Ryanair DAC v European Commission.

• Jurisdiction: European Union
• ECLI: ECLI:EU:T:2021:195
• Date: 14 April 2021
• Docket Number: T-379/20
• Celex Number: 62020TJ0379
• Court: General Court (European Union)

JUDGMENT OF THE GENERAL COURT (Tenth Chamber, Extended Composition)

14 April 2021 ( *1 )

(State aid – Swedish air transport market – Aid granted by Sweden to an airline amid the Covid-19 pandemic – Guarantee – Decision not to raise any objections – Commitments as a condition to make the aid compatible with the internal market – Aid intended to make good the damage caused by an exceptional occurrence – Freedom of establishment – Free provision of services – Equal treatment – Duty to state reasons)

In Case T‑379/20,

Ryanair DAC, established in Swords (Ireland), represented by E. Vahida, F.-C. Laprévote, S. Rating, I.-G. Metaxas-Maranghidis and V. Blanc, lawyers,

applicant,

v

European Commission, represented by F. Tomat, D. Zukowska, L. Flynn and S. Noë, acting as Agents,

defendant,

supported by

French Republic, represented by E. de Moustier and P. Dodeller, acting as Agents,

by

Kingdom of Sweden, represented by C. Meyer-Seitz, A. Runeskjöld, M. Salborn Hodgson, H. Shev, H. Eklinder, R. Shahsavan Eriksson, O. Simonsson and J. Lundberg, acting as Agents,

and by

SAS AB, established in Stockholm (Sweden), represented by F. Sjövall, lawyer,

interveners,

APPLICATION under Article 263 TFEU for annulment of Commission Decision C(2020) 2784 final of 24 April 2020 on State Aid SA.57061 (2020/N) – Sweden – Compensation for the damage caused by the COVID-19 outbreak to Scandinavian Airlines,

THE GENERAL COURT (Tenth Chamber, Extended Composition),

composed of M. van der Woude, President, A. Kornezov, E. Buttigieg, K. Kowalik-Bańczyk (Rapporteur) and G. Hesse, Judges,

Registrar: E. Artemiou, Administrator,

having regard to the written part of the procedure and further to the hearing on 27 November 2020,

gives the following

Judgment

Background to the dispute

1 On 11 April 2020, the European Commission adopted Decision C(2020) 2366 final on State Aid SA.56812 (2020/N) – Sweden – COVID-19: Loan guarantee scheme to airlines, by which it concluded that an aid measure in the form of a scheme providing loan guarantees to certain airlines (‘the Swedish aid scheme’), notified by the Kingdom of Sweden on 3 April 2020 in accordance with Article 108(3) TFEU, first, constituted State aid within the meaning of Article 107(1) TFEU and, secondly, was compatible with the internal market on the basis of Article 107(3)(b) TFEU. That scheme is intended to provide airlines which are important to secure connectivity in Sweden and which have been issued operating licences by the Swedish authorities with sufficient liquidity, by means of a State guarantee, to preserve their economic activity during and after the Covid-19 pandemic.

2 On 21 April 2020, the Kingdom of Sweden, in accordance with Article 108(3) TFEU, notified the Commission of an aid measure (‘the measure at issue’), in the form of a guarantee on a revolving credit facility of up to 1.5 billion Swedish kronor (SEK) for SAS AB, on the ground that SAS was having difficulties in securing loans from credit institutions in the framework of the Swedish aid scheme. That measure is intended to compensate SAS in part for the damage resulting from the cancellation or rescheduling of its flights after the imposition of travel restrictions amid the Covid-19 pandemic.

3 On 24 April 2020, the Commission adopted Decision C(2020) 2784 final on State Aid SA.57061 (2020/N) – Sweden – Compensation for the damage caused by the COVID-19 outbreak to Scandinavian Airlines (‘the contested decision’), by which it concluded that the measure at issue, first, constituted State aid within the meaning of Article 107(1) TFEU and, secondly, was compatible with the internal market on the basis of Article 107(2)(b) TFEU.

Procedure and forms of order sought

4 By application lodged at the Court Registry on 19 June 2020, the applicant, Ryanair DAC, brought the present action.

5 By document lodged at the Court Registry on the same date, the applicant applied for the present action to be decided under an expedited procedure, in accordance with Articles 151 and 152 of the Rules of Procedure of the General Court. By decision of 15 July 2020, the General Court (Tenth Chamber) granted the request for an expedited procedure.

6 On a proposal from the Tenth Chamber, the Court decided, pursuant to Article 28 of the Rules of Procedure, to refer the case to a Chamber sitting in extended composition.

7 The Commission lodged the defence at the Court Registry on 29 July 2020.

8 Pursuant to Article 106(2) of the Rules of Procedure, the applicant submitted a reasoned request for a hearing on 13 August 2020.

9 By documents lodged at the Court Registry on 4, 7 and 21 September 2020 respectively, SAS, the Kingdom of Sweden and the French Republic sought leave to intervene in the present proceedings in support of the form of order sought by the Commission. By documents lodged at the Court Registry on 9, 15 and 30 September 2020 respectively, the applicant requested, in accordance with Article 144(7) of the Rules of Procedure, that certain information in the application and in the abbreviated version of the application not be disclosed to SAS, the Kingdom of Sweden and the French Republic.

10 By orders of 7 October 2020, the President of the Tenth Chamber (Extended Composition) of the Court granted the French Republic, the Kingdom of Sweden and SAS leave to intervene, and provisionally limited disclosure of the application and the abbreviated version of the application to the non-confidential versions produced by the applicant, pending the submission of any observations by the interveners on the request for confidential treatment.

11 By measures of organisation of procedure, on 7 October 2020, the French Republic, the Kingdom of Sweden and SAS were authorised, pursuant to Article 154(3) of the Rules of Procedure, to lodge a statement in intervention.

12 The applicant claims that the Court should: – annul the contested decision; – order the Commission to pay the costs.

13 The Commission and SAS contend that the Court should: – dismiss the action; – order the applicant to pay the costs.

14 The French Republic and the Kingdom of Sweden contend that the Court should dismiss the action.

Law

15 It should be recalled that the Courts of the European Union are entitled to assess, according to the circumstances of each case, whether the proper administration of justice justifies the dismissal of the action on its merits without first ruling on its admissibility (see, to that effect, judgments of 26 February 2002, Council v Boehringer, C‑23/00 P, EU:C:2002:118, paragraphs 51 and 52, and of 14 September 2016, Trajektna luka Split v Commission, T‑57/15, not published, EU:T:2016:470, paragraph 84). Therefore, having particular regard to the considerations which led to the present proceedings being expedited and the importance of a swift substantive response, both for the applicant and for the Commission and the Kingdom of Sweden, it is appropriate to begin by examining the merits of the action without first ruling on its admissibility.

16 The applicant raises five pleas in law in support of its action, alleging, first, that the Commission breached the requirement that aid granted under Article 107(2)(b) TFEU is not to make good the damage suffered by a single victim; second, that the measure at issue is not based on Article 107(2)(b) TFEU and that the Commission erred in finding that the measure at issue was proportionate in relation to the damage caused to SAS by the Covid-19 pandemic; third, that the Commission infringed various provisions on the liberalisation of air transport in the European Union; fourth, that the Commission infringed the applicant’s procedural rights by refusing to open the formal investigation procedure despite serious difficulties; and, fifth, that the Commission infringed the second paragraph of Article 296 TFEU.

The first plea in law, alleging that the Commission breached the requirement that aid granted under Article 107(2)(b) TFEU is not to make good the damage suffered by a single victim

17 The applicant submits that exceptional occurrences within the meaning of Article 107(2)(b) TFEU generally affect entire regions or industries, or even the entire economy. Accordingly, that provision is intended to make good the damage suffered by all the victims of those occurrences, not just some of them.

18 The Commission, the French Republic, the Kingdom of Sweden and SAS dispute the applicant’s line of argument.

19 In that regard, it should be borne in mind that under Article 107(2)(b) TFEU, aid to make good the damage caused by natural disasters or exceptional occurrences must be compatible with the internal market.

20 In the present case, the applicant does not dispute the Commission’s assessment in the contested decision that the Covid-19 pandemic should be regarded as an ‘exceptional occurrence’ within the meaning of Article 107(2)(b) TFEU. Furthermore, it is clear from the contested decision that the Covid-19 pandemic has led to the suspension of most air transport passenger services, having regard, in particular, to the closure of the borders of several EU Member States and to advice from the Swedish authorities to avoid non-essential travel.

21 Accordingly, the applicant is correct in observing that SAS is not the only company, nor the only airline, to be affected by the exceptional occurrence at issue.

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