 2020, SatCen v KF, C‑14/19 P, EU:C:2020:492, paragraph 103 and the case-law cited).
33 It follows that the appraisal of the facts by the General Court does not constitute, save where the clear sense of the evidence produced before it is distorted, a question of law which is subject, as such, to review by the Court of Justice (judgment of 25 June 2020, SatCen v KF, C‑14/19 P, EU:C:2020:492, paragraph 104 and the case-law cited).
34 Where an appellant alleges distortion of the evidence by the General Court, that person must, under Article 256 TFEU, the first paragraph of Article 58 of the Statute of the Court of Justice of the European Union and Article 168(1)(d) of the Rules of Procedure of the Court of Justice, indicate precisely the evidence alleged to have been distorted by the General Court and show the errors of appraisal which, in that person’s view, led to such distortion. In addition, according to settled case-law, that distortion must be obvious from the documents in the Court’s file, without there being any need to carry out a new assessment of the facts and the evidence (judgment of 25 June 2020, SatCen v KF, C‑14/19 P, EU:C:2020:492, paragraph 105 and the case-law cited).
35 It must found in the present case that the appellants have not put forward any arguments in support of their first ground of appeal that are capable of demonstrating that the General Court distorted the evidence, for the purposes of that case-law, in making the findings concerned by this ground of appeal and referred to in paragraph 20 above.
36 It follows from the foregoing that the first ground of appeal must be rejected in its entirety.
The second ground of appeal
Arguments of the parties
37 By their second ground of appeal, concerning paragraphs 55 to 58 of the judgment under appeal, the appellants complain, in essence, that the General Court erred in law in that it held that aid granted under Article 107(2)(b) TFEU can be intended to make good the damage suffered by only one of the persons affected by an exceptional occurrence, even though competitors of that person, such as the appellants, have also been affected by it.
38 According to the appellants, the reasoning set out in paragraphs 55 and 56 of the judgment under appeal does not justify the rejection of the second plea in their action at first instance, in so far as it alleged an infringement of the principle of non-discrimination. While Member States are indeed not obliged to grant State aid, they should, when they decide to do so, comply with the conditions laid down in the FEU Treaty, including the principle of non-discrimination. Similarly, the issue is not whether the aid concerned covers the entirety of the damage caused by an exceptional occurrence, but whether it is granted to all competing undertakings operating in a given market that have suffered that damage or only to one, arbitrarily chosen, undertaking, with that latter situation not being a proper application of that provision.
39 The appellants argue that the General Court should have found that the validity of their arguments was borne out by a plain reading and the underlying rationale of Article 107(2)(b) TFEU, which should be interpreted narrowly, and by the Commission’s decision-making practice prior to the COVID-19 pandemic. In that regard, the very purpose of that provision is to allow Member States to act as ‘insurers of last resort’ where the risk associated with natural disasters or other exceptional occurrences cannot be covered by undertakings operating in a particular market. That is a fundamental economic function falling to each Member State. By definition, that function of ‘insurer of last resort’ supposes that the Member State concerned offers the same protection to all undertakings exposed to the risk at issue. A Member State that offers its protection to only a select few undertakings or, as in the case at hand, to a single company, is therefore no longer acting as an ‘insurer of last resort’, but for other public policy purposes, such as industrial policy reasons.
40 According to the appellants, the concurrent pursuit of various public policy objectives by a Member State by means of aid granted under Article 107(2)(b) TFEU weakens the direct link between the exceptional occurrence, the damage and the aid granted, whereas such a link is a key requirement for the application of that provision, which is based on a purely compensatory logic.
41 The Commission, the Federal Republic of Germany, the Republic of Austria and AUA submit that the second ground of appeal must be rejected as unfounded.
Findings of the Court
42 It is apparent from settled case-law that, since they constitute an exception to the general principle that State aid is incompatible with the internal market, laid down in Article 107(1) TFEU, the provisions of Article 107(2)(b) TFEU must be interpreted narrowly. Accordingly, the Court has held, in particular, that only damage caused directly by natural disasters or other exceptional occurrences may be compensated for under those provisions. It follows that there must be a direct link between the damage caused by the exceptional occurrence and the State aid, and that as precise an assessment as possible must be made of the damage suffered by the operators concerned (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 20 and the case-law cited).
43 According to the appellants, if a Member State decides to adopt support measures under Article 107(2)(b) TFEU, it is obliged to do so in respect of all the undertakings which have suffered damage.
44 In that regard, while it is true that the derogation provided for in that provision must be interpreted narrowly, that does not mean that the terms used to define that derogation must be construed in such a way as to deprive it of its intended effect, since a derogation must be construed in a manner consistent with the objectives that it pursues (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 22 and the case-law cited).
45 It is in no way apparent from the wording of Article 107(2)(b) TFEU, read in the light of the objective of that provision, that only aid granted to all the undertakings affected by the damage caused, in particular, by an exceptional occurrence may be declared to be compatible with the internal market within the meaning of that provision. Even if it is granted only to one undertaking, aid may, as appropriate, be intended to make good that damage and, in full compliance with EU law, fulfil the objective expressly referred to in that provision (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 23).
46 Therefore, the objective pursued by Article 107(2)(b) TFEU, which is to compensate for the disadvantages caused directly by an exceptional occurrence, does not mean that a Member State cannot, without that being dictated by a desire to favour one undertaking over its competitors, choose, for objective reasons, to grant only a single undertaking the benefit of a measure adopted under that provision (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 24).
47 Moreover, a contrary interpretation of Article 107(2)(b) TFEU would deprive that provision of much of its effectiveness. If that provision only allowed Member States the option of granting aid to all the victims of an exceptional occurrence without being able to reserve that aid to a limited number of undertakings, or even just one, Member States would often be deterred from making use of that option because of the costs involved in the grant, in such circumstances, of significant aid to all undertakings that have suffered damage owing to that occurrence (see, to that effect, judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 25).
48 It follows from the foregoing considerations that Article 107(2)(b) TFEU cannot be interpreted in the manner suggested by the appellants without undermining the objective and effectiveness of that provision.
49 That said, it must be borne in mind, as is apparent, in essence, from the case-law cited in paragraph 42 above, that an aid measure may be declared compatible with the internal market pursuant to a derogation provided for in Article 107(2) TFEU only if all the conditions for the application of that provision are met, which means, inter alia, that that measure must contribute to the attainment of one of the objectives referred to in that provision and be proportionate to the aim pursued.
50 In that respect, aid granted on the basis of Article 107(2) TFEU must, inter alia, be necessary to achieve the aims set out in that provision, so that aid which improves the financial situation of the recipient undertaking without being necessary to achieve those aims cannot be considered as being compatible with the internal market (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 30 and the case-law cited).
51 However, contrary to what the appellants suggest, the mere fact that aid under Article 107(2)(b) TFEU is granted to only one undertaking, as in the present case to AUA, from among a number of undertakings affected by the exceptional occurrence at issue, does not mean that that aid necessarily pursues other objectives to the exclusion of the one pursued by that provision or that it is granted arbitrarily (see, to that effect, judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 31).
52 In that context, it is appropriate to reject the appellants’ argument that the purpose of Article 107(2)(b) TFEU assumes that the Member State concerned acts as an ‘insurer of last resort’, since such an interpretation of that provision is not apparent either from its wording or from its objective, referred to in paragraphs 22 and 42 above (see, to that effect, judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 32).
53 Lastly, in so far as the appellants rely on a decision-making practice of the Commission prior to the COVID-19 pandemic, it is sufficient to observe that, in the present case, the legality of the decision at issue, and subsequently the judgment under appeal, must be assessed solely in the context of Article 107(2)(b) TFEU and not in the light of an alleged earlier decision-making practice of that institution (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 33 and the case-law cited).
54 It follows from the foregoing that the General Court did not err in law in concluding, in paragraph 57 of the judgment under appeal, that Member States were not required, under Article 107(2)(b) TFEU, to make good the entirety of the damage caused by the exceptional occurrence at issue, such that they were similarly not required to grant aid to all the undertakings which had suffered that damage.
55 The second ground of appeal must therefore be rejected as unfounded.
The third ground of appeal
Arguments of the parties
56 By their third ground of appeal, which has three limbs and relates to paragraphs 48 to 69 of the judgment under appeal, the appellants complain that the General Court erred in law and distorted the facts in rejecting the second plea in their action at first instance in so far as that plea alleged an infringement of the principle of non-discrimination.
57 By the first limb of their third ground of appeal, the appellants claim that the General Court failed properly to apply the principle of the prohibition of discrimination on grounds of nationality. Although the General Court acknowledged, in paragraph 59 of the judgment under appeal, that the difference in treatment established by the measure at issue, in that it benefited only AUA, could amount to discrimination, it wrongly held that such discrimination was to be assessed solely in the light of Article 107(2)(b) TFEU, on the ground that that provision was a special provision laid down by the Treaties, within the meaning of Article 18 TFEU. Furthermore, the General Court should have examined whether such discrimination was justified by grounds of public policy, public security or public health, within the meaning of Article 52 TFEU, or, in any event, whether it was based on objective considerations, independent of the nationality of the persons concerned.
58 By the second limb of this ground of appeal, the appellants submit that the General Court, in paragraphs 52, 58, 61 and 62 of the judgment under appeal, erred in law and distorted the facts as regards determining the objective of the measure at issue. In particular, the General Court was wrong to hold in paragraph 52 of the judgment under appeal that the sole purpose of that measure was to compensate AUA partially for the damage resulting from the cancellation or rescheduling of its flights, rather than to maintain the ‘connectivity’ of Austria in the light of AUA’s importance in that regard. Moreover, that finding contradicts paragraph 61 of the judgment under appeal. According to the appellants, the General Court also erred in paragraph 58 of the judgment under appeal in asserting that individual aid by definition benefits only one company and that, by its nature, such aid brings about discrimination, which is inherent in its individual character.
59 By the third limb of their third ground of appeal, the appellants argue that the General Court made several errors of law in incorrectly holding, in paragraph 64 of the judgment under appeal, that the difference in treatment brought about by the measure at issue was justified since AUA, because of its essential role in providing Austria’s airline services, had been more affected by the restrictions related to the COVID-19 pandemic than the other airlines operating in Austria.
60 However, first, that justification does not appear in the decision at issue. Second, the justification in question amounts in essence to affirming that an undertaking with a large market share is entitled to be granted the entire amount of aid granted under Article 107(2)(b) TFEU, which is contrary to the principles of proportionality and undistorted competition. Third, in paragraph 65 of the judgment under appeal, the General Court justified AUA’s entitlement to all the aid concerned by the fact that the latter was ‘proportionately and, because of the scale of its activities in Austria, significantly more affected by those restrictions than Ryanair’, which, according to the appellants, makes ‘no sense’ and is ‘obviously wrong’. Fourth, the General Court erred in law in finding in paragraph 68 of the judgment under appeal that, in view of the relative value of the measure at issue, the appellants had failed to establish that dividing that amount among all the airlines operating in Austria would not have deprived that measure of its effectiveness. In any event, such an analysis does not appear in the decision at issue.
61 The Commission, the Federal Republic of Germany, the Republic of Austria and AUA submit that the third ground of appeal must be rejected as unfounded.
Findings of the Court
62 By the second limb of the third ground of appeal, which it is appropriate to examine first, the appellants submit, in essence, that the General Court, in paragraphs 52, 58, 61 and 62 of the judgment under appeal, incorrectly identified the objective of the measure at issue, as is apparent from the decision at issue, and that it wrongly considered that that objective did not consist of preserving Austria’s ‘connectivity’.
63 In that regard, it should be observed that the General Court stated in paragraph 52 of the judgment under appeal that the sole purpose of the measure at issue was to compensate AUA partially for the damage resulting from the cancellation or rescheduling of its flights following the introduction of travel restrictions or other containment measures amid the COVID-19 pandemic.
64 In so doing, the General Court did not commit any error of law. First, as is apparent from paragraph 51 of the judgment under appeal, such a description is very similar to that which the appellants themselves gave of the purpose of the measure at issue.
65 Second, although, as the appellants point out, the General Court observed in paragraph 61 of the judgment under appeal that it was apparent from the decision at issue that, according to the Austrian authorities, AUA was of importance for the Austrian economy and for Austria’s ‘connectivity’, it must be stated that that paragraph concerns the arrangements for granting the measure at issue and that that information in the decision at issue is intended only to describe the profile of the undertaking benefiting from that measure and not the latter’s objective.
66 Consequently, contrary to what is argued by the appellants, the description of the purpose of the measure at issue provided by the General Court in paragraph 52 of the judgment under appeal is neither vitiated by an error of law nor contradicted by the reference to the information in question in paragraph 61 of that judgment.
67 In so far as the appellants complain by the second limb of their third ground of appeal that the General Court distorted the facts submitted to it, it must be held that they do not specify the evidence which was thus distorted when determining the purpose of the measure at issue nor, a fortiori, do they demonstrate in what way that evidence was distorted, in terms of the case-law referred to in paragraph 34 above.
68 In those circumstances, the General Court did not err in law or distort the facts when it found, in paragraph 52 of the judgment under appeal, that the sole objective of the measure at issue was to compensate AUA partially for the damage resulting from the cancellation or rescheduling of its flights following the introduction of travel restrictions or other containment measures amid the COVID-19 pandemic.
69 By a final argument put forward in the second limb of the third ground of appeal and by the first limb of that ground of appeal, the appellants allege that the General Court erred in law in paragraphs 58 and 59 of the judgment under appeal when applying the principle of non-discrimination and, more specifically, the prohibition of any discrimination on grounds of nationality set out in the first paragraph of Article 18 TFEU.
70 In the first place, as regards the appellants’ claim that the General Court erred in law in paragraph 58 of the judgment under appeal, it must be borne in mind that, according to the settled case-law of the Court of Justice, classification of a national measure as ‘State aid’, within the meaning of Article 107(1) TFEU, requires all the following conditions to be fulfilled. First, there must be an intervention by the State or through State resources. Second, that intervention must be liable to affect trade between Member States. Third, it must confer a selective advantage on the recipient. Fourth, it must distort, or threaten to distort, competition (see, inter alia, judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 101 and the case-law cited).
71 It is therefore with regard to measures with such characteristics, in so far as they are liable to distort competition and affect trade between the Member States, that Article 107(1) TFEU lays down the principle that State aid is incompatible with the internal market (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 102).
72 In particular, the requirement of selectivity arising from Article 107(1) TFEU presupposes that the Commission will establish that the economic advantage, understood in the broad sense, arising directly or indirectly from a particular measure specifically benefits one or more undertakings. It falls to the Commission to show, in particular, that the measure in question creates differences between undertakings which, with regard to the objective of the measure, are in a comparable situation. It is necessary therefore that the advantage be granted selectively and that it be liable to place certain undertakings in a more favourable situation than that of others (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 103 and the case-law cited).
73 Where, as in the present case, the measure in question is envisaged as individual aid, the identification of the economic advantage is, in principle, sufficient to support the presumption that it is selective (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 104 and the case-law cited).
74 It follows that, by stating, in essence, in paragraph 58 of the judgment under appeal, that, by its nature, individual aid introduces a difference in treatment between the undertaking receiving that aid and all other undertakings which, in the light of the objective pursued by that aid, are in a comparable situation, the General Court did not err in law. Furthermore, contrary to what the appellants claim, paragraph 58 cannot be understood as meaning that the General Court considered that individual aid which, in its view, is contrary to the principle of non-discrimination is nevertheless compatible with the internal market, since it expressly stated at the end of that paragraph that EU law allows Member States to grant such aid, ‘provided that all the conditions laid down in Article 107 TFEU are met’.
75 In respect of that latter point, Article 107(2) and (3) TFEU provides for certain derogations from the principle that State aid is incompatible with the internal market, referred to in paragraph 71 above, such as that set out in Article 107(2)(b) TFEU, concerning ‘aid to make good the damage caused by natural disasters or exceptional occurrences’. Accordingly, State aid granted for the purposes of and under the conditions laid down by those derogating provisions, notwithstanding the fact that it has the characteristics and produces the effects referred to in paragraph 70 above, is compatible or is capable of being declared compatible with the internal market (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 106).
76 It follows that, unless those derogating provisions are to be deprived of all practical effect, State aid which is granted in accordance with those conditions, namely, for the purposes of an objective recognised therein and within the limits of what is necessary and proportionate to the achievement of that objective, cannot be held to be incompatible with the internal market having regard solely to the characteristics or effects, referred to in paragraph 70 above, which are inherent in any State aid, that is to say, inter alia, for reasons relating to whether the aid is selective or distorts competition (judgments of 22 March 1977, Iannelli & Volpi, 74/76, EU:C:1977:51, paragraphs 14 and 15, and of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 107).
77 That said, as regards, in the second place, the appellants’ claim that the General Court erred in law in not applying, in paragraph 59 of the judgment under appeal, the principle of non-discrimination on grounds of nationality laid down in Article 18 TFEU, but examined the measure at issue solely in the light of Article 107(2)(b) TFEU, it should be recalled that it is clear from the case-law of the Court of Justice that the procedure provided for in Article 108 TFEU must never produce a result that is contrary to the specific provisions of the Treaty. Accordingly, State aid which, as such or by reason of some modalities thereof, contravenes provisions or general principles of EU law cannot be declared compatible with the internal market (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 109 and the case-law cited).
78 However, as regards Article 18 TFEU specifically, it is settled case-law that that article is intended to apply independently only to situations governed by EU law in respect of which the TFEU lays down no specific prohibition of discrimination (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 110 and the case-law cited).
79 Since, as has been recalled in paragraph 75 above, Article 107(2) and (3) TFEU provides for derogations from the principle, referred to in paragraph 1 of that article, that State aid is incompatible with the internal market, and thus allows, in particular, differences in treatment between undertakings, subject to fulfilment of the requirements laid down by those derogations, the latter must be regarded as being ‘special provisions’ provided for in the Treaties, within the meaning of the first paragraph of Article 18 TFEU (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 111).
80 It follows that the General Court did not err in law in finding, in paragraph 59 of the judgment under appeal, that Article 107(2)(b) TFEU constituted such a specific provision and that it was necessary only to examine whether the difference in treatment brought about by the measure at issue was permitted under that provision.
81 It follows that the differences in treatment entailed by the measure at issue likewise do not have to be justified on the grounds set out in Article 52 TFEU, contrary to what the appellants maintain.
82 In the light of the foregoing, the first and second limbs of the third ground of appeal must be rejected as unfounded.
83 By the third limb of that ground of appeal, the appellants complain that the General Court erred in law and vitiated the judgment under appeal with distortion when it examined, in particular in paragraphs 62 to 68 of that judgment, in relation to the proportionality of the measure at issue, their argument that the difference in treatment resulting from that measure was not proportionate since it grants AUA all of the aid to make good the damage concerned by that measure, whereas AUA suffered only 43% of that damage.
84 In that regard, the appellants submit, by a first complaint, in essence, that by stating, in particular in paragraph 64 of the judgment under appeal, that AUA, because of its essential role in providing Austria’s airline services, had been more affected by the restrictions imposed in the context of the COVID-19 pandemic than the other airlines operating in Austria, the General Court put forward a justification which did not appear in the decision at issue, meaning that it substituted its own grounds for those given by the Commission in support of that decision.
85 Although it is true that, according to the case-law of the Court of Justice, in reviewing the legality of acts under Article 263 TFEU, the Court of Justice and the General Court cannot, under any circumstances, substitute their own reasoning for that of the author of the contested act (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 117 and the case-law cited), it must be pointed out that, in paragraph 64 of the judgment under appeal, the General Court merely recalled, in response to the appellants’ arguments referred to in paragraph 60 above, the content of the decision at issue and, more specifically, drew conclusions from the information contained therein, without, however, substituting its own grounds for those of that decision.
86 In so far as, by the second and third complaints of the third limb of their third ground of appeal, the appellants also refer to the General Court’s assertions, in paragraphs 62 and 65 of the judgment under appeal, that AUA’s market share was ‘significantly higher than that of the second airline’ and that AUA was ‘proportionately and, because of the scale of its activities in Austria, significantly more affected by [the] restrictions [imposed in the context of the COVID-19 pandemic] than Ryanair’, it should be noted that those are unappealable assessments of the facts on the part of the General Court, which are not alleged to have been distorted.
87 In addition, in so far as the appellants submit in support of those complaints, in essence, that, according to the principle of proportionality, the aid should have been allocated among all the victims of the exceptional occurrence at issue, in proportion to the damage which they suffered, that reasoning is based on an erroneous premiss, as is apparent from paragraphs 43 to 54 above.
88 As regards, lastly, the part of the appellants’ arguments directed at challenging paragraph 68 of the judgment under appeal, it should be observed that that paragraph is superfluous in the light of the conclusion reached by the General Court in paragraph 67 of that judgment that the difference in treatment in favour of AUA does not infringe the principle of proportionality. This fourth complaint must therefore be rejected as ineffective.
89 In the light of the foregoing, it is necessary to reject the third limb of the third ground of appeal and, consequently, to dismiss that ground of appeal as a whole.
The fourth ground of appeal
Arguments of the parties
90 By their fourth ground of appeal, which has three limbs, the appellants submit that, in paragraph 74 of the judgment under appeal, the General Court erred in law and distorted the facts in the context of its rejection of the second plea of their action at first instance in so far as they alleged therein an infringement of the free provision of services and the freedom of establishment.
91 By the first limb of their fourth ground of appeal, the appellants argue that by stating in paragraph 74 of the judgment under appeal that they had not demonstrated how their being excluded from the measure at issue, which benefited only AUA, was ‘capable of discouraging them from establishing themselves in Austria or from providing services from and to that country’, the General Court selected an incorrect test for determining whether that measure impeded or rendered less attractive the exercise of the free provision of services or the freedom of establishment. In accordance with the case-law, the General Court should instead have examined whether that measure was such as to deter ‘any of the operators who are impacted’ by it, that is to say, in the present case, other airlines operating in Austria than the appellants, from establishing themselves or providing services in that Member State.
92 By the second limb of this ground of appeal, the appellants submit that in their action at first instance they demonstrated to the requisite legal standard, in accordance with the relevant test, that the measure at issue in practice placed airlines other than AUA, the main Austrian airline, at a disadvantage, in that the benefit of that measure was reserved to AUA. The appellants provided a large amount of evidence relating to the restrictive effect of that measure on the free provision of services and, by failing to examine it, the General Court erred in law and vitiated the judgment under appeal by distortion.
93 By the third limb of this ground of appeal, the appellants submit that, contrary to the findings of the General Court in paragraph 74 of the judgment under appeal, they demonstrated that the alleged restriction on the free provision of services and the freedom of establishment was not justified. The General Court erred in law in holding that that restriction was justified where it complied with Article 107 TFEU. In fact, the General Court, and the Commission before it, should have analysed whether that restriction was justified by an overriding reason relating to the general interest, that it is to say, whether it was non-discriminatory, necessary and proportionate to the general interest aim pursued. The appellants identified elements of fact and law demonstrating that the measure at issue had restrictive effects on the free provision of services that were neither necessary, appropriate nor proportionate in the light of the objective pursued by that measure, namely to make good the damage concerned that had been caused in the aviation sector by the COVID-19 pandemic and to preserve the structure of that sector. Moreover, in that context, they referred to an alternative eligibility criterion for the measure at issue, based on market share, which would have been less harmful to the free provision of services and the freedom of establishment. By ruling as it did, the General Court erred in law and vitiated that judgment by distortion.
94 The Commission, the Federal Republic of Germany, the Republic of Austria and AUA submit that the fourth ground of appeal must be rejected as unfounded. AUA also contends that this ground of appeal is in part inadmissible.
Findings of the Court
95 By the first limb of their fourth ground of appeal, the appellants submit that the General Court applied an incorrect test in the first sentence of paragraph 74 of the judgment under appeal in order to assess whether the measure at issue hindered or rendered less attractive the exercise of the free provision of services and the freedom of establishment. It must be held that the first limb is based on a misreading of the paragraph in question. It is apparent from the second sentence thereof, which refers to paragraphs 60 to 66 of the judgment under appeal, in which the General Court reviewed the proportionality of the measure at issue in the light of the situation of all the airlines present in Austria, that the General Court was referring to the existence of restrictive effects in general, and thus to effects that would not arise exclusively with regard to the appellants, but in fact to all the airlines operating or wishing to operate in Austria.
96 Accordingly, that first limb must be rejected as unfounded.
97 By the second and third limbs of their fourth ground of appeal, which should be examined together, the appellants allege, in essence, that paragraph 74 of the judgment under appeal is vitiated by errors of law on the ground that the General Court solely examined the fact that the measure at issue benefited only AUA in the light of Article 107 TFEU, instead of ascertaining whether that measure was justified in the light of the terms of the FEU Treaty relating to the free provision of services or the freedom of establishment. However, the appellants argue that they submitted elements of fact and law to the General Court demonstrating an infringement of those provisions.
98 In that regard, as pointed out in paragraph 77 above, the procedure under Article 108 TFEU must never produce a result that is contrary to the specific provisions of the FEU Treaty. Accordingly, aid which, as such or by reason of some modalities thereof, contravenes provisions or general principles of EU law cannot be declared compatible with the internal market.
99 However, first, the restrictive effects which an aid measure has on the freedom to provide services or the freedom of establishment still do not constitute a restriction prohibited by the Treaty, since it may be inherent in the very nature of State aid, such as its selective nature (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 132).
100 Furthermore, it is clear from the case-law of the Court of Justice that, where the modalities of an aid measure are so indissolubly linked to the object of the aid that it is impossible to evaluate them separately, their effect on the compatibility or incompatibility of the aid viewed as a whole with the internal market must therefore of necessity be determined by means of the procedure prescribed in Article 108 TFEU (judgments of 22 March 1977, Iannelli & Volpi, 74/76, EU:C:1977:51, paragraph 14, and of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 133).
101 In the present case, as is apparent from paragraph 63 above, the choice of AUA as beneficiary of the measure at issue is part of the objective of that measure and, in any event, even if that choice were to be regarded as a modality of that measure, the appellants do not dispute that such a modality is inextricably linked to that objective, which is to compensate that undertaking in part for the damage concerned resulting from the COVID-19 pandemic. It follows that the effect of that choice on the internal market cannot be examined separately from the effect of the compatibility of that measure as a whole with the internal market by means of the procedure prescribed in Article 108 TFEU.
102 It follows from the reasons set out above and from what has been stated, in particular, in paragraph 76 above, that the General Court did not err in law by holding in paragraph 74 of the judgment under appeal in essence that, in order to establish that the measure at issue, because it benefited only AUA, constituted an obstacle to the freedom of establishment and to the freedom to provide services, the appellants should have demonstrated, in the present case, that that measure produced restrictive effects which went beyond those inherent in State aid granted in accordance with the requirements laid down in Article 107(2)(b) TFEU (see, to that effect, judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 135).
103 The arguments advanced by the appellants in support of the second and third limbs of the fourth ground of appeal, taken together, seek to criticise the choice of AUA as the sole beneficiary of the measure at issue and the consequences of that choice, even though that choice is inherent in the selective nature of that measure.
104 Lastly, it must be held that the appellants have not put forward any argument capable of demonstrating that the General Court distorted the evidence submitted to it.
105 It follows from the foregoing that the second and third limbs of the fourth plea must be rejected and that, accordingly, that ground of appeal must be rejected in its entirety.
The fifth ground of appeal
Arguments of the parties
106 By their fifth ground of appeal, which relates to paragraphs 83 to 88, 95, 101 to 108, 113 to 116 and 119 to 121 of the judgment under appeal and which consists of five limbs, the appellants allege that the General Court erred in law and distorted the facts by incorrectly concluding that the measure at issue was based on Article 107(2)(b) TFEU and that it was proportionate in relation to the damage suffered by AUA as a result of the COVID-19 pandemic.
107 By the first limb of their fifth ground of appeal, the appellants submit that the General Court erred in law in its analysis of their argument that, by taking into account the damage which occurred during the period from 9 to 18 March 2020, the Commission had overestimated that damage.
108 In that regard, first, in paragraph 83 of the judgment under appeal, the General Court misinterpreted paragraphs 40 and 41 of the judgment of 11 November 2004, Spain v Commission (C‑73/03, EU:C:2004:711), in that it inferred a probability test from that case. If the measure concerned is intended to cover damage that will be assessed ex post, as in the present case, any aid that might exceed the losses incurred by beneficiary undertakings, irrespective of the degree of probability of overcompensation of the damage, should be regarded as incompatible with the internal market. The establishment of a mechanism for the recovery of excess aid paid is not sufficient to prevent an unwarranted, albeit temporary, advantage from being conferred on the beneficiary undertaking. Second, the General Court, in paragraphs 84 to 88 of the judgment under appeal, was wrong to hold that the Commission had provided correct reasoning in the decision at issue for authorising aid covering the damage suffered by AUA not only for the period from 19 March to 14 June 2020, but also for that of 9 to 18 March 2020.
109 By the second limb of their fifth ground of appeal, the appellants complain that the General Court erred in law in rejecting, in paragraph 95 of the judgment under appeal, their argument that the Commission should have taken account of the damage suffered by airlines operating in Austria other than AUA. As argued in the second and third grounds of appeal, the principle that aid must be proportionate to the damage requires that the damage be assessed not only at the level of the beneficiary, but also of its competitors. It was thus necessary in the present case to assess the impact of the measure at issue on other airlines which suffered damage in Austria owing to the travel restrictions imposed during the COVID-19 pandemic. In any event, the General Court could not reasonably state, as it did in paragraphs 62, 64 and 65 of the judgment under appeal, that that measure was justified because AUA suffered more damage, given its competitive position, nor decline to take that situation into account when assessing the proportionality of that measure.
110 By the third limb of the fifth ground of appeal, the appellants submit that, in paragraphs 101 to 108 of the judgment under appeal, the General Court wrongly rejected their arguments relating to any additional aid from DLH in favour of AUA.
111 In particular, first, as demonstrated in the first ground of appeal, the Commission and the General Court erred in law and distorted the facts by failing to take into account a risk of a ‘spill-over’ of the aid received by DLH to AUA, which could give rise to overcompensation of the damage suffered by AUA. Second, the General Court erred in law and vitiated the judgment under appeal by distortion in justifying, by means of irrelevant explanations, in paragraphs 101 to 108 of that judgment, the Commission’s failure to take into account additional aid from DLH in favour of AUA. Third, the General Court’s assertion, in paragraph 108 of that judgment, that the appellants had adduced ‘no specific and substantiated evidence to show that all or some of the aid measures in question are intended to cover the same eligible costs as those included in the damage which the aid measure at issue seeks to remedy’ is, according to the appellants, a distortion of the facts and would amount to requiring proof that is impossible to provide. In any event, such reasoning incorrectly leads to the burden of proof being placed systematically on the appellants.
112 By the fourth limb of their fifth ground of appeal, the appellants submit that, in paragraphs 113 to 116 of the judgment under appeal, the General Court erred in law and vitiated that judgment by distortion in rejecting their argument that the Austrian aid scheme could cover the same costs as those that were the subject matter of the measure at issue. The applicants reiterate, first, that the fact that that aid scheme was introduced on the basis of Article 107(3)(b) TFEU and was ‘intended’ to remedy a serious disturbance in the Austrian economy or that the purpose pursued by that scheme was different from that of the measure at issue does not preclude the possibility that that scheme could, in practice, cover the same costs as those for which compensation was provided under the measure at issue. Second, the General Court was wrong to hold, in paragraphs 115 and 116 of the judgment under appeal, that the estimate of the losses expected by AUA for the second half of 2020 had no bearing on the lawfulness of the decision at issue. Third, the General Court erred in finding that the appellants could not validly criticise the Commission’s estimate of the amount of aid granted to AUA under the Austrian aid scheme on the ground that its lawfulness and compatibility were not subject to review by the General Court.
113 By the fifth limb of their fifth ground of appeal, the appellants submit that, in paragraphs 119 to 121 of the judgment under appeal, the General Court erred in law in rejecting their argument that the competitive advantage conferred on AUA, because it was the only airline to benefit from the measure at issue, should have been taken into account for the purpose of assessing the compatibility of the aid concerned with the internal market in the light of Article 107(2)(b) TFEU. According to the appellants, the judgment of 21 December 2016, Commission v Aer Lingus and Ryanair Designated Activity (C‑164/15 P and C‑165/15 P, EU:C:2016:990), on which the General Court relied in that regard, is not relevant, since it concerns the calculation of the amount of aid for the purpose of its recovery. By conflating that calculation with the examination of the proportionality of aid granted on the basis of that provision, and by failing to take account of the essentially economic nature of that proportionality examination, the General Court erred in law.
114 The Commission, the Federal Republic of Germany, the Republic of Austria and AUA submit that the fifth ground of appeal must be rejected as unfounded.
Findings of the Court
115 The fifth ground of appeal and its five limbs are directed against paragraphs of the judgment under appeal in which the General Court examined and rejected the two limbs of the third plea in law of the action at first instance which challenged the proportionality of the measure at issue in relation to the damage concerned suffered by AUA, in particular in that the Commission had authorised possible overcompensation of that damage.
116 It should be observed, as a preliminary point, that in accordance with the case-law cited in paragraph 23 above, aid granted on the basis of Article 107(2) TFEU must be necessary to achieve the aims set out in that provision, so that aid which improves the financial situation of the recipient undertaking without being necessary to achieve those aims cannot be considered as being compatible with the internal market.
117 It should also be borne in mind that, in accordance with the case-law cited in paragraph 24 above, only disadvantages caused directly by natural disasters or other exceptional occurrences may be compensated for under Article 107(2)(b) TFEU.
118 It follows that, as observed in paragraph 25 above, aid granted on that basis cannot exceed the losses incurred by the beneficiaries of that aid on account of the event concerned, which the General Court stated, in essence, in paragraph 83 of the judgment under appeal, while referring to paragraphs 40 and 41 of the judgment of 11 November 2004, Spain v Commission (C‑73/03, EU:C:2004:711).
119 In that regard, in so far as, by the first complaint of the first limb of their fifth ground of appeal, the appellants criticise the General Court for having incorrectly introduced a probability test in paragraph 83 of the judgment under appeal that is incompatible with the guidance in the judgment of 11 November 2004, Spain v Commission (C‑73/03, EU:C:2004:711), it should be held that that complaint is based on a misreading of the judgment under appeal in that the General Court did not introduce such a test. In paragraph 83 of that judgment, the General Court merely stated that, in so far as the amount of aid exceeds the amount of the losses incurred by the beneficiary of that aid, the part of the aid which exceeds the amount of those losses cannot fall within the scope of Article 107(2)(b) TFEU.
120 It follows that the complaint in question must be rejected as unfounded.
121 As regards the second complaint of the first limb of the fifth ground of appeal, by which the appellants submit that the General Court was wrong to hold, in paragraphs 84 to 88 of the judgment under appeal, that, in the light of the reasoning of the decision at issue, the Commission was entitled to take into account the damage suffered by AUA during the period from 9 March to 14 June 2020, it should be observed that the General Court, in particular in paragraph 86 of the judgment under appeal, set out in detail the circumstances, as apparent from that decision, relating to the travel restrictions that were imposed gradually owing to the COVID-19 pandemic, including during the period from 9 to 18 March 2020, which immediately preceded the immobilisation of AUA’s fleet, and which justified, in the assessment of the General Court, taking that latter period into account.
122 The General Court thereby concluded, in paragraph 87 of the judgment under appeal, that, in view of the progressive deterioration of travel conditions resulting from those restrictions, which led to the cancellation and rescheduling of AUA flights during the period from 9 March to 14 June 2020, the Commission could take into account, without committing any error, the damage caused to AUA by those cancellations and rescheduling during that period.
123 It should be held that the General Court did not commit any error of law in that regard. It is sufficient to point out that the finding, which is not disputed as such by the appellants, that there was a ‘progressive deterioration’ of travel conditions from 9 March 2020 resulting from those restrictions, allowed the General Court to confirm that the Commission was entitled to take account of the damage caused to AUA as of that date.
124 It follows that the second complaint of the first limb of the fifth ground of appeal and consequently that first limb must be rejected as unfounded.
125 The second limb of this ground of appeal alleges, in essence, that in its examination of whether the Commission was entitled to find, first, that the measure at issue was proportionate in relation to the damage concerned suffered by AUA as a result of the COVID-19 pandemic and, second, that AUA did not receive overcompensation for its damage, the General Court was wrong to reject, in paragraph 95 of the judgment under appeal, the appellants’ argument that the Commission should have taken account of the damage suffered by airlines operating in Austria other than AUA.
126 In that connection, as regards the proportionality of an aid measure granted under Article 107(2)(b) TFEU in relation to the amount of that aid, it is apparent from paragraph 24 above that that amount cannot exceed that of the losses incurred by the beneficiary of that aid. Where, as in the present case, individual aid is involved, it follows that it is for the Commission to ascertain, when assessing the compatibility of the aid concerned with the internal market, whether the beneficiary does not obtain an amount of aid exceeding the amount of the damage it actually suffered as a result of the exceptional occurrence in question.
127 For the purposes of such an assessment concerning a particular airline, it is clearly irrelevant whether, or to what extent, other airlines have also suffered damage as a result of the same event (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 77).
128 In addition, it is apparent from the findings in paragraphs 44 to 54 above that the appellants are wrong to claim in support of their second ground of appeal that the General Court erred in law in deciding that the Member State concerned is not required to take into account all the damage caused by the exceptional occurrence in question or to grant all victims of that damage the benefit of the aid concerned. The General Court was therefore correct to hold in paragraph 95 of the judgment under appeal, on the basis of those considerations, that the Commission was not required to assess, in the decision at issue, the damage that other airlines might have suffered.
129 Lastly, the appellants simply assert that it is contradictory of the General Court to justify the necessity of the measure at issue by referring to AUA’s competitive situation, but to fail to take that situation into account when assessing the proportionality of that measure; however, they do not point precisely to legal arguments that specifically support that assertion.
130 It follows that the second limb of the fifth ground of appeal must be rejected.
131 By the third limb of this ground of appeal, the appellants submit that the General Court, in paragraphs 101 to 108 of the judgment under appeal, was wrong to reject their argument that the Commission failed to take into account any additional aid from DLH in favour of AUA.
132 The first and second complaints raised in support of this third limb merely refer, in essence, to the arguments made in the first ground of appeal, or even repeat them. They must be rejected for the reasons set out in paragraphs 22 to 31 above.
133 As regards the third complaint of this third limb, by which the appellants claim that the General Court erred in law in stating, in paragraph 108 of the judgment under appeal, that they ‘adduced no specific and substantiated evidence to show that all or some of the aid measures in question are intended to cover the same eligible costs as those included in the damage which the measure at issue seeks to remedy’, thus systematically placing the burden of proof on the appellants, it should be observed that it is in principle for the person who alleges facts in support of a claim or argument to provide proof of their reality (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 72 and the case-law cited).
134 The General Court therefore did not disregard the rules governing the burden of proof in finding, in paragraph 108 of the judgment under appeal, that the appellants had not adduced evidence of the facts relied on in support of their argument that all or some of the aid measures in question were intended to cover the same eligible costs as those included in the damage which the measure at issue sought to remedy. Furthermore, the appellants have not put forward any argument capable of demonstrating that the General Court, in making such a finding, vitiated that judgment by distortion.
135 It follows that the third limb of the fifth ground of appeal must be dismissed as unfounded.
136 By the fourth limb of the fifth ground of appeal, the appellants submit that the General Court, in paragraphs 113 to 116 of the judgment under appeal, erred in law and distorted the facts in rejecting their argument that the aid granted on the basis of Article 107(3)(b) TFEU to AUA under the Austrian aid scheme in the form of a State guarantee could cover the same costs as those that are the subject matter of the measure at issue, which was granted on the basis of Article 107(2)(b) TFEU.
137 In that regard, it should be observed, as a preliminary point, that there is nothing, in principle, to preclude a concurrent application of those provisions with respect to the same event, such as the COVID-19 pandemic, provided that the conditions laid down in each of those provisions are met (see, to that effect, judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraphs 50 to 52), including those relating to the proportionality of the measure concerned and to there being no overcompensation of the damage at issue.
138 In the present case, it must be found, as regards the first complaint of the fourth limb of the fifth ground of appeal, that – far from finding that solely because the aid to AUA under the Austrian aid scheme and the measure at issue were based respectively on Article 107(3)(b) TFEU and Article 107(2)(b) TFEU and thus pursued different objectives, there could be no question of them covering the same costs and thus of giving rise to overcompensation of the damage to AUA – the General Court held, in the light in particular of what was shown by the decision at issue, that such was not the situation in the present case, since, among other things, the aid granted to AUA under the Austrian aid scheme was intended to cover the losses suffered by AUA during the second half of 2020, whereas the measure at issue was intended to cover the damage to AUA during the period from 9 March to 14 June 2020 owing to the travel restrictions imposed during the COVID-19 pandemic.
139 In those circumstances, the General Court did not err in law when it held, in paragraph 114 of the judgment under appeal, first, that the explanation in paragraph 87 of the decision at issue, according to which the aid granted to AUA under the Austrian aid scheme was intended to cover losses it had suffered which were not directly caused by the cancellation and rescheduling of AUA’s flights during that period on account of travel restrictions, was consistent with the various objectives of that aid and of the measure at issue, and, second, that the absence of specifics in that regard in that decision could not call into question the legality of that decision.
140 Likewise, the General Court did not err in law in finding in paragraphs 115 and 116 of the judgment under appeal – to which the second and third complaints of the fourth limb of the fifth ground of appeal relate – that the exact estimate of the losses which the aid granted to AUA under the Austrian aid scheme was intended to cover had no bearing on the lawfulness of the decision at issue and that the estimated amount of that aid was not subject to review by the General Court in the dispute brought before it, particularly in the light of the finding, in paragraphs 112 to 115 of that judgment, that that aid and the measure at issue were intended to cover different losses or damages.
141 First, as regards paragraph 115 of the judgment under appeal, the appellants merely assert that if the State guarantee granted to AUA under the Austrian aid scheme exceeds the losses that that aid scheme was intended to cover then such a scheme ‘will necessarily contribute to the other losses suffered by AUA’, without further substantiating that assertion. Second, as regards paragraph 116 of that judgment, it is common ground that the legality of the aid scheme in question was not subject to review by the General Court, which the appellants, moreover, do not as such dispute. In addition, they cannot reasonably claim that the amount of aid granted to AUA under that aid scheme was closely related to the proportionality of the measure at issue since those two aid measures were intended to cover different losses.
142 In so far as the appellants, furthermore, allege distortion of the facts in the fourth limb of their fifth ground of appeal, it must be held that they have not put forward any arguments capable of demonstrating that paragraphs 113 to 116 of the judgment under appeal are vitiated by such distortion.
143 It follows from the foregoing that the fourth limb of the fifth ground of appeal must be rejected.
144 By the fifth limb of that ground of appeal, the appellants allege, in essence, that the General Court erred in law in finding, in paragraphs 119 and 120 of the judgment under appeal, that the Commission was not required, for the purpose of assessing the compatibility of the measure at issue with the internal market under Article 107(2)(b) TFEU, and in particular its proportionality, to take into consideration the competitive advantage granted to AUA resulting from the fact that it was the only airline to benefit from that measure.
145 In that regard, it must be observed that, contrary to what the appellants maintain, the judgment of 21 December 2016, Commission v Aer Lingus and Ryanair Designated Activity (C‑164/15 P and C‑165/15 P, EU:C:2016:990), to which the General Court referred in paragraph 119 of the judgment under appeal, although it concerns the determination of the amount of unlawful aid for the purposes of its recovery, is relevant in the present case, in so far as it may be inferred from paragraph 92 of that judgment that the advantage which aid confers on its recipient does not include any economic benefit that the recipient might obtain through exploiting that advantage (see, to that effect, judgments of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 84, and of 23 November 2023, Ryanair v Commission, C‑210/21 P, EU:C:2023:908, paragraph 98).
146 Accordingly, the Court of Justice has already held that, in order to determine whether there has been any overcompensation of the damage suffered by the beneficiary of aid as a result of the exceptional occurrence at issue, the Commission must not take into account any advantages that that beneficiary might have indirectly derived from that aid, such as the competitive advantage alleged by the appellants (see, to that effect, judgments of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 85, and of 23 November 2023, Ryanair v Commission, C‑210/21 P, EU:C:2023:908, paragraph 99).
147 It follows that the General Court did not err in law in holding in paragraphs 119 to 120 of the judgment under appeal that the Commission was not required to take into account the competitive advantage that was alleged by the appellants.
148 In the light of the foregoing, the fifth limb of the fifth ground of appeal must be rejected as unfounded as must, consequently, that ground of appeal in its entirety.
The sixth ground of appeal
Arguments of the parties
149 By their sixth ground of appeal, the appellants claim that the General Court erred in law and vitiated the judgment under appeal by distortion in finding, in paragraphs 125 and 126 of that judgment, that the fourth plea in their action at first instance – relating to an infringement of their procedural rights on the ground that the Commission had refused to initiate the formal investigation procedure provided for in Article 108(2) TFEU – was devoid of purpose owing to the rejection of the first to third pleas of that action and lacked any independent content in relation to those pleas.
150 Contrary to what the General Court held, that fourth plea did have content that was independent of the first to third pleas. Judicial review of the existence of serious difficulties that should have led to the initiation of the formal investigation procedure provided for in Article 108(2) TFEU differs from review of an error of law or a manifest error of assessment by the Commission in the substantive examination of the measure at issue. Such serious difficulties may thus be found to exist even though, contrary to what the appellants had also maintained, the Commission’s examination of the measure at issue was not vitiated by either a manifest error of assessment or an error of law.
151 Similarly, the fourth plea in the action at first instance was not devoid of purpose since the existence of such errors is demonstrated in an entirely different way to that of the existence of the aforementioned serious difficulties. Furthermore, the appellants raised autonomous arguments to that effect, showing, inter alia, that the Commission was missing market data on the structure of the aviation sector or information on the assessment of the damage caused to AUA by the COVID-19 pandemic and the amount of aid granted to it, which were of crucial importance for reviewing the compatibility of the measure at issue in the light of its alleged objective. Before the General Court the appellants identified specific shortcomings in the Commission’s information and highlighted serious difficulties such that their plea included independent content in relation to that of the first to third pleas of that action.
152 The Commission, the Federal Republic of Germany, the Republic of Austria and AUA submit that the sixth ground of appeal should be rejected as unfounded.
Findings of the Court
153 When an applicant seeks the annulment of a decision of the Commission not to raise objections in relation to State aid, it essentially contests the fact that that decision was adopted without the Commission initiating the formal investigation procedure provided for in Article 108(2) TFEU, thereby infringing the applicant’s procedural rights. In order to have its action for annulment upheld, the applicant may invoke any plea to show that the assessment of the information and evidence which the Commission had at its disposal during the preliminary examination phase of the measure notified should have raised doubts as to the compatibility of that measure with the internal market. The use of such arguments cannot, however, have the consequence of changing the subject matter of the application or altering the conditions of its admissibility. On the contrary, the existence of doubts concerning that compatibility is precisely the evidence which must be adduced in order to show that the Commission was required to initiate the formal investigation procedure under Article 108(2) TFEU and Article 6(1) of Council Regulation (EU) 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 108 [TFEU] (OJ 2015 L 248, p. 9) (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 143 and the case-law cited).
154 Accordingly, it is for the person making such a claim to show that doubts existed as to the compatibility of the aid with the internal market, meaning that the Commission was required to initiate that formal investigation procedure. Such proof must be sought both in the circumstances in which the decision was taken and in its content, on the basis of a body of corroborating evidence (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 144 and the case-law cited).
155 In particular, the insufficient or incomplete nature of the examination carried out by the Commission during the preliminary examination procedure is an indication that the Commission was faced with serious difficulties in assessing the compatibility of the notified measure with the internal market, which should have led it to initiate the formal investigation procedure (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 145 and the case-law cited).
156 As regards, first of all, the complaint that the General Court held, in paragraph 126 of the judgment under appeal, that the fourth plea in law in the action at first instance lacked any independent content, it should be observed that it is true, as the appellants have stated in their appeal, that if the existence of serious difficulties, for the purposes of the case-law of the Court of Justice referred to in the preceding paragraph, had been established, the decision at issue could have been annulled on that ground alone, even though it had not been established, moreover, that the Commission’s assessments as to substance were wrong in law or in fact (see, to that effect, judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 146 and the case-law cited).
157 The existence of such difficulties may be sought, inter alia, in those assessments and may, in principle, be established by pleas or arguments put forward by an applicant in order to challenge the merits of a decision not to raise objections, even if the examination of those pleas or arguments does not lead to the conclusion that those assessments by the Commission as to substance are wrong in fact or in law (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 147 and the case-law cited).
158 In the present case, it must be stated that the fourth plea in the appellants’ action at first instance alleged, in essence, that the examination of the measure at issue carried out by the Commission during the preliminary examination procedure was incomplete and insufficient and that the Commission would have made a different assessment of the compatibility of that measure if it had decided to initiate a formal investigation procedure under Article 108(2) TFEU. It is also apparent from that action that, in support of that plea, the appellants essentially either repeated in a condensed manner the arguments put forward in the first to third pleas in law of that action, relating to the merits of the decision at issue, or referred directly to those arguments.
159 In those circumstances, the General Court was fully entitled to find, in paragraph 126 of the judgment under appeal, that the fourth plea in the action at first instance lacked ‘any independent content’ in relation to the first to third pleas of that action, in that, having examined the substance of those latter pleas, including the arguments alleging that the examination carried out by the Commission was incomplete and insufficient, it was not required to assess separately the merits of that fourth plea, all the more so since, as the General Court also rightly pointed out in the aforementioned paragraph 126, the appellants had not, by that latter plea, put forward specific evidence capable of demonstrating the existence of possible serious difficulties encountered by the Commission in assessing the compatibility of the measure at issue with the internal market.
160 It follows that the General Court did not err in law in finding, in paragraph 126 of the judgment under appeal, that there was no need to rule on the merits of the fourth plea in the action at first instance. In those circumstances, it is not necessary, furthermore, to examine whether the General Court was entitled to hold, in paragraph 125 of that judgment, that that plea was subsidiary in nature and that it was deprived of its stated purpose.
161 Lastly, it must be held that the appellants have not put forward any argument capable of demonstrating that the General Court vitiated that judgment by distortion in its examination of that plea.
162 It follows from the foregoing that the sixth ground of appeal must be rejected as unfounded.
The seventh plea in law
Arguments of the parties
163 By their seventh ground of appeal, the appellants allege that the General Court erred in law and vitiated the judgment under appeal by distortion in that it held, in paragraphs 130 to 138 of that judgment, that the Commission had not infringed its obligation to state reasons under the second paragraph of Article 296 TFEU.
164 According to the appellants, the General Court accepted that the context in which the decision at issue was adopted, marked by the outbreak of the COVID-19 pandemic and the difficulties to which that pandemic may have led for the drafting of the Commission’s decisions, could justify the absence of certain crucial evidence from the statement of reasons for that decision, even though that evidence was necessary to allow the appellants to understand the reasoning behind the Commission’s findings in that decision. The interpretation of the second paragraph of Article 296 TFEU made by the General Court in the judgment under appeal is contrary to the case-law of the Court of Justice and deprives the obligation to state reasons set out in that provision of any practical effect.
165 The Commission, the Federal Republic of Germany, the Republic of Austria and AUA submit that the seventh ground of appeal should be rejected as unfounded.
Findings of the Court
166 It should be borne in mind that, according to settled case-law, the statement of reasons required by the second paragraph of Article 296 TFEU must be appropriate to the measure at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in such a way as to enable the persons concerned to ascertain the reasons for it and to enable the court having jurisdiction to exercise its power of review. The requirements to be satisfied by the statement of reasons depend on the circumstances of each case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations. It is not necessary for the reasoning to specify all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of the second paragraph of Article 296 TFEU must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (judgment of 2 September 2021, Commission v Tempus Energy and Tempus Energy Technology, C‑57/19 P, EU:C:2021:663, paragraph 198 and the case-law cited).
167 Specifically, as regards a decision taken under Article 108(3) TFEU not to raise objections in respect of an aid measure, as in the present case, the Court has held previously that such a decision, which is taken within a short period of time, must simply set out the reasons why the Commission takes the view that it is not faced with serious difficulties in assessing the compatibility of the aid at issue with the internal market, and that even a succinct statement of reasons for that decision must be regarded as sufficient for the purpose of satisfying the requirement to state adequate reasons laid down in the second paragraph of Article 296 TFEU, provided that it discloses in a clear and unequivocal fashion the reasons why the Commission considered that it was not faced with serious difficulties, the question whether the reasoning is well founded being a separate matter (see, to that effect, judgment of 2 September 2021, Commission v Tempus Energy and Tempus Energy Technology, C‑57/19 P, EU:C:2021:663, paragraph 199 and the case-law cited).
168 It is in the light of the foregoing considerations that it is necessary to examine whether the General Court erred in law in finding that the statement of reasons for the decision at issue was sufficient.
169 In the first place, the appellants complain that the General Court, in essence, relaxed the requirements relating to the Commission’s obligation to state reasons in the light, in particular, of the context of the COVID-19 pandemic in which the Commission had adopted the decision at issue. However, it suffices to state that there is nothing to show that the General Court relaxed the rules in such a fashion in referring, in paragraph 132 of the judgment under appeal, to the requirements to state reasons as they apply, according to the case-law of the Court of Justice, to a decision adopted at the conclusion of the preliminary phase of the procedure for reviewing aid under Article 108(3) TFEU.
170 In the second place, the appellants point to specific factors on which the Commission, in breach of that obligation, failed to provide reasons or failed to assess in the decision at issue, such as considering the risk of ‘spill-over’ of the aid received by DLH to AUA, the compliance of the measure at issue with the principle of equal treatment, the free provision of services and the freedom of establishment, an assessment of the value of the competitive advantage granted to AUA and other factors relating, in particular, to assessing the damage caused to AUA by the COVID-19 pandemic or the amount of aid granted to AUA.
171 It is apparent from paragraphs 133 to 137 of the judgment under appeal that the General Court found that those factors were either not relevant for the purposes of that decision or that sufficient reference was made to them in that decision for the Commission’s reasoning to be understood in that regard.
172 It does not appear that, by those findings, the General Court failed to have regard to the requirement to state reasons for a Commission decision taken under Article 108(3) TFEU not to raise objections, as follows from the case-law referred to in paragraphs 166 and 167 above, since that statement of reasons, in the present case, enables the appellants to ascertain the reasons for the decision at issue and the EU judicature to exercise its power of review with regard to that decision, as is, moreover, apparent from the judgment under appeal.
173 Furthermore, in so far as the line of argument put forward in the seventh ground of appeal seeks in reality to demonstrate that the decision at issue was adopted on the basis of an insufficient or legally incorrect assessment by the Commission, that line of argument relates to the merits of that decision rather than to the requirement to state reasons as an essential procedural requirement, such that it must be rejected in the light of the case-law referred to in paragraph 167 above.
174 It follows from the foregoing that the General Court did not err in law in holding, in paragraphs 130 to 138 of the judgment under appeal, that the decision at issue was sufficiently reasoned.
175 Lastly, it must be held that the appellants have not put forward any argument capable of demonstrating that the General Court vitiated that judgment by distortion in its examination of the fifth plea of the action at first instance.
176 It follows from the foregoing that the seventh ground of appeal must be rejected as unfounded.
177 Since none of the grounds of appeal raised by the appellants has been upheld, the appeal must be dismissed in its entirety.
Costs
178 In accordance with Article 184(2) of the Rules of Procedure, where the appeal is unfounded, the Court is to make a decision as to the costs.
179 Article 138(1) of those rules, applicable to appeal proceedings pursuant to Article 184(1) thereof, provides that the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the appellants have been unsuccessful and the Commission has applied for costs, they must be ordered to pay the Commission’s costs in addition to bearing their own.
180 Under Article 184(4) of those rules, where the appeal has not been brought by an intervener at first instance, the latter may not be ordered to pay costs in the appeal proceedings unless it participated in the written or oral part of the proceedings before the Court of Justice. Where an intervener at first instance takes part in the proceedings, the Court may decide that that party is to bear its own costs. Consequently, the Federal Republic of Germany, the Republic of Austria and AUA, interveners at first instance, having participated in the proceedings before the Court of Justice, are to bear their own costs.
On those grounds, the Court (Fourth Chamber) hereby:
1. Dismisses the appeal;
2. Orders Ryanair DAC and Laudamotion GmbH to bear their own costs and to pay those incurred by the European Commission;
3. Orders the Federal Republic of Germany, the Republic of Austria and Austrian Airlines AG to bear their own costs.
Lycourgos |
Spineanu-Matei |
Bonichot |
Rodin |
Rossi |
Delivered in open court in Luxembourg on 29 July 2024.
A. Calot Escobar |
C. Lycourgos |
Registrar |
President of the Chamber |
* Language of the case: English.