Ryanair v Commission (State aid) [2011] EUECJ T-442/07 (29 September 2011)

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(State aid – Aviation sector – Aid granted by the Italian authorities to Alitalia, Air One and Meridiana – Action for failure to act – Failure by the Commission to define its position – Obligation to act)

Ryanair Ltd, established in Dublin (Ireland), represented by E. Vahida and I.-G. Metaxas-Maragkidis, lawyers,

European Commission, represented by L. Flynn, S. Noë and E. Righini, acting as Agents,

Air One SpA, established in Chieti (Italy), represented by M. Merola, C. Santacroce and G. Belotti, lawyers,

1 On 3 November 2005, the applicant, Ryanair Ltd, sent a letter to the Commission of the European Communities, the subject-matter of which was a ‘complaint against the Italian Government for State aid to Italian Airlines’ (‘the complaint of 3 November 2005’).

2 In that complaint, the applicant referred to the airlines Volare and Alitalia. The applicant claimed, inter alia, that the Italian Government had written off massive amounts of debt accumulated by Alitalia, financed redundancy payments owed by Italian airlines and granted rebates on fuel costs, through the imposition of charges on all airlines operating in Italy. It also complained of the award to Alitalia of a further amount of EUR 35 million by way of compensation for loss caused by the attacks of 11 September 2001 in the United States. The applicant also called on the Commission Directorate-General for Energy and Transport (‘DG TREN’) to examine the Italian Government’s continuing preferential treatment of Alitalia and, in particular, the compensation granted following the attacks of 11 September 2001 (‘the 9/11 compensation’) and the reduction in airport charges. In that complaint, the applicant also drew attention to the fact that it was still awaiting publication of the Commission Decision of 7 June 2005 on Alitalia's industrial restructuring plan, which was finally published on 8 March 2006 (OJ 2006 L 69, p. 1; ‘the decision of 7 June 2005’).

3 By letter of 23 November 2005, the Commission, through the Director-General of DG TREN, acknowledged receipt of the complaint of 3 November 2005, which was registered on 4 November 2005. In that letter, the Commission addressed only the issue of State aid allegedly granted to Volare.

4 By letter of 13 December 2005, the subject-matter of which was a ‘complaint against the Italian Government for further State aid to Alitalia’, the applicant drew the Commission’s attention to the fact that the letter of 23 November 2005, by which the Commission acknowledged receipt of the applicant’s complaint of 3 November 2005, had failed to address the issue of the State aid allegedly granted to Alitalia. The applicant therefore reiterated its complaint concerning the 9/11 compensation and the reduction in airport charges. It also complained about the conditions of the transfer of Alitalia Servizi to Fintecna. The applicant again asked when the decision of 7 June 2005 would be published.

5 On 16 June 2006, the applicant sent a letter to the Commission addressed to the Director of Air Transport within DG TREN, the subject-matter of which was ‘Italian public service obligations’ (‘PSOs’). In that letter, the applicant criticised, in particular, the fact that it was clear from press cuttings that the airlines Air One and Meridiana had taken on 100 Sardinian employees of Alitalia. The applicant expressly requested that that issue be added to its previous complaint. By letter of 26 July 2006, the Director of Air Transport within DG TREN informed the applicant that a formal inquiry had been opened in connection with the PSOs in respect of Sardinia, in accordance with Article 4(3) of Council Regulation (EEC) No 2408/92 of 23 July 1992 on access for Community air carriers to intra-Community air routes (OJ 1992 L 240, p. 8). With regard to the question of the transfer of the 100 Sardinian employees of Alitalia (‘the transfer of the 100 Alitalia employees’), the Director for Air Transport requested the applicant to provide further information, telling it that he would, in the meantime, ask his colleagues in Unit A 4, ‘Internal Market and Competition’, to take the matter up with the Italian authorities.

6 By letter of 14 August 2006, the applicant acknowledged receipt of the letter of 26 July 2006 and stated that it did not have any more specific information regarding the transfer of the 100 Alitalia employees.

7 On 10 November and 22 December 2006, the applicant sent the Commission two letters concerning ‘PSOs on routes to Sardinia’ and ‘Recent News from Italy and Greece’, respectively. In the first letter, it stressed the importance of the Commission’s investigation into the introduction of PSO routes. In the second, the applicant reiterated its concerns about the way in which airport policy was developing in Italy.

8 On 2 August 2007, having received no response to its complaint of 3 November 2005, the applicant sent a letter of formal notice to the Commission, by which it formally called on it to act under Article 232 EC (‘the letter of formal notice’). In that letter, the applicant listed the letters it had sent to the Commission and the measures which it had complained of as constituting State aid. In addition, it requested the Commission to follow the procedures concerning the review of its complaint under Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 88 [EC] (OJ 1999 L 83, p. 1), Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty (OJ 2003 L 1, p. 1) and Commission Regulation (EC) No 773/2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles 81 and 82 of the EC Treaty (OJ 2004 L 123, p. 18).

9 By letter of 7 August 2007, the Commission acknowledged receipt of the letter of formal notice and stated that that letter had been passed to DG TREN.

10 By application lodged at the Registry of the Court on 30 November 2007, the applicant brought the present action.

11 By document lodged at the Registry of the Court on 25 March 2008, Air One sought leave to intervene in the present case in partial support of the form of order sought by the Commission. By order of 14 September 2009 the President of the Sixth Chamber granted leave to intervene. By letter of 26 October 2009, Air One informed the Court that it would not submit a statement in intervention but that it reserved the right to put forward its arguments, should it deem appropriate, at the hearing. By letter of 8 February 2011, however, Air One informed the Court that it would not attend the hearing.

12 Following a change in the composition of the Chambers of the General Court, the Judge-Rapporteur was assigned to the Fifth Chamber, to which the present case was consequently allocated.

13 By way of measures of organisation of procedure, as provided for in Article 64 of its Rules of Procedure, the Court (Fifth Chamber), on 5 January 2011, put questions to the parties, to which the latter replied within the prescribed period.

14 The parties presented oral argument and replied to the questions put by the Court at the hearing on 17 February 2011.

17 By letter of 15 April 2008, the applicant requested that the Court adopt measures of organisation of procedure seeking production of certain documents referred to by the Commission in the defence.

18 In its observations on that letter, lodged at the Court Registry on 30 April 2008, the Commission contended that the Court should reject the applicant’s request for measures of organisation of procedure.

19 As a preliminary point, the Court notes that in its action the applicant raises, in essence, seven pleas in law alleging failure of the Commission to act (i) in regard to the transfer of the 100 Alitalia employees, (ii) in regard to the conditions surrounding the transfer of Alitalia Servizi to Fintecna, (iii) in regard to the public financing of Alitalia’s redundancy payments and the failure of the Italian State to obtain the payment of debts owed by Alitalia to Italian airports, (iv) in regard to the 9/11 compensation, (v) in regard to the rebates on fuel costs granted to Italian airlines and to the reductions in airport charges at Italian hub airports, from which Alitalia, in particular, is claimed to have benefited, (vi) in regard to the restrictions on the activities of the applicant and other non-Italian airlines at regional airports and (vii) in regard to an infringement of competition law.

20 However, by letter of 28 January 2011, confirmed at the hearing, the applicant withdrew its second and seventh pleas concerning the conditions surrounding the transfer of Alitalia Servizi to Fintecna and the infringement of competition law, of which the Court took formal note.

The plea concerning failure to act with regard to the transfer of the 100 Alitalia employees

21 The Commission argues that a prerequisite for bringing an action for failure to act is that an applicant should have lodged a complaint on the matter concerned – which is not the case in this instance. It questions whether, in fact, the few lines inserted by the applicant in its letter of 16 June 2006 may reasonably be regarded as a complaint. The Commission also maintains that this plea should be declared inadmissible in view of the Court’s case-law, by virtue of which an action for failure to act is admissible only if the institution concerned has first been called on to act through a formal notice. It submits that, although the letter of formal notice did in fact refer to the issue of the transfer of the 100 Alitalia employees, the applicant’s formal and explicit request to act referred to its complaint of 3 November 2005, which did not cover that issue at all. The letter of 16 June 2006, which the applicant now considers to constitute a complaint, is mentioned only as one of the further letters in which the applicant ‘kept the Commission updated and repeatedly requested the Commission to act’. Since it is not sufficiently clear and precise to enable the Commission to ascertain in specific terms the content of the decision which it is being asked to adopt, the letter of formal notice cannot be regarded as formal notice for the purposes of Article 232 EC so far as the issue of the transfer of the 100 Alitalia employees is concerned.

22 In that regard, the Court recalls that, under the second paragraph of Article 232 EC, an action for failure to act is admissible only if the institution concerned has first been called upon to act. Giving the institution formal notice is an essential procedural requirement the effects of which are, firstly, to cause the two-month period within which the institution is required to define its position to begin to run and, secondly, to delimit any action that might be brought should the institution fail to define its position. Whilst there is no particular requirement as to form, the notice must be sufficiently clear and precise to enable the Commission to ascertain in specific terms the content of the decision which it is being asked to adopt and must make clear that its purpose is to compel the Commission to state its position (Case T-�17/96 TF1 v Commission [1999] ECR II-�1757, paragraph 41).

23 The Court holds that the letter of formal notice, which expressly refers to Article 232 EC, meets all the abovementioned requirements and may be regarded as a letter of formal notice for the purposes of Article 232 EC so far as the issue of the transfer of the 100 Alitalia employees is concerned.

24 Indeed, the applicant made clear that it had lodged a complaint on 3 November 2005 and had sent a number of letters to the Commission to keep it updated and to request it to act. Having made a point of mentioning all the letters it had sent the Commission, the applicant set out a full list of the measures about which it believed it had complained in those letters and which, in its view, constituted unlawful State aid. One of the measures mentioned was the transfer of the 100 Alitalia employees, regarding which matter the applicant expressly referred the Commission to its letter of 16 June 2006. The applicant also mentioned that Article 88 EC and Articles 10(1) and 13(1) of Regulation No 659/1999 required the Commission to conduct a diligent and impartial examination of a complaint alleging there to be aid incompatible with the common market. It stated that the Commission was required to adopt a decision declaring (i) that the State measures in question did not amount to aid within the meaning of Article 87(1) EC, (ii) that those measures were to be classified as aid within the meaning of Article 87(1) EC but were compatible with the common market under Article 87(2) and (3) EC, or (iii) that the procedure provided for in Article 88(2) EC had to be initiated. Finally, the applicant alerted the Commission to the fact that the formal notice constituted a step preliminary to proceedings against it under Article 232 EC for failure to act. It indicated to the Commission that if, within two months of receipt of the formal notice, the Commission had not defined its position, the applicant would promptly bring an action before the Court to have the infringement of the EC Treaty established.

25 Having regard to the content of the letter of formal notice, that letter must be held to constitute ‘formal notice’ for the purposes of Article 232 EC, as it unequivocally calls on the Commission to act with regard to all the measures set out. First, it enabled the Commission to determine the specific measures that it was called upon to take – namely to investigate those measures and adopt a decision. Second, its purpose was to compel the Commission to define its position on the measures complained of. Accordingly, the Commission could not have been unaware that, by sending the letter of formal notice, the applicant intended to bring proceedings for failure to act under Article 232 of the Treaty with regard to all those measures, should the Commission remain silent for two months following receipt of that letter.

26 Accordingly, the plea alleging failure to act as regards the transfer of the 100 Alitalia employees must be declared admissible.

27 Since the question whether the Commission was under a duty to act in respect of those various measures is not a condition for the admissibility of the action for failure to act, but a question which must be examined on the merits, it falls to be determined in the present case whether, as the applicant maintains, the Commission unlawfully failed to take any action with regard to the transfer of the 100 Alitalia employees, mentioned in the letter of 16 June 2006.

28 In that regard, it should be recalled that it is settled case-law that, in order to rule on the substance of a claim for a declaration that the Commission has failed to act, it is necessary to determine whether, at the time when the Commission was formally called upon to define its position within the meaning of Article 232 EC, it was under a duty to act (orders in Case T-�126/95 Dumez v Commission [1995] ECR II-�2863, paragraph 44, and in Case T-�286/97 Goldstein v Commission [1998] ECR II-�2629, paragraph 24, and judgment in Case T-�95/96 Gestevisión Telecinco v Commission [1998] ECR II-�3407, paragraph 71).

29 In the matter of State aid, the situations in which the Commission is required to act in respect of unlawful aid are governed by Regulation No 659/1999. Article 10(1) of that regulation provides: ‘[w]here the Commission has in its possession information from whatever source regarding alleged unlawful aid, it shall examine that information without delay’. Article 20(2) of the same regulation provides: ‘[a]ny interested party may inform the Commission of any alleged unlawful aid and any alleged misuse of aid’. That provision also states that ‘[w]here the Commission considers that on the basis of the information in its possession there are insufficient grounds for taking a view on the case, it shall inform the interested party thereof’.

30 Concerning the manner in which the Commission is required to act under Articles 10, 13 and 20 of Regulation No 659/1999, it should be recalled that, at paragraphs 37 to 40 of its judgment in Case C-�521/06 P Athinaïki Techniki v Commission [2008] ECR I-�5829, the Court of Justice held:

31 In the present case, it is therefore appropriate to determine whether, by the letter of 16 June 2006, the Commission was seised of a complaint or put in possession of information regarding alleged unlawful aid.

32 The Commission denies that the letter of 16 June 2006 is a complaint on the grounds, inter alia, that the applicant did not use the standard form, made available to interested parties, for reporting allegedly unlawful State aid, and that the letter of 16 June 2006 contains no indication that it was meant to be taken as a complaint. It also denies that it was under a duty to act under Article 10(1) of Regulation No 659/1999, since the letter contained no information regarding unlawful aid within the meaning of that provision.

33 In that regard, it is to be noted at the outset that, unlike the competition rules laid down in Articles 81 EC and 82 EC, in relation to which the lodging of a complaint is regulated by Regulations Nos 1/2003 and 773/2004, in the case of State aid no specific formal requirement attaches to the lodging of a complaint.

34 Concerning the Commission’s argument that the letter of 16 June 2006 is not a complaint because the applicant has not used the standard form, the Court considers it to be unfounded. As the applicant correctly maintains, use of that form is not required by any rule of European Union law and consequently cannot be set up as a condition of ‘admissibility’ for lodging a complaint concerning State aid.

35 As to the Commission’s argument that the letter of 16 June 2006 contained no indication that it was meant to constitute a complaint concerning the transfer of the 100 Alitalia employees, it must be rejected. Indeed, although that letter was headed ‘PSOs’, the applicant clearly referred therein to that transfer as State aid and expressly requested that the Commission add that matter to its previous complaint. The applicant also specifically requested DG TREN to conduct an investigation in order to determine what advantages might have been granted to Air One and Meridiana to convince them to take on the Alitalia employees. It should also be noted that the applicant had reiterated, in its letter of 14 August 2006, that that transfer could be regarded as State aid because it saved ‘Alitalia from having to pay redundancy to these employees’. Contrary to the Commission’s contention, the purpose of the letter of 16 June 2006 was clearly to bring a complaint before the Commission concerning the transfer of the 100 Alitalia employees.

36 In any event, irrespective of whether or not that complaint was founded, the Court considers that, when it received the letter of 16 June 2006, in which the transfer of the 100 Alitalia employees was clearly identified as State aid (an allegation repeated in the letter of 14 August 2006), the Commission was put in possession of ‘information … regarding alleged unlawful aid’ within the meaning of Article 10(1) of Regulation No 659/1999. Contrary to the Commission’s argument, that provision does not appear open to being interpreted as meaning that the Commission must receive detailed information in order to be regarded as having in its possession information regarding alleged unlawful aid – as is borne out by the wording of Article 20(2) of Regulation No 659/1999. That provision states that ‘[a]ny interested party may inform the Commission of any alleged unlawful aid’. Once it is in possession of the information, the Commission must, if it considers that ‘there are insufficient grounds for taking a view on the case’, inform the interested party that that is the case. It is thus apparent that the European Union legislature does not require that interested parties provide the Commission with detailed information in order for the Commission to be regarded as having in its possession information giving grounds for an examination to be undertaken.

37 Having regard to the contents of the letter of 16 June 2006, the Court concludes that a complaint, or, at the very least, information regarding alleged unlawful aid, was brought before the Commission. Therefore, according to the judgment cited at paragraph 30 above, the Commission was required to act in accordance with Article 10(1) and the first sentence of Article 20(2) of Regulation No 659/1999, by setting in motion the preliminary examination stage and examining the information without delay. That examination should have led the Commission, according to the same judgment, either to inform the applicant that there were insufficient grounds for taking a view on the case or, in any event, to adopt a decision under Article 4(2), (3) or (4) of Regulation No 659/1999.

38 In this case, it is common ground that the Commission neither informed the applicant that there were insufficient grounds for taking a view on the case nor adopted a decision under Article 4(2), (3) or (4) of Regulation No 659/1999, although it was required to do so. In the case of the transfer of the 100 Alitalia employees, the Commission had thus failed to act as of 2 October 2007, that date being two months after it was called on to act in that respect in the letter of formal notice.

39 Consequently, the plea alleging failure to act with regard to that transfer must be held to be founded.

The plea alleging failure to act with regard to (i) the public financing of Alitalia’s redundancy payments and (ii) the failure of the Italian State to obtain the payment of debts owed by Alitalia to Italian airports

40 The Commission disputes that the applicant lodged a complaint in respect of these measures. In any event, it submits that this plea should be declared inadmissible for the same reasons as those set out at paragraph 21 above, that is to say, that the letter of formal notice cannot be taken to be ‘formal notice’ for the purposes of Article 232 EC.

41 As regards the argument that the application is inadmissible in so far as it concerns the Commission’s failure to act with regard to the public financing of Alitalia’s redundancy payments and the inability of the Italian State to obtain payment of the debts owed by Alitalia to Italian airports, the Court observes that it was held at paragraph 25 above that, in view of the contents of the letter of formal notice, that letter constituted ‘formal notice’ for the purposes of Article 232 EC, as it unequivocally called on the Commission to act with regard to all the measures listed in the letter, which included the issue of the public financing of the redundancy payments and that of Alitalia’s failure to pay the debts owed to Italian airports.

42 Accordingly, the plea alleging failure to act with regard to those two measures must be declared admissible.

43 It should therefore be determined in this instance whether, as the applicant maintains, the Commission unlawfully failed to act with regard to the public financing of Alitalia’s redundancy payments and to the failure of the Italian State to obtain the payment of debts owed by Alitalia to Italian airports.

44 To that end, it is appropriate to determine whether, at the time when the Commission was formally called upon to define its position within the meaning of Article 232 EC, it was under a duty to act (see paragraph 28 above).

45 It must be held, firstly, that the Commission is correct in maintaining that no complaint exists so far as those two measures are concerned and, secondly, that nothing in the various letters sent by the applicant to the Commission can be described as ‘information… regarding alleged unlawful aid’ within the meaning of Article 10(1) of Regulation No 659/1999.

46 Indeed, the complaint of 3 November 2005, which mentioned the financing of redundancy payments owed by airlines in general, the letter of 13 December 2005, which mentioned only the reduction in airport charges to support Alitalia and the transfer of Alitalia Servizi to Fintecna, and the letters of 16 June, 10 November and 22 December 2006, gave no indication that Alitalia had benefited from those measures. As the Commission notes, the only mention of the financing of redundancy payments owed by Alitalia – but not of debts to airports – was in a letter from the applicant dated 5 April 2006, which stated that ‘the Italian Government [had] imposed a national tax on all airlines to finance [EUR] 440 million in redundancy payments to Alitalia’. However, such a statement cannot be regarded as a complaint, or as information within the meaning of Article 10(1) of Regulation No 659/1999. Although, as is clear from paragraph 36 above, the European Union legislature does not require interested parties to provide the Commission with detailed information in order for the Commission to be regarded as having in its possession information giving grounds for an examination to be undertaken, the interested party must, at the very least, specify that the measure complained of is alleged to be unlawful aid. However, that is not the case here. It was only in the letter of formal notice that the applicant claimed, for the first time, that Alitalia had benefited from those measures and that measures of that kind constituted unlawful aid.

47 It must therefore be concluded that, at the time when the Commission was given formal notice for the purposes of Article 232 EC, it was under no duty to act; consequently, in accordance with the case-law cited at paragraph 28 above, no finding of failure to act can be made against it so far as the public financing of Alitalia’s redundancy payments and the failure of the Italian State to obtain payment of debts owed by Alitalia to Italian airports are concerned.

48 Accordingly, the plea alleging a failure to act with regard to those measures must be rejected as unfounded.

49 It should be noted at the outset that the Commission does not dispute that the complaint of 3 November 2003 amounts to a ‘complaint’ with regard to the 9/11 compensation; nor does it dispute that that complaint, which was reiterated in the applicant’s letter of 13 December 2005, formed the subject-matter of a preliminary examination by the Commission. Indeed, it maintains that it acted upon the complaint by questioning the Italian authorities. The Commission argues, however, that the Italian legislation does not constitute a State aid measure, since there has been no transfer of State resources. It adds that the existence or otherwise of legislation which affords the State an option, but which has never been applied, is not a matter for State aid control.

50 In that regard, it should be observed that, as is apparent from the judgment cited at paragraph 30 above, Article 13 of Regulation No 659/1999 obliges the Commission to close the preliminary examination stage relating to potentially unlawful aid by adopting a decision pursuant to Article 4(2), (3) or (4) of that regulation.

51 Accordingly, even though the Commission took the view that the Italian legislation did not constitute a State aid measure and that the existence or otherwise of legislation which afforded the State an option, but which was not applied automatically, was not a matter for State aid control, it was required to adopt a decision under Article 4(2), (3) or (4) of Regulation No 659/1999 in order to close the preliminary examination stage.

52 Since it is common ground that the Commission did not adopt a decision in the case in point, it must be held that, in the case of the 9/11 compensation, it had failed to act as of 2 October 2007, that date being two months after it was called on to act in that respect in the letter of formal notice.

53 Consequently, the plea alleging failure to act with regard to the 9/11 compensation must be held to be founded.

The plea alleging failure to act with regard to (i) the rebates on fuel costs granted to Italian airlines and (ii) the reductions in airport charges at Italian hub airports, from which Alitalia, in particular, is claimed to have benefited

54 The Commission denies that it was obliged to take action in respect of these measures since the applicant did not lodge a complaint about them. In any event, it maintains that this plea should be declared inadmissible on the ground of lis pendens since the question of rebates on fuel costs and reductions in airport charges was also raised in Case T-�441/07, Ryanair v Commission, in which proceedings were commenced prior to proceedings in this case. At the hearing, the Commission claimed that the fact that the applicant had discontinued its action in Case T-�441/07, Ryanair v Commission, (order of the President of the Fifth Chamber of the Court of 5 October 2010 removing the case from the register in Case T-�441/07 Ryanair v Commission, not published in the ECR) should none the less not lead the Court to declare the present plea admissible.

55 The objection of lis pendens raised by the Commission must be rejected at the outset. Contrary to the Commission’s contention at the hearing, that objection has become devoid of purpose since the applicant discontinued its action in Case T-�441/07 (see, in that regard, Joined Cases T-�254/00, T-�270/00 and T-�277/00 Hôtel Cipriani and Others v Commission [2008] ECR II-�3269, paragraph 43).

57 It should therefore be determined in this instance whether, as the applicant maintains, the Commission unlawfully failed to act with regard to those measures.

58 To that end, it is appropriate to determine whether, at the time when the Commission was formally called upon to define its position within the meaning of Article 232 EC, it was under a duty to act (see paragraph 28 above).

59 The Commission argues that a necessary pre-condition for bringing an action for failure to act with regard to these measures was the lodging of a complaint by the applicant, which did not occur in this instance. The Commission questions whether the one-line allegation in the complaint of 3 November 2005 that there were rebates on fuel costs and reductions in airport charges may reasonably be regarded as a ‘complaint’.

60 In the defence, the Commission contended that in any event it acted with regard to the substance of that complaint. It stated, at point 42 of the defence, that it had received the complaint of 3 November 2005 on that same date. It made it clear that it had examined it and sent a letter to the Italian authorities on 13 February 2006, requesting them to send information on the new charging system applicable at all Italian airports. Therefore, it submitted that a preliminary examination began immediately. It added, at point 46 of the defence, that, following the applicant’s first letter, several exchanges of correspondence had taken place between it and the Italian authorities in order for the Commission to obtain all the information necessary to take a decision on whether or not to open an investigative procedure. It argues that it is settled case-law that the fact that the national authorities were questioned proves that ‘the Commission did not remain inactive after receiving the applicant’s complaint’. With regard to the duration of the preliminary investigation, the Commission submitted that the 21-month period that elapsed between the complaint of 3 November 2005 and the letter of formal notice was not excessive in view of the particular circumstances of the case, its context, the various procedural stages, the complexity of the case and its importance for the various parties involved.

61 However, in its reply to a written question of the Court and at the hearing, the Commission sought to clarify the issues of rebates on fuel costs and airport charges which, on its own admission, had been treated ambiguously in the defence. It confirmed that its principal line of defence, with regard to those measures, was that set out in point 41 of the defence – namely that, in the absence of a complaint concerning those measures, it was under no duty to act. In addition, it stated in essence that point 42 of the defence is not to be understood as meaning that it had treated the applicant’s complaint of 3 November 2005 as a complaint giving a right to an investigation. The Commission submits that point 42 merely means that it took action in the framework of a parallel procedure, initiated after complaints were lodged by complainants other than the applicant, during which there was an exchange of correspondence with the Italian authorities. At the hearing, the Commission stated that it was regrettable that it had not mentioned the parallel procedure but maintained that that did not make any difference in this particular case, since, given the contents of the complaint of 3 November 2005, it was not required to act.

62 In that regard, the Court notes that, with regard to the question of rebates on fuel costs, the Commission is correct in maintaining that no complaint exists. Moreover, nothing in the various letters sent by the applicant to the Commission can be regarded as ‘information … regarding alleged unlawful aid’ within the meaning of Article 10(1) of Regulation No 659/1999.

63 While the complaint of 3 November 2005 merely mentioned in general terms that the Italian Government had written off very large amounts of accumulated debts for Alitalia, financed redundancy payments owed by Italian airlines and granted rebates on fuel costs through the imposition of taxes on all airlines operating in Italy, the applicant’s subsequent letters made no mention at all of the issue of rebates from which Alitalia, in particular, was said to have benefited. The single sentence in the complaint of 3 November cannot be regarded either as a ‘complaint’ or as information within the meaning of Article 10(1) of Regulation No 659/1999, as the applicant gave no indication that those rebates were to be regarded as unlawful aid. It was only in the letter of formal notice that the applicant claimed, for the first time, that those measures were of benefit to Alitalia and that they constituted State aid.

64 It must therefore be held that, at the time when the Commission was formally called upon to define its position within the meaning of Article 232 EC, it was under no duty to act with regard to the rebates on fuel costs; consequently, in accordance with the case-law cited at paragraph 28 above, no finding of failure to act can be made against it in that regard.

65 Concerning the question of the reduction in airport charges from which Alitalia is alleged to have benefited, the Commission’s argument that no complaint was lodged on that matter must be rejected.

66 Firstly, in the complaint of 3 November 2005, the applicant requested that DG TREN examine the Italian Government’s favourable treatment of Alitalia, and in particular the reduction in airport charges. Secondly, in the letter of 13 December 2005, the applicant drew the Commission’s attention to the fact that the letter of 23 November 2005, in which the Commission acknowledged receipt of the complaint of 3 November 2005, had failed to address the question of the State aid allegedly granted to Alitalia, including, in particular, the reduction in airport charges. In its letter of 13 December 2005, the applicant therefore repeated its complaint concerning the reduction of airport charges to support Alitalia. Contrary to the Commission’s contention, the letters of 3 November and 13 December 2005 must therefore be found clearly to have been intended to bring a complaint before the Commission concerning reductions in airport charges at hub airports, from which Alitalia, in particular, was claimed to have benefited.

67 In any event, regardless of whether or not that complaint was well founded, the Court considers that the Commission, upon receiving those two letters, was put in possession of ‘information … regarding alleged unlawful aid’ within the meaning of Article 10(1) of Regulation No 659/1999. Therefore, according to the judgment cited at paragraph 30 above, the Commission was required to act in accordance with Article 10(1) and the first sentence of Article 20(2) of Regulation No 659/1999, by setting the preliminary examination stage in motion and examining that information without delay. That examination should have led the Commission, according to the same judgment, either to inform the applicant that there were insufficient grounds for taking a view on the case or, in any event, to adopt a decision under Article 4(2), (3) or (4) of Regulation No 659/1999.

68 In this instance, the Commission does not deny that it did not undertake an examination, let alone inform the applicant that there were insufficient grounds for taking a view on the case or adopt a decision under Article 4(2), (3) or (4) of Regulation No 659/1999, although it was required to do so. It had thus failed to act as of 2 October 2007, that date being two months after it was called on to act by the letter of formal notice of 2 August 2007.

69 As a consequence, this plea must be held to be founded in so far as it concerns the reductions in airport charges at hub airports, from which Alitalia, in particular, is claimed to have benefited.

The plea alleging failure to act with regard to the restrictions on the activities of the applicant and other non-Italian airlines at regional airports

70 The Commission denies that it was under a duty to act with regard to these restrictions. It maintains, in substance, that neither the letter of 10 November nor that of 22 December 2006 referred to the restrictions as constituting State aid. In any event, it maintains that this plea should be declared inadmissible for the same reasons as those mentioned at paragraph 21 above, namely that the letter of formal notice cannot be regarded as a letter of formal notice for the purposes of Article 232 EC.

71 As regards the argument that the action is inadmissible in so far as it is directed against the Commission’s failure to act with regard to the restrictions on the activities of the applicant and other non-Italian airlines at regional airports, the Court observes that it was held at paragraph 25 above that, in view of the contents of the letter of formal notice, that letter constituted ‘formal notice’ for the purposes of Article 232 EC, as it unequivocally called on the Commission to act with regard to all the measures listed in the letter, which included those restrictions.

73 It is therefore necessary to ascertain whether, as the applicant maintains, the Commission unlawfully failed to act with regard to the restrictions on the activities of the applicant and other non-Italian airlines at regional airports.

74 To that end, it is appropriate to examine whether, at the time when the Commission was formally called upon to define its position within the meaning of Article 232 EC, it was under a duty to act (see paragraph 28 above).

75 It is quite clear, firstly, that the Commission is correct in maintaining that there is neither a complaint nor any other material concerning those restrictions and, secondly, that nothing in the various letters sent by the applicant to the Commission can be regarded as ‘information … regarding alleged unlawful aid’ within the meaning of Article 10(1) of Regulation No 659/1999.

76 It must therefore be concluded that, at the time when the Commission was given formal notice for the purposes of Article 232 EC, it was under no duty to act; consequently, in accordance with the case-law cited at paragraph 28 above, no finding of failure to act can be made against it so far as the restrictions on the activities of the applicant and other non-Italian airlines at regional airports are concerned.

77 It follows that the plea alleging failure to act with regard to those restrictions must be rejected as unfounded.

78 Accordingly, the claim of failure to act can be upheld only in relation to the aid allegedly granted by the Italian Republic in respect of the transfer of the 100 Alitalia employees, the 9/11 compensation and the reductions in airport charges at hub airports, from which Alitalia, in particular, is claimed to have benefited, there being no need to adopt the measures of organisation of procedure requested by the applicant.

79 Under the first subparagraph of Article 87(3) of the Rules of Procedure, where each party succeeds on some and fails on other heads, the Court may order that costs be shared or that each party bear its own costs. In the present case, since each of the parties has failed in part, the Court considers it fair, having regard to the circumstances of the case, to order each party to bear its own costs. Furthermore, the intervener must be ordered to bear its own costs pursuant to the third subparagraph of Article 87(4) of the Rules of Procedure.

1. Declares that the Commission of the European Communities failed to fulfil its obligations under the EC Treaty by failing to adopt a decision in respect of (i) the transfer of the 100 Alitalia employees, complained of in the letter of 16 June 2006 sent to the Commission by Ryanair Ltd, (ii) the compensation granted following the attacks of 11 September, complained of in the letters of 3 November and 13 December 2005 sent to the Commission by Ryanair, and (iii) the reductions in airport charges at hub airports, from which Alitalia, in particular, is claimed to have benefited, complained of in those letters of 3 November and 13 December 2005;

3. Orders each of the parties, including Air One SpA, to bear its own costs.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Ryanair v Commission (State aid) [2011] EUECJ T-442/07 (29 September 2011) URL: http://www.bailii.org/eu/cases/EUECJ/2011/T44207.html Cite as: [2011] EUECJ T-442/07, [2011] EUECJ T-442/7

Court of Justice of the European Communities (including Court of First Instance Decisions)