Land Rheinland-Pfalz v Deutsche Lufthansa (State aid - Aviation sector - Operational aid granted by Germany to Frankfurt-Hahn airport - Opinion) [2023] EUECJ C-466/21P

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(Appeal – State aid – Aviation sector – Operational aid granted by Germany to Frankfurt-Hahn airport – Decision not to raise objections – Action for annulment – Status as an ‘interested party’ – Safeguard of procedural rights – Concept of ‘overall scenario’)

1. By its appeal, Land Rheinland-Pfalz (Land of Rhineland-Palatinate, Germany; ‘the Land’) seeks the setting aside of the judgment of the General Court of the European Union of 19 May 2021, Deutsche Lufthansa v Commission (Case T‑218/18, not published, EU:T:2021:282; ‘the judgment under appeal’), by which the General Court annulled Commission Decision C(2017) 5289 final of 31 July 2017 on State aid SA.47969 (2017/N) implemented by Germany concerning operating aid granted to Frankfurt-Hahn airport (‘the decision at issue’).

2. In the context of the present case, that judgment forms the subject matter of two cross-appeals, by which the European Commission and Deutsche Lufthansa AG (‘DLH’) seek, respectively, to have that judgment set aside and to have it set aside in so far as it rejected the second complaint in the first part of the single plea put forward by DLH at first instance.

3. The Court of Justice is once again asked to rule on the issue of locus standi to bring proceedings against a decision by which the Commission decides to close the State aid administrative procedure on the ground that the aid does not give rise to any doubts as to its compatibility with the internal market. In that context, the Court is called upon to rule on the scope to be given to the concept of ‘interested party’ and on the circumstances in which such a party may be regarded as having relied, by its appeal, on an infringement of its procedural rights. In addition, the Court of Justice must resolve, inter alia, the issue of the substantive legality of the General Court’s use of the concept of ‘overall scenario’ in order to identify whether the aid under examination was transferred to another undertaking by the direct beneficiary of the aid. At the request of the Court of Justice, this Opinion will address only those legal issues.

4. On 7 April 2017, the Federal Republic of Germany notified the Commission of its intention to grant operating aid to Frankfurt-Hahn airport, on the basis that the airport was loss-making (‘the aid at issue’). That airport is operated by Flughafen Frankfurt-Hahn GmbH (‘FFHG’).

5. By the decision at issue, the Commission decided, in essence, that there was no need to initiate the formal investigation procedure under Article 108(2) TFEU since, although the measure constituted State aid within the meaning of Article 107(1) TFEU, it was compatible with the internal market under Article 107(3)(c) TFEU. In particular, in the decision at issue the Commission stated inter alia that there were no other airports in the catchment area of Frankfurt-Hahn airport.

6. Prior to the decision at issue, the Commission adopted two other decisions relating to measures taken by the Federal Republic of Germany for the benefit of Frankfurt-Hahn airport and Ryanair. The first of those decisions is Decision (EU) 2016/788 of 1 October 2014 on the State aid SA.32833 (11/C) (ex 11/NN) implemented by Germany concerning the financing arrangements for Frankfurt-Hahn airport put into place in 2009 to 2011 (OJ 2016 L 134, p. 1), which formed the subject matter of the order of 17 May 2019, Deutsche Lufthansa v Commission (T‑764/15, not published, EU:T:2019:349). The second is Decision (EU) 2016/789 of 1 October 2014 on the State aid SA.21121 (C29/08) (ex NN 54/07) implemented by Germany concerning the financing of Frankfurt-Hahn airport and the financial relations between the airport and Ryanair (OJ 2016 L 134, p. 46), which formed the subject matter of the judgment of 12 April 2019, Deutsche Lufthansa v Commission (T‑492/15, EU:T:2019:252). The appeals brought against that order and that judgment, respectively, were dismissed by the judgments of 15 July 2021, Deutsche Lufthansa v Commission (C‑453/19 P, EU:C:2021:608), and of 20 January 2022, Deutsche Lufthansa v Commission (C‑594/19 P, EU:C:2022:40).

7. Moreover, on 26 October 2018, the Commission initiated the formal investigation procedure, on the basis of a complaint received from the complainant, registered as Case SA.43260, concerning other measures in favour of Frankfurt-Hahn airport and Ryanair (‘the Hahn IV procedure’).

8. By application lodged at the Registry of the General Court on 29 March 2018, DLH brought an action for annulment of the decision at issue.

10. By the judgment under appeal, the General Court held that the Commission had failed to take proper account of all the criteria concerning the catchment area of Frankfurt-Hahn airport which it was required to assess under the Guidelines on State aid to airports and airlines (OJ 2014 C 99, p. 3) and that, accordingly, the Commission’s insufficient and incomplete analysis had not enabled it to overcome all doubts as to the compatibility of the aid at issue with the internal market. The General Court thus partially upheld DLH’s single plea in law and annulled the decision at issue.

III. The procedure before the Court of Justice and the forms of order sought

11. By its appeal, the Land asks the Court to set aside the judgment under appeal, definitively dismiss the action against the decision at issue and order DLH to pay the costs relating to the proceedings at first instance and on appeal.

12. DLH asks the Court to dismiss the appeal as inadmissible or, in any event, unfounded and order the Land to pay the costs.

13. The Commission asks the Court to set aside the judgment under appeal, declare the action at first instance inadmissible or, in the alternative, unfounded and order DLH to pay the costs relating to the proceedings at first instance and on appeal.

14. By its cross-appeal, DLH asks the Court to set aside the judgment under appeal in so far as it rejects the second complaint in the first part of its single plea and order the Land to pay the costs.

15. The Land asks the Court to dismiss DLH’s cross-appeal, set aside the judgment under appeal, definitively dismiss the action against the decision at issue and order DLH to pay the costs relating to the proceedings at first instance and on appeal.

16. The Commission requests that DLH’s cross-appeal be dismissed as inadmissible or, in the alternative, unfounded, and that DLH be ordered to pay the costs relating to the proceedings at first instance and on appeal.

17. By its cross-appeal, the Commission asks the Court to set aside the judgment under appeal, declare the action at first instance inadmissible or, in the alternative, unfounded and order DLH to pay the costs relating to the proceedings at first instance and on appeal.

18. DLH asks the Court to dismiss the Commission’s cross-appeal as inadmissible or, in any event, unfounded and order the Commission to pay the costs.

19. The Land asks the Court to allow the Commission’s cross-appeal, set aside the judgment under appeal, definitively dismiss the action against the decision at issue and order DLH to pay the costs relating to the proceedings at first instance and on appeal.

20. DLH, the Land and the Commission presented oral argument at the hearing held on 30 November 2022.

21. At the request of the Court, this Opinion concerns only the first grounds of the Land’s main appeal and of the Commission’s cross-appeal, which allege an error of law and a failure to state reasons in the judgment under appeal as regards the determination of whether DLH has locus standi in the present case, and the second ground of DLH’s cross-appeal, which alleges that the General Court incorrectly used the concept of ‘overall scenario’ in identifying whether the aid under examination was transferred to Ryanair by FFHG, and thus in assessing whether there was any doubt as to the compatibility of the aid at issue with the internal market.

A. The ground of appeal alleging that DLH does not have locus standi (first ground of the main appeal and first ground of the Commission’s cross-appeal)

22. The reasoning of the General Court which culminated in the recognition that DLH has locus standi, and therefore in the rejection of the plea that the action brought by DLH was inadmissible, is criticised by both the Land and the Commission in relation to the interpretation of the concept of ‘interested party’ and solely by the Land as regards DLH’s reliance on its procedural rights.

23. In paragraphs 39 to 56 of the judgment under appeal, the General Court held, in essence, that DLH was an ‘interested party’ within the meaning of Article 1(h) of Regulation (EU) 2015/1589 (2) for two reasons. First, in paragraph 50 of the judgment under appeal, the General Court stated that the aid at issue, which was granted to Frankfurt-Hahn airport, could affect the competitive position of Frankfurt Main airport, which is DLH’s main hub, and thereby affect the interests of that airline. Secondly, in paragraphs 51 to 54 of that judgment, the General Court pointed out that, by allowing Frankfurt-Hahn airport to continue its activities, the aid at issue enabled Ryanair to maintain the competitive pressure it exerts on DLH from that airport.

24. In paragraphs 61 to 64 of the judgment under appeal, the General Court held, in essence, that it was apparent from an overall analysis of the application for annulment that DLH had complained that the Commission had infringed its procedural rights in deciding not to initiate the formal investigation procedure.

25. Before beginning the analysis intended to ascertain the merits of the criticisms raised by the Land and by the Commission, it is necessary to make some preliminary observations in order to define the legal context in which the assessment of whether DLH has locus standi must be carried out.

26. According to the fourth paragraph of Article 263 TFEU, a natural or legal person has locus standi to institute proceedings against an EU act which is not addressed to him or her, provided that that act is of ‘direct and individual’ concern to that person.

27. To summarise the settled case-law, that person is ‘directly concerned’ where there is a direct relationship between the contested act and his or her legal situation, (3) and is ‘individually concerned’ where that act affects that person by reason of certain attributes peculiar to him or her, or by reason of a factual situation which differentiates him or her from all other persons. (4)

28. As already noted, those two conditions are different in nature, in so far as direct concern essentially relates to an applicant’s legal situation, whereas individual concern relates exclusively to his or her factual situation. (5)

29. Since the present case involves an action brought against a Commission decision on State aid, it must be borne in mind that, in the context of the procedure for reviewing State aid provided for in Article 108 TFEU, the preliminary stage of the review procedure under Article 108(3) TFEU, which is intended merely to allow the Commission to form a prima facie opinion on the partial or total compatibility of the aid in question, must be distinguished from the formal investigation stage under Article 108(2) TFEU. The formal stage is essential when the Commission has ‘serious difficulties’ in determining whether aid is compatible with the internal market. Accordingly, if the initial examination does not enable it to resolve all those difficulties, the Commission is under a duty, with a view to being fully informed, to carry out all the requisite consultations and for that purpose to initiate the formal investigation procedure. (6) It is therefore only in the context of the latter procedure that the Treaty imposes an obligation on the Commission to give the ‘parties concerned’ notice to submit their comments.

30. According to settled case-law dating back to the judgments in Cook v Commission (7) and Matra v Commission, (8) where, without initiating the formal investigation procedure, the Commission finds, by a decision taken at the end of the preliminary stage, that an aid is compatible with the internal market, the parties concerned may secure observance of their procedural rights only if they are able to challenge that decision before the EU judicature. Accordingly, an action for the annulment of such a decision, brought by a ‘party concerned’ for the purposes of Article 108(2) TFEU, is to be declared to be admissible where the person bringing an action seeks, by instituting proceedings, to safeguard the procedural rights available to him or her under the latter provision. (9) In such a situation, an applicant, unlike an applicant who calls into question the merits of a decision adopted after the formal investigation procedure, need not demonstrate that it has a particular status within the meaning of the case-law deriving from the judgment in Plaumann, which would be the case, in particular, if its market position were ‘substantially affected’ by the aid to which the decision at issue relates. (10)

31. The corresponding concept of ‘interested party’ was clarified by the EU legislature in Article 1(h) of Regulation (EC) No 659/1999, (11) which was succeeded by Article 1(h) of Regulation 2015/1589, which defines an ‘interested party’ as ‘any Member State and any person, undertaking or association of undertakings whose interests might be affected by the grant of aid, in particular the beneficiary of the aid, competing undertakings and trade associations’. Although that concept thus includes, in particular, a competing undertaking of the beneficiary of aid, it is settled case-law that that concept covers an indeterminate number of persons. (12) Accordingly, the Court has accepted that undertakings which are not direct competitors of the beneficiary of the aid may be categorised as ‘interested parties’ provided that it is demonstrated to the requisite legal standard that the aid is likely to have a specific effect on their situation. (13)

32. It is in the light of those observations that I shall now examine the specific criticisms put forward by the Land and by the Commission challenging the reasoning of the General Court leading the latter to hold that the action brought before it by DLH was admissible.

33. The Commission maintains that the General Court interpreted the concept of ‘indirect competitor’ too broadly, which led it to conclude incorrectly that DLH was an ‘interested party’ within the meaning of the case-law of the Court of Justice. On the one hand, the General Court failed to observe the requirements set out in the judgments in Kronoply and Austria v Scheucher-Fleisch and Others, (14) in which, as regards proof of the existence of indirect competition, the Court of Justice held that it was necessary to show, first, that the beneficiary of the aid and the indirect competitor were in a competitive relationship, at least with respect to a part of their activities, and, secondly, that the aid is such as to affect the competitive position of that competitor. On the other hand, the General Court failed to ascertain the actual effects of the aid in question on Frankfurt Main airport, in particular on its profitability, and on the flights provided both by DLH from Frankfurt Main airport and by Ryanair from Frankfurt-Hahn airport.

34. Although it is true, as the Commission states, that in paragraphs 45 and 46 of the judgment under appeal the General Court appears to have sought to characterise the relationship between the beneficiary of the aid at issue, FFHG, and the applicant, DLH, as being one of indirect competition, the interpretation in the case-law, as regards the question whether an undertaking which is not a direct competitor of the beneficiary of the aid is an ‘interested party’, is far more extensive than that put forward by the Commission.

35. As regards the first complaint, by which the Commission criticises the General Court for not having considered that the existence of indirect competition presupposes that the applicant and the beneficiary of the aid are in competition at least with respect to a part of their activities, it should be noted that that complaint is based on the judgments in Kronoply and Austria v Scheucher-Fleisch.

36. I do not believe that the Commission’s proposed interpretation of those judgments can be endorsed by the Court.

37. In the judgment in Kronoply, the Court categorised as an ‘interested party’ an undertaking which was not a direct competitor of the beneficiary of the aid but required the same raw material for its production process. However, it is not at all apparent from that judgment that, in so doing, the Court intended to limit recognition of that status, in a general manner, solely to undertakings which were in a competitive relationship with the beneficiary of the aid, at least with respect to a part of their activities.

38. In the case that gave rise to the judgment in Austria v Scheucher-Fleisch, the aid in question consisted in subsidies granted under a programme intended to encourage the production, treatment, processing and sale of agricultural products in Austria by means of a quality label and benefited all undertakings operating in the chain specific to that label, including certain slaughtering and butchering undertakings and their retail customers.

39. The applicants, which were undertakings specialising in the slaughter and butchering of animals that were not entitled to use that label, were held to be interested parties, as direct competitors of undertakings engaged in the same activity and entitled to use the quality label as well as indirect competitors of retailers using that label. The Court thus recognised that undertakings, such as the applicants, which did not operate at the same stage of production as retailers and, consequently, were not in a competitive relationship with them in relation to any part of their activities, may have the status of indirect competitors. (15)

40. Moreover, those judgments are part of a line of case-law in which the Court has, in my view, considered that undertakings which are not direct competitors of a beneficiary have the status of ‘interested party’ in a wider range of situations than that claimed by the Commission in the present case. A good illustration of that approach by the Court is set out in the judgment in 3F.

41. The case giving rise to that judgment concerned Danish rules, including fiscal measures, applicable to the Danish International Register of Shipping. In accordance with those rules, that register allowed shipowners whose vessels were registered in it to employ seafarers who were nationals of non-member countries and to pay them wages on the basis of their national laws that were lower than the wages which would have been paid under Danish law. In addition, all seafarers employed on those vessels were exempted from income tax, which meant that the seafarers’ wage claims against the shipowners were reduced.

42. In its judgment, the Court accepted that a seafarers’ trade union could be categorised as an ‘interested party’ on the ground that the aid in question was likely to have a specific effect on its situation and that that effect concerned its ‘competitive position’ not on the market in which the shipowners operated, but on the market for the supply of labour vis-à-vis other seafarers’ trade unions whose members were employed on vessels entered in the abovementioned register. (16)

43. Considered together with the judgments in Kronoply and Austria v Scheucher-Fleisch, the judgment in 3F could indicate that the concept of ‘interested party’ requires proof that the grant of aid has an effect on the applicant’s competitive position, irrespective of whether that effect concerns a different market from that on which the beneficiary of the aid operates.

44. Moreover, the recent judgment delivered by the Court in Ja zum Nürburgring v Commission (17) seems to have considerably broadened the scope of that concept.

45. In that judgment, the appellant association was recognised as an ‘interested party’ on the ground that the aid in question had been granted, in the context of the sale of the assets of the Nürburgring complex, to a private undertaking seeking to maximise profits and that this undermined the applicant’s general interest objectives, as well as its very existence, which was specifically linked to the Nürburgring race track. (18)

46. Consequently, the Commission’s complaint that the General Court erred in law in not requiring DLH to prove that it is in competition, if only partial, with Frankfurt-Hahn airport cannot, in my view, be upheld.

47. Concerning the second complaint, by which the Commission criticises the General Court for implicitly considering that it is not necessary to ascertain the actual effects produced by the grant of the aid for the purposes of categorising as an ‘interested party’ an undertaking which is not in competition with the beneficiary of the aid, it should be pointed out that the Commission refers once again to the judgments in Kronoply and Austria v Scheucher-Fleisch.

48. In my view, those judgments cannot serve to demonstrate that, in order to adopt a correct interpretation of the concept of ‘interested party’, the General Court should have ascertained the effects of the aid in question on Frankfurt Main airport, in particular on its profitability, and on the flights provided both by DLH from Frankfurt Main airport and by Ryanair from Frankfurt-Hahn airport.

49. As regards the first of those judgments, the Court of Justice upheld the General Court’s reasoning to the effect that the applicants had demonstrated that there had been an increase in the price of wood and that, despite the fact that those applicants had not established that such an increase was the result of the aid in question, it could not be ruled out that there had been negative effects for them. Far from making a finding concerning an actual effect of the grant of the aid, the Court of Justice referred to the increase in the price of wood solely for the purpose of strengthening its conclusion that there was a purely potential adverse effect on the applicants’ market position as a result of the grant of that aid. (19)

50. As regards the second judgment, none of the paragraphs in it seems to me to contain a finding by the Court that the aid for retailers had actual effects on the applicants (slaughtering and butchering undertakings not entitled to use the label).

51. Moreover, the judgments in 3F and Nürburgring, examined above, only confirm that a finding that the aid has actual effects is not necessary for the purpose of concluding that an undertaking which is not a direct competitor of the beneficiary may be categorised as an ‘interested party’.

(2) The failure of the applicant to demonstrate that its legal interests or legal situation have been affected

53. The Commission argues that the General Court misinterpreted the concept of ‘interested party’ in that it did not require DLH to demonstrate that the grant of the aid in question affected ‘its legal interests or its legal situation’.

54. In that regard, it is important to recall that the Court of Justice has consistently held that the concept of ‘interested party’ applies, inter alia, to an undertaking which is not a direct competitor of the beneficiary of the aid, provided that it demonstrates that ‘its interests could be adversely affected by the grant of the aid’ and, for that purpose, ‘establishes, to the requisite legal standard, that the aid is likely to have a specific effect on its situation’. (20) However, it does not seem to me to follow from that case-law that only undertakings whose legal interests or legal situation are likely to be affected may be recognised as having the status of ‘interested party’.

55. In support of its interpretation, the Commission cites the judgments in 3F and Nürburgring. With regard to the first judgment, it appears to take the view that the appellant, a seafarers’ trade union, was recognised as having the status of ‘interested party’ on the ground that the grant of the aid had affected its legal situation by altering its negotiating position vis-à-vis certain Danish shipowners, which, in my view, reflects a misunderstanding of the judgment. As already explained above, that status derived, according to the Court of Justice, from the effect on that union’s competitive position in relation to other seafarers’ trade unions in the negotiation of collective agreements, which had consequent repercussions on that union as regards its ability to recruit members. (21) In those circumstances, no change in the appellant’s legal situation was required. As regards the second judgment, the Commission maintains that the change in the legal situation allowing the conclusion that the appellant is an ‘interested party’ is explained by the fact that the general interest objective pursued by that appellant had been rendered ‘legally impracticable’ in so far as the beneficiary of the aid and purchaser of the Nürburgring complex was a private undertaking. Thus, the Commission appears to be alluding to the fact that the grant of the aid in question might result in a future change in the appellant’s legal status. For my part, I am of the view that the Court’s conclusion is based on the incompatibility between the objective pursued by the appellant and the objective of the undertaking receiving the aid, to the exclusion of any consideration relating, for example, to the possible winding-up of the appellant subsequently. (22)

56. Moreover, the irrelevance of the criterion relating to a change in an applicant’s legal interests or legal situation in the context of that assessment should be of no surprise. As explained earlier in this Opinion, locus standi as an ‘interested party’, in relation to a decision declaring aid to be compatible at the end of the preliminary examination procedure for aid, is intended to relax the condition requiring an applicant to be ‘individually concerned’ for the purposes of the fourth paragraph of Article 263 TFEU, as interpreted by the Court in the Plaumann line of case-law. Accordingly, the status of ‘interested party’ is an expression of the relevant legal test for assessing the condition of individual concern laid down by the FEU Treaty. As already explained, individual concern relates to the applicant’s factual situation and not to his or her legal situation.

57. In view of the foregoing, the General Court did not err in law in categorising DLH as an ‘interested party’ solely on the basis of its economic interests.

58. The other complaints put forward by the Commission in that regard cannot, in my view, cast doubt on the interpretation proposed.

59. Contrary to the view taken by the Commission, the requirement for the applicant’s legal interests or legal situation to be affected cannot be inferred from a parallel with the case-law on direct effect for the purposes of the fourth paragraph of Article 263 TFEU, (23) from a parallel with the case-law relating to the concept of ‘interest in the result of a case’, as set out in the second paragraph of Article 40 of the Statute of the Court of Justice of the European Union, or from the judgment in Scuola Elementare Maria Montessori v Commission, Commission v Scuola Elementare Maria Montessori and Commission v Ferracci (‘the judgment in Montessori’) (24)

60. The first line of case-law concerns the interpretation of the condition of being ‘directly concerned’ and is therefore of no relevance, for the reasons set out above.

61. The second line of case-law concerns a provision of the Statute of the Court according to which the right to intervene in cases before the Court of Justice of the European Union is open to the bodies, offices and agencies of the Union and to any other person which can establish an interest in the result of a case. According to that settled case-law, an interest in the result of a case must be understood as being a direct and present interest in the granting of the form of order sought by the party whom the prospective intervener wishes to support, which means it is necessary to ascertain whether the applicant for leave to intervene is directly affected by a Commission decision and whether its interest in the result of the case is established. As the Commission points out, the Court has made it clear that, in principle, an interest in the result of the case can be considered to be sufficiently direct only to the extent to which that result is likely to alter the legal position of the person seeking leave to intervene. (25) However, that assessment is analogous to that of direct effect for the purposes of the fourth paragraph of Article 263 TFEU and, as such, cannot be transposed to the context of the interpretation of the concept of ‘interested party’. In any event, that interpretation is the outcome of a balance, specific to interventions, struck between the requirement to facilitate assessment of the context of cases and the requirement to avoid multiple individual interventions which would compromise the effectiveness and proper course of the procedure. (26)

62. The judgment in Montessori (27) is irrelevant in this context, as the Court has already ruled in the judgment in Nürburgring. The judgment in Montessori did not discuss whether a person or undertaking was an ‘interested party’, but instead whether, in the light of a Commission decision which left intact all of the effects of the national measures at issue establishing an aid scheme, the legal position of a complainant who alleged that those measures placed it at a competitive disadvantage had been directly affected. (28)

(3) Failure to observe the obligation to state reasons regarding the existence of competition between DLH and Ryanair

63. The Commission and the Land also criticise a number of aspects of the General Court’s findings concerning the relationship between DLH and Ryanair, set out in paragraphs 51 to 54 of the judgment under appeal.

64. The Commission submits principally that, as regards the existence of competition between DLH and Ryanair, in paragraphs 52 and 53 of the judgment under appeal the General Court failed to observe the obligation to address all of its arguments.

65. First of all, it must be remembered that, in the context of an appeal, the purpose of review by the Court of Justice is inter alia to ascertain whether the General Court addressed, to the requisite legal standard, all the arguments put forward by the appellant. Moreover, it must be pointed out that the plea alleging that the General Court failed to address arguments relied on at first instance amounts essentially to relying on non-observance of the obligation to state reasons which derives from Article 36 of the Statute of the Court of Justice of the European Union, applicable to the General Court by virtue of the first paragraph of Article 53 of that statute, and from Article 117 of the Rules of Procedure of the General Court. It is important to add, however, that, in accordance with the settled case-law of the Court of Justice, the General Court is not required to provide an account which follows exhaustively and one by one all the arguments put forward by the parties to the case, and that the General Court’s reasoning may therefore be implicit, as long as it enables the persons concerned to know why it has not upheld their arguments and provides the Court of Justice with sufficient material for it to exercise its power of review. (29)

66. It should be noted that, in its pleadings at first instance, the Commission strongly disputed the claim that the flights offered by Ryanair from Frankfurt-Hahn airport were in competition with the flights to the same destinations offered by DLH from Frankfurt Main airport.

67. In that regard, the Commission had in particular pointed out, first, that DLH used Frankfurt Main airport as a hub and that the vast majority of its passengers were transit passengers, whereas Ryanair operates low-cost flights from Frankfurt-Hahn airport in the context of ‘point-to-point’ traffic and, secondly, that the alleged evidence adduced by DLH before the General Court did not contain any information supporting the existence of such competition, such as data on changes in passenger numbers and the profitability of air routes operated by DLH in parallel with Ryanair. (30)

68. The paragraphs of the judgment under appeal referred to in the Commission’s complaints, in particular paragraph 52 thereof, reflect an almost presumptive approach concerning the issue of the existence of competition between DLH and Ryanair, with the General Court merely affirming that the fact that the destinations served by those companies are the same ‘is such as to indicate that competition exists’. It seems to me that, in so doing, the General Court cannot be regarded as having implicitly addressed the arguments put forward by the Commission, which specifically sought to call into question whether there is necessarily a link between the premiss (the fact that the destinations served are the same) and the conclusion (the existence of competition). In my view, therefore, that reasoning can in no way be regarded as sufficient to enable the Commission to understand why its arguments were rejected and to enable the Court of Justice to exercise its power of judicial review.

69. It follows that the reasoning set out in paragraphs 51 to 54 of the judgment under appeal is vitiated by a failure to state reasons and that, consequently, the Court should uphold the present complaint.

70. In the light of that conclusion, it is not necessary to examine the other complaints put forward by the Land and the Commission relating to that part of the General Court’s reasoning.

(4) Infringement of the rules governing the burden of proof in determining the existence of competition between Frankfurt-Hahn and Frankfurt Main airports

71. The Commission complains, in essence, that the General Court relied on the alleged competition between Frankfurt Main airport and Frankfurt-Hahn airport and on the impact of the aid at issue on Frankfurt Main airport in order to establish the admissibility of DLH’s action, although no such arguments were put forward in the application for annulment.

72. Although the Commission relies on an infringement of the rules governing the burden of proof, it seems to me that a closer examination of the Commission’s complaint reveals that it is rather intended to challenge the General Court’s disregard of the rule that the parties should be heard.

73. I point out here that, according to the case-law of the Court, the rule that the parties should be heard does not merely confer on each party to proceedings the right to be apprised of the documents produced and observations made to the Court by the other party and to discuss them. It also implies a right for the parties to be apprised of the matters raised by those courts of their own motion, on which they intend basing their decision, and to discuss them. In order to satisfy the requirements relating to the right to a fair hearing, it is important for the parties to be apprised of, and to be able to debate and be heard on, the matters of fact and of law which will determine the outcome of the proceedings. (31)

74. In paragraph 50 of the judgment under appeal, the General Court seems to consider that the airports of Frankfurt-Hahn and Frankfurt Main are competitors.

75. In the part of its application concerning the admissibility of its action for annulment, DLH makes no mention of competition between those two airports and puts forward a line of argument based almost solely on the competitive relationship between it and Ryanair.

76. It should be noted that, in the introductory part of that application (paragraph 48), as well as in the part concerning the merits of the decision at issue (paragraphs 117 and 118), DLH seeks to demonstrate that the subsidy to Ryanair by FFHG enabled that airline to move to larger airports, in particular Frankfurt Main airport, and that the manager of the latter airport is now pursuing a strategy of attracting low-cost airlines. In that context, DLH criticises the Commission’s delimitation of the catchment area of Frankfurt-Hahn airport in its analysis of the compatibility of the aid in question with the internal market, and in particular paragraph 46 of the decision at issue.

77. I consider, however, that, in those circumstances, only a particularly sympathetic interpretation of that application, requiring a logical approach aimed at uncovering the implicit but necessary meaning of its wording, could lead to the inference that DLH considers that those two airports are in a competitive relationship and therefore result in that factor being taken into account in the assessment of whether DLH has demonstrated to the requisite legal standard that the aid in question is likely to have a specific effect on its situation.

78. Since the General Court thus infringed the rule that the parties should be heard, I propose that the Court uphold the present complaint.

(5) The error of law in determining whether the grant of the aid at issue is likely to have a specific effect on DLH’s situation on account of the disruption to the operation of Frankfurt Main airport

79. The Land argues that the General Court erred in law in holding, in paragraph 50 of the judgment under appeal, that the aid at issue could put competitive pressure on Frankfurt Main airport that may adversely affect its customers, including DLH.

80. Having suggested that the Court of Justice uphold the preceding complaint concerning infringement of the burden of proof as regards the absence of a claim that there was a competitive relationship between Frankfurt-Hahn and Frankfurt Main airports, I shall address the present complaint purely in the alternative.

81. Before assessing this complaint, it is necessary to point out that the relevant legal framework in the present case was clarified in the judgment recently delivered by the Court in the Solar Ileias Bompaina case.

82. That case concerned Greek rules which had the effect of reducing the feed-in tariffs paid to producers using renewable energy sources, such as the appellant, and were intended to make good the deficit on a special account previously established through the legislative process in order to finance feed-in tariffs, inter alia, for those producers. That account was financed mainly through a special contribution charged to consumers and through additional sources such as revenue from relevant market operators. According to the appellant, those rules resulted in the grant of aid to electricity suppliers because no contribution was payable by them. If those suppliers had been asked to contribute in order to make good that deficit, the appellant’s financial position would, in its view, have been more favourable, since it would not have been necessary to reduce the feed-in tariffs from which it benefited.

83. As regards the question whether the aid was likely to have a specific effect on the appellant’s situation, the Court stated in that judgment that, although the adverse effect on the interests of that appellant may be only potential, a risk of a specific effect on those same interests must be capable of being demonstrated to the requisite legal standard. (32) In other words, according to the Court, the relevant criterion is whether there is a potential causal link, established to the requisite legal standard, between the alleged aid and the actual prejudice to the interests or market position of the undertaking concerned. (33)

84. In accordance with those principles, the Court of Justice upheld the General Court’s finding that the appellant had not explained how the alleged exemption of electricity suppliers could have influenced the setting of the new feed-in tariffs applicable to it, given that the adjustments made were intended principally to offset the overcompensation previously granted to those producers. (34)

85. It is helpful, for the purposes of interpretation, to take a step back in order to remember that, as explained in point 30 of this Opinion, the case-law has broadened the circle of persons who can be categorised as ‘interested parties’, because it has decoupled that status from the existence of a competitive relationship between the applicant and the beneficiary of the aid.

86. As a result of that broadening, the evidential requirement regarding the potential causal link between the aid and actual prejudice to the applicant’s situation seems to be the real floodgate guarding against an action challenging a Commission decision, such as the decision at issue, from being transformed into a kind of actio popularis. Thus, in my view, the Court seems to call for that link to be construed in a relatively strict manner, although it is to be borne in mind that it requires only proof of a purely potential, rather than actual, effect on the applicant’s situation.

87. That approach entails, in my view, a requirement to prove that the aid at issue, in itself, and not merely the existence of a potential conflict of interests between its beneficiary and the applicant, is likely to have an effect on the applicant’s interests. (35)

88. In paragraph 50 of the judgment under appeal, the General Court held, in essence, that since Frankfurt Main airport is the main centre of operations for DLH’s flights and is located in the vicinity of the airport which is the beneficiary of the aid at issue, DLH has an interest in ensuring that the operation of Frankfurt Main airport is not disrupted by any adverse effect which the grant of the aid at issue may have on that airport’s competitive position.

89. There is, in my view, a manifest break in the causal chain thus established.

90. The General Court has not found any evidence that possible competitive pressure on Frankfurt Main airport would have a negative impact on its customers, such as DLH. In that regard, I agree with the Land’s observation that a line of reasoning based on general competition policy considerations could even lead to the opposite premiss, since competitive pressure might induce Frankfurt Main airport to offer better contractual terms to the airlines operating there.

91. In the light of the above considerations, I suggest that, if the Court of Justice reaches the conclusion that the complaint examined previously must be rejected, it should hold that the reasoning in paragraph 50 of the judgment under appeal contains an error of law and, consequently, uphold the present complaint.

92. The Land criticises the General Court, first, for having wrongly considered, in particular in paragraph 62 of the judgment under appeal, that DLH had complained in its application for annulment that the Commission had infringed its procedural rights by deciding not to initiate a formal investigation procedure and, secondly, for having failed to give adequate reasons for that finding.

93. According to settled case-law, it is not for the General Court to interpret an action challenging solely the merits of an aid assessment decision as such as seeking, in reality, to ensure observance of the procedural rights available to the applicant under Article 108(2) TFEU, where the applicant has not expressly put forward a plea to that effect. Such an interpretation of the plea would be tantamount to redefining the subject matter of the action. (36)

94. In the judgments in Kronoply and Austria v Scheucher-Fleisch, the Court of Justice confirmed that, where applicants seek at first instance the annulment of the Commission’s decision not to initiate the formal investigation procedure, the abovementioned limit on jurisdiction to construe pleas in law does not have the effect of preventing the General Court from examining arguments which the applicant has put forward regarding the substance, in order to ascertain whether strands of those arguments additionally support a plea, also put forward by the applicant, which expressly alleges the existence of serious difficulties justifying initiation of the formal investigation procedure. (37)

95. In the judgment in Belgium v Deutsche Post and DHL International, (38) the Court stated that it is not necessary for the application for annulment to contain a clear statement of a plea which is distinctly identifiable as seeking to safeguard the applicants’ procedural rights. It held that it is sufficient that, according to the actual wording of the application, those applicants submit that the failure to initiate the formal investigation procedure prevented them from benefiting from the procedural guarantees to which they are entitled. In such circumstances, the action for annulment is admissible, according to the Court of Justice, provided that the General Court rules only on the pleas in that action which seek to establish that the Commission should have initiated the formal investigation procedure. (39)

96. The circumstances of the present case appear to me to be similar. The action brought by DLH at first instance is directed against the Commission’s decision not to initiate the formal investigation procedure. Although DLH’s application for annulment does not contain a clear statement of a plea which is distinctly identifiable as seeking to safeguard its procedural rights, it is clear from the wording of that application, in particular from paragraphs 55 and 56 thereof, that DLH puts forward arguments which can be understood as criticising the Commission for failing to initiate that procedure.

97. However, in the judgment under appeal, the General Court failed to draw a distinction between the pleas, as required by the Court of Justice, and therefore erred in law. Accordingly, that complaint of the Land must, in my view, be upheld.

98. In any event, it seems to me that, on account of its excessively vague and succinct nature, paragraph 62 of the judgment under appeal cannot be regarded as fulfilling the requirements underlying the General Court’s obligation to state reasons. The General Court should have expressly referred to the paragraphs in DLH’s application for annulment which enabled it to support its general assessment that DLH’s reliance on its procedural rights was the result of ‘an overall analysis’ of that application.

B. Alleged misuse by the General Court of the concept of ‘overall scenario’ (first and third complaints in the second ground of DLH’s cross-appeal)

99. On the merits, DLH criticises in particular the reasoning set out in paragraphs 129 to 142 of the judgment under appeal, at the end of which the General Court rejected DLH’s complaints and held that the Commission was not required to take into account several measures adopted in favour of Ryanair for the purpose of assessing whether there were doubts as to the compatibility of the aid at issue with the internal market. In DLH’s view, that aid served to compensate FFHG for the losses specifically resulting from those measures in favour of Ryanair, with the result that that airline is in fact the indirect beneficiary of the aid at issue, a matter which ought to have raised doubts as to its compatibility with the internal market. The Commission contests that argument.

100. In the light of my proposal that the Court of Justice should conclude that the action brought by DLH before the General Court is inadmissible, the following reasoning must be understood as being put forward purely in the alternative.

101. It should first of all be noted that the General Court’s conclusion in paragraph 140 of the judgment under appeal is based on two findings. First, the General Court considers in paragraph 137 of the judgment under appeal, that certain measures in favour of Ryanair were the subject matter of the ‘Hahn IV procedure’. Then, in paragraphs 138 and 139 of that judgment, the General Court ruled that none of those measures formed part of an ‘overall scenario’ encompassing the aid at issue.

102. DLH contests in particular the merits of using the concept of ‘overall scenario’ to rule out the possibility that the aid at issue was transferred to Ryanair.

103. In that regard, I note that the three criteria used by the General Court for the purpose of determining whether there was an overall scenario are (i) the fact that the aid at issue and the measures under consideration were staggered over time, (ii) the change in shareholding structure between the conclusion of the contract and the grant of the aid and (iii) the different forms which those measures take.

104. As a result, the substantive content of the examination carried out by the General Court in order to ascertain whether the aid at issue and the other measures in question formed part of an ‘overall scenario’ corresponds to that of the analysis required by the case-law of the Court in order to establish whether a number of successive aid measures may be regarded as a single measure for the purposes of applying the rules on State aid. I point out here that the Court has recognised that that could be the case if State interventions, having regard to their chronology, their purpose and the circumstances of the undertaking at the time of those interventions, are so closely linked to each other that they are inseparable from one another. (40)

105. The present ground of appeal does not, however, concern the categorisation of a series of State interventions as State aid, since it is not disputed that the direct payment to FFHG is aid. The legal issue at the heart of this ground of appeal concerns the possible existence of an indirect beneficiary of that aid for the purpose of its recovery and, more specifically, whether the aid can be regarded as having been transferred to Ryanair.

106. I am therefore convinced that the application of the line of case-law arising from the judgment in Bouygues (41) is not relevant in the present case, which is further evidenced by the fact that the findings that the aid and the other measures at issue are staggered over time, that they take different forms or that the shareholding of FFHG has been changed cannot rule out the possibility that, through those measures, that aid may have benefited Ryanair.

107. Whether that transfer actually occurred can be determined only by applying the Court’s case-law on indirect advantage, as set out in the judgments in Germany v Commission, (42)Netherlands v Commission (43) and Mediaset v Commission. (44)

108. In paragraph 116 of the Notice on the notion of State aid, (45) the Commission summarised that case-law as requiring that ‘the foreseeable effects of the measure should be examined from an ex ante point of view’, and stated that ‘an indirect advantage is present if the measure is designed in such a way as to channel its secondary effects towards identifiable undertakings or groups of undertakings’. Whilst I agree with the Commission’s interpretation, I recently argued that a reading of that case-law shows that the presence of an indirect advantage arises from the content of the applicable provisions or from the content of those provisions in conjunction with the existing factual context. (46)

109. The criteria set out in the Bouygues line of case-law, as used by the General Court in paragraphs 138 and 139 of the judgment under appeal, are clearly of no relevance in that assessment.

110. In that regard, the judgment of the Court of Justice in Netherlands v Commission (47) may be referred to by way of example. In summary, the case concerned legislation establishing aid in the form of compensation provided to operators of Netherlands service stations located on the border with Germany, in order to mitigate the disparity between the levels of excise duty levied in the Netherlands and those in Germany, and a contract under which oil companies supplying those service stations were obliged to compensate those operators in connection with the forecourt discount corresponding to that disparity. In its judgment, the Court held that the aid had been transferred to the oil companies even though the measures in question were of a different nature, did not produce effects between the same parties and were staggered over time.

111. I therefore consider that the General Court should have applied the criterion arising from the case-law on indirect advantage for the purpose of examining whether the measure granting the aid at issue was designed in such a way that, at the very least, part of that aid benefited Ryanair. However, since it applied the criteria arising from the Bouygues line of case-law, the General Court, in my view, erred in law.

112. In the light of the foregoing, and in the event that it holds that the action brought by DLH before the General Court is admissible, the Court of Justice should, in my view, uphold the second ground of DLH’s cross-appeal.

113. In the light of the foregoing considerations, I propose that the Court should set aside the judgment under appeal, on the basis of the errors of law committed by the General Court in determining whether DLH has locus standi.

2 Council Regulation of 13 July 2015 laying down detailed rules for the application of Article 108 of the Treaty on the Functioning of the European Union (OJ 2015 L 248, p. 9).

3 Judgment of 30 June 2022, Danske Slagtermestre v Commission (C‑99/21 P, EU:C:2022:510, paragraph 45 and the case-law cited).

4 Judgment of 15 July 1963, Plaumann v Commission (25/62, EU:C:1963:17; ‘the judgment in Plaumann’; p. 107).

5 See, to that effect, the Opinion of Advocate General Wathelet in Joined Cases Scuola Elementare Maria Montessori v Commission, Commission v Scuola Elementare Maria Montessori and Commission v Ferracci (C‑622/16 P to C‑624/16 P, EU:C:2018:229, point 57).

6 See judgment of 3 September 2020, Vereniging tot Behoud van Natuurmonumenten in Nederland and Others v Commission (C‑817/18 P, EU:C:2020:637, paragraphs 75 and 77 and the case-law cited).

9 See, also, judgment of 15 July 2021, Deutsche Lufthansa v Commission (C‑453/19 P, EU:C:2021:608, paragraph 36).

10 See, inter alia, judgment of 17 September 2015, Mory and Others v Commission (C‑33/14 P, EU:C:2015:609, paragraph 97 and the case-law cited).

11 Council Regulation of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty (OJ 1999 L 83, p. 1).

12 Judgment of 31 January 2023, Commission v Braesch and Others (C‑284/21 P, EU:C:2023:58, paragraph 59).

13 Judgments of 9 July 2009, 3F v Commission (C‑319/07 P, EU:C:2009:435; ‘the judgment in 3F’; paragraph 33); of 24 May 2011, Commission v Kronoply and Kronotex (C‑83/09 P, EU:C:2011:341; ‘the judgment in Kronoply’; paragraphs 64 and 65); of 7 April 2022, Solar Ileias Bompaina v Commission (C‑429/20 P, EU:C:2022:282; ‘the Solar Ileias Bompaina judgment’; paragraph 35); and of 31 January 2023, Commission v Braesch and Others (C‑284/21 P, EU:C:2023:58, paragraph 60).

14 Judgment of 27 October 2011 (C‑47/10 P, EU:C:2011:698; ‘the judgment in Austria v Scheucher-Fleisch’).

17 Judgment of 2 September 2021, Ja zum Nürburgring v Commission (C‑647/19 P, EU:C:2021:666; ‘the judgment in Nürburgring’).

18 Judgment in Nürburgring, paragraph 66. I would like to point out that that case concerned an association that defended the interests of German motor sport in relation specifically to the Nürburgring race track and that its objective was to ensure the operation of that race track under economic conditions oriented towards the public interest so as to also allow access to it for sporting and other events.

23 That is to say, judgments of 28 April 2015, T & L Sugars and Sidul Açúcares v Commission (C‑456/13 P, EU:C:2015:284), and of 17 September 2015, Confederazione Cooperative Italiane and Others v Anicav and Others (C‑455/13 P, C‑457/13 P and C‑460/13 P, not published, EU:C:2015:616).

25 Judgment of 2 September 2021, Commission v Tempus Energy and Tempus Energy Technology (C‑57/19 P, EU:C:2021:663, paragraphs 6 and 7 and the case-law cited).

26 Order of the President of the Court of 1 September 2022, Google and Alphabet v Commission (C‑48/22 P, not published, EU:C:2022:668, paragraph 12 and the case-law cited).

29 See, by analogy, judgment of 11 May 2017, Dyson v Commission (C‑44/16 P, EU:C:2017:357, paragraph 37).

31 Judgment of 27 March 2014, OHIM v National Lottery Commission (C‑530/12 P, EU:C:2014:186, paragraph 54 and the case-law cited).

35 See, also, to that effect, judgment of 15 September 2021, CAPA and Others v Commission (T‑777/19, EU:T:2021:588, paragraph 89), which is currently under appeal before the Court.

36 See judgment in Nürburgring, paragraph 115 and the case-law cited. That case-law was strongly criticised as being ‘particularly complex and rather formalistic’ by Advocate General Mengozzi in his Opinion in British Aggregates v Commission (C‑487/06 P, EU:C:2008:419, points 70 to 75). See, also, the criticisms made by Advocate General Jacobs in his Opinion in Commission v Aktionsgemeinschaft Recht und Eigentum (C‑78/03 P, EU:C:2005:106, point 138) and the criticisms of Advocate General Bot in Joined Cases Germany and Others v Kronofrance (C‑75/05 P and C‑80/05 P, EU:C:2008:140, points 106 to 109).

37 Judgments in Kronoply, paragraph 56, and Austria v Scheucher-Fleisch, paragraphs 47 to 50.

39 Judgment in Belgium v Deutsche Post, paragraphs 61 to 63. I am convinced that paragraph 20 of the order of 19 December 2019, Lux-Rehab Non-Profit v Commission (C‑747/18 P, not published, EU:C:2019:1105) does not conflict with that judgment in so far as, when the Court states in that order that ‘the reasoning in [the judgment in Austria v Scheucher-Fleisch] does not allow the conclusion to be drawn that, in the absence of a plea alleging an infringement of procedural rights …, it is for the EU judicature to reinterpret a plea seeking to challenge the merits of the Commission’s decision not to raise objections as a plea alleging an infringement of those procedural rights’ (emphasis added), it is quite possible to take the view that it is not referring solely to a clear statement of pleas which are distinctly identifiable and contained in the application for annulment. The same considerations apply, in my view, to paragraphs 44 to 46 of the judgment of 13 December 2005, Commission v Aktionsgemeinschaft Recht und Eigentum (C‑78/03 P, EU:C:2005:761).

40 Judgment of 19 March 2013, Bouygues and Bouygues Télécom v Commission and Others and Commission v France and Others (C‑399/10 P and C‑401/10 P, EU:C:2013:175; ‘the judgment in Bouygues’; paragraph 104). The Court explains that, as State interventions take various forms and, according to one of the cardinal principles of State aid control, have to be assessed in relation to their effects, it cannot be excluded that several consecutive measures of State intervention must, for the purposes of Article 107(1) TFEU, be regarded as a single intervention (paragraph 103).

41 See, also, judgments of 4 June 2015, Commission v MOL (C‑15/14 P, EU:C:2015:362, paragraph 97); of 26 March 2020, Larko v Commission (C‑244/18 P, EU:C:2020:238, paragraph 33); and of 10 December 2020, Comune di Milano v Commission (C‑160/19 P, EU:C:2020:1012, paragraph 72).

44 Judgment of 28 July 2011 (C‑403/10 P, not published, EU:C:2011:533), which confirmed on that point the judgment of 15 June 2010, Mediaset v Commission (T‑177/07, EU:T:2010:233).

45 Commission Notice on the notion of State aid as referred to in Article 107(1) of the Treaty on the Functioning of the European Union (OJ 2016 C 262, p. 1).

46 See my Opinion in Joined Cases Spain and Others v Commission (C‑649/20 P, C‑658/20 P and C‑662/20 P, EU:C:2022:744, points 114 and 115).

47 Judgment of 13 June 2002, Netherlands v Commission (C‑382/99, EU:C:2002:363).

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Land Rheinland-Pfalz v Deutsche Lufthansa (State aid - Aviation sector - Operational aid granted by Germany to Frankfurt-Hahn airport - Opinion) [2023] EUECJ C-466/21P_O (09 March 2023) URL: http://www.bailii.org/eu/cases/EUECJ/2023/C46621P_O.html Cite as: [2023] EUECJ C-466/21P_O, ECLI:EU:C:2023:195, EU:C:2023:195

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