Ryanair DAC v European Commission.

• Jurisdiction: European Union
• Celex Number: 62021CJ0353
• ECLI: ECLI:EU:C:2024:437
• Date: 30 May 2024
• Docket Number: C-353/21
• Court: Court of Justice (European Union)

THE COURT (Fourth Chamber)

30 May 2024 (*)

(Appeal – State aid – Article 107(3)(b) TFEU – Finnish air-transport market – Aid granted by the Republic of Finland to an airline amid the COVID-19 pandemic – Temporary Framework for State aid measures – State guarantee for a loan – Decision by the European Commission not to raise objections – Aid intended to remedy a serious disturbance in the economy – Principles of proportionality and of non-discrimination – Freedom of establishment and freedom to provide services)

In Case C‑353/21 P,

APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 4 June 2021,

Ryanair DAC, established in Swords (Ireland), represented initially by V. Blanc, F.-C. Laprévote, E. Vahida, avocats, D. Pérez de Lamo, S. Rating, abogados, and I.-G. Metaxas-Maranghidis, dikigoros, and subsequently by F.-C. Laprévote, E. Vahida, avocats, D. Pérez de Lamo, S. Rating, abogados, and I.-G. Metaxas-Maranghidis, dikigoros,

appellant,

the other parties to the proceedings being:

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

defendant at first instance,

Kingdom of Spain, represented by I. Herranz Elizalde, acting as Agent,

French Republic, represented initially by A.-L. Desjonquères, P. Dodeller, A. Ferrand, T. Stéhelin and N. Vincent, and subsequently by A.-L. Desjonquères, T. Stéhelin and N. Vincent, and finally by A.-L. Desjonquères and T. Stéhelin, acting as Agents,

Republic of Finland, represented by A. Laine and H. Leppo, acting as Agents,

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 its appeal, Ryanair DAC seeks to have set aside the judgment of the General Court of the European Union of 14 April 2021, Ryanair v Commission (Finnair I; COVID-19) (T‑388/20, ‘the judgment under appeal’, EU:T:2021:196), by which the General Court dismissed its action for annulment of Commission Decision C(2020) 3387 final of 18 May 2020 on State aid SA.56809 (2020/N) – Finland – COVID-19: State loan guarantee for Finnair (OJ 2020 C 269, 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 On 13 May 2020, the Republic of Finland notified the European Commission, in accordance with Article 108(3) TFEU, of an aid measure in the form of a State guarantee on a loan for Finnair Plc (‘the measure at issue’).

4 The measure at issue is designed to help Finnair obtain a loan of EUR 600 million from a pension fund to cover its working capital needs. The State guarantee covered 90% of the loan and was limited to a maximum duration of three years. The remaining 10% of the loan was covered by a commercial bank under market conditions. That guarantee was intended to be triggered only in the event of Finnair’s default with regard to the pension fund.

5 On 18 May 2020, the Commission adopted the decision at issue, by which, after concluding that the measure at issue constituted State aid within the meaning of Article 107(1) TFEU, it assessed its compatibility with the internal market in the light of its communication 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 its communication of 3 April 2020 (OJ 2020 C 112 I, p. 1) (‘the Temporary Framework’).

6 In that respect, the Commission considered, first, that the scenario presented by the Finnish authorities concerning the liquidity shortage which Finnair was going to face was realistic. Next, it noted that Finnair had attempted to obtain financing on the credit markets, but had not been able to cover all its liquidity needs. In particular, on 29 April 2020, Finnair announced that its board of directors had decided to prepare for a rights offering in the form of a share issue, due to losses caused by the COVID-19 outbreak which had decreased the company’s equity. In particular, the Commission noted in recitals 40 to 44 of the decision at issue that, at the time that decision was adopted, the amount of the share issue was approximately EUR 500 million and that it was uncertain whether that transaction would be successful. It concluded in recitals 45 to 52 of that decision that, in view of Finnair’s importance for the Finnish economy, the measure at issue was necessary, appropriate and proportionate to remedy a serious disturbance in the economy of that Member State. Finally, in recital 53 of the decision at issue, it ascertained whether the measure at issue fulfilled all the relevant conditions of the Temporary Framework and found that that was the case.

7 The Commission thus concluded that the measure at issue was compatible with the internal market pursuant to Article 107(3)(b) TFEU and therefore did not raise any objections to it.

The procedure before the General Court and the judgment under appeal

8 By application lodged at the Registry of the General Court on 26 June 2020, Ryanair brought an action for annulment of the decision at issue.

9 In support of its action, Ryanair put forward four pleas in law, alleging, first, infringement of Article 107(3)(b) TFEU; second, infringement of the principles of non-discrimination on grounds of nationality, freedom to provide services and freedom of establishment; third, infringement of its procedural rights as a result of the refusal 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, fourth, infringement of the second paragraph of Article 296 TFEU.

10 By the judgment under appeal, the General Court rejected as unfounded the first, second and fourth pleas in law raised by Ryanair. As regards the third plea, it held, in particular in view of the grounds which had led to the rejection of the first two pleas in the action, that it was not necessary to examine its merits. Consequently, the General Court dismissed the action in its entirety, without ruling on its admissibility.

Forms of order sought by the parties before the Court of Justice

11 By its appeal, Ryanair claims that the Court 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, and

– refer the case back to the General Court and reserve the costs.

12 The Commission and the Kingdom of Spain contend that the Court should:

– dismiss the appeal and

– order the appellant to pay the costs.

13 The French Republic and the Republic of Finland contend that the Court should dismiss the appeal.

The appeal

14 Ryanair relies on five grounds in support of its appeal. The first ground of appeal alleges an error of law and a manifest distortion of the facts in that the General Court rejected the plea in law alleging an infringement of Article 107(3)(b) TFEU. The second ground alleges an error of law in that the General Court wrongly rejected the plea alleging an infringement of the principle of non-discrimination. The third ground alleges an error of law and a manifest distortion of the facts in the examination of Ryanair’s argument relating to the infringement of the freedom of establishment and the freedom to provide services. The fourth ground of appeal alleges an error of law and a manifest distortion of the facts committed by the General Court in deciding not to examine the substance of the third plea alleging infringement of Ryanair’s procedural rights. The fifth ground of appeal alleges an error of law and a manifest distortion of the facts in that the General Court dismissed the fourth plea relating to an infringement of the Commission’s obligation to state reasons under the second paragraph of Article 296 TFEU.

The first ground of appeal

Arguments of the parties

15 By its first ground of appeal, which concerns paragraphs 31 to 64 of the judgment under appeal and consists of two limbs, Ryanair submits, in essence, that the General Court erred in law and manifestly distorted the facts in that it wrongly rejected the first limb of the first plea in law, alleging infringement of Article 107(3)(b) TFEU, by holding, first, that the measure at issue was appropriate to remedy a serious disturbance in the Finnish economy and, second, that the Commission was not required to weigh the beneficial effects of that measure against its adverse effects.

16 By the first limb of its first ground of appeal, Ryanair submits, first, that although the General Court correctly recognised, in paragraphs 32 and 33 of the judgment under appeal, that Article 107(3)(b) TFEU must, as a derogating provision, be interpreted strictly, it wrongly held in paragraph 41 of that judgment that that provision did not require the measure at issue to be capable in itself of remedying the serious disturbance in the economy of the Member State concerned. Such an interpretation would lead to any company being entitled to an individual aid measure under Article 107(3)(b) TFEU, provided that a serious disturbance in the economy is identified.

17 According to Ryanair, the General Court thus departed from the strict interpretation required by that provision in order to hold, in essence, in paragraphs 40 to 42 and 56 of the judgment under appeal, that it was sufficient that aid contributes to remedying the serious disturbance in the economy concerned in order to fall within the scope of that provision.

18 Second, by...