JUDGMENT OF THE GENERAL COURT (Tenth Chamber)

18 October 2023 (*)

(State aid – Romanian air transport market – Aid granted by Romania to TAROM in the context of the COVID-19 pandemic – State guarantee on loans – Decision not to raise any objections – Action for annulment – Locus standi – Substantial adverse effect on the applicant’s position on the market in question – Admissibility – Aid intended to make good the damage caused by an exceptional occurrence – Assessment of the damage – Causal link – Beneficiary’s pre-existing difficulties – Principle of non-discrimination – Freedom to provide services – Freedom of establishment – Obligation to state reasons)

In Case T‑332/21,

Wizz Air Hungary Légiközlekedési Zrt. (Wizz Air Hungary Zrt.), established in Budapest (Hungary), represented by E. Vahida, S. Rating and I.-G. Metaxas‑Maranghidis, lawyers,

applicant,

v

European Commission, represented by L. Flynn, V. Bottka and L. Nicolae, acting as Agents,

defendant,

THE GENERAL COURT (Tenth Chamber),

composed, at the time of the deliberations, of A. Kornezov, President, E. Buttigieg and G. Hesse (Rapporteur), Judges,

Registrar: S. Spyropoulos, Administrator,

having regard to the written part of the procedure,

further to the hearing on 27 October 2022,

gives the following

Judgment

1        By its action under Article 263 TFEU, the applicant, Wizz Air Hungary Légiközlekedési Zrt. (Wizz Air Hungary Zrt.), seeks the annulment of Commission Decision C(2020) 6910 final of 2 October 2020 on State Aid SA.56810 (2020/N) – Romania – COVID-19: Aid to TAROM (‘the contested decision’).

I.      Background to the dispute

2        Compania Nationala de Transporturi Aeriene Romane ‘TAROM SA’ (‘TAROM’) is a Romanian airline operating from a single airport hub, located at OTP Bucharest Henri Coandă International Airport (Romania). It is mainly active in the air transport of passengers, cargo and mail. At the beginning of 2020, TAROM employed 1 795 people and had a fleet of 29 aircraft. TAROM operated both domestic and international routes.

3        On 29 September 2020, following a pre-notification stage that had started on 10 April 2020, Romania notified the European Commission, in accordance with Article 108(3) TFEU, of an aid measure in favour of TAROM in the form of a Romanian State guarantee of 93 876 360.11 Romanian lei (RON) (approximately EUR 19 330 000) on a six-year loan (or a number of loans) which would be taken out by TAROM on the market (‘the measure at issue’). The Romanian State would provide a guarantee covering 100% of the loan or loans and the resulting interest and commissions to cover the losses generated by the COVID-19 pandemic.

4        The measure at issue is based on Article 107(2)(b) TFEU and is intended to make good the damage directly suffered by TAROM, during the period from 16 March to 30 June 2020 (‘the relevant period’), as a result of the travel restrictions and other containment measures aimed at reducing the spread of the COVID-19 pandemic.

5        On 2 October 2020, the Commission, without initiating the formal investigation procedure under Article 108(2) TFEU, adopted the contested decision, by which it found that the measure at issue constituted State aid within the meaning of Article 107(1) TFEU and that it was compatible with the internal market under Article 107(2)(b) TFEU.

II.    Forms of order sought

6        The applicant claims that the Court should:

–        annul the contested decision;

–        order the Commission to pay the costs.

7        The Commission contends that the Court should:

–        dismiss the action as unfounded;

–        order the applicant to pay the costs.

III. Law

A.      Admissibility

8        First, the applicant argues that it is an interested party for the purposes of Article 108(2) TFEU and Article 1(h) of Council Regulation (EU) 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 108 TFEU (OJ 2015 L 248, p. 9) and that it therefore has standing to bring proceedings in order to protect its procedural rights. Secondly, it submits that its competitive position on the market has been substantially affected by the measure at issue, that it is directly concerned by that measure and that, therefore, it is entitled to challenge also the contested decision on the merits.

9        The Commission does not dispute the admissibility of the action.

10      It should be borne in mind that, where the Commission adopts a decision not to raise objections on the basis of Article 4(3) of Regulation 2015/1589, as in the present case, it not only declares that the measures concerned are compatible with the internal market, but also, by implication, it refuses to initiate the formal investigation procedure laid down in Article 108(2) TFEU and Article 6(1) of that regulation (see judgment of 27 October 2011, Austria v Scheucher-Fleisch and Others, C‑47/10 P, EU:C:2011:698, paragraph 42 and the case-law cited). If, following the preliminary examination, it finds that the measure notified raises doubts as to its compatibility with the internal market, the Commission is required to adopt, on the basis of Article 4(4) of Regulation 2015/1589, a decision initiating the formal investigation procedure under Article 108(2) TFEU and Article 6(1) of that regulation. Under the latter provision, such a decision is to call upon the Member State concerned and upon other interested parties to submit comments within a prescribed period which must not as a rule exceed one month (judgment of 24 May 2011, Commission v Kronoply and Kronotex, C‑83/09 P, EU:C:2011:341, paragraph 46).

11      In the present case, following a preliminary examination, the Commission decided not to raise any objections to the measure at issue on the ground that it was compatible with the internal market, pursuant to Article 107(3)(b) TFEU. In so far as the formal investigation procedure was not initiated, the parties concerned, which could have submitted comments during that stage, were denied that opportunity. In order to remedy this, those parties are entitled to challenge the Commission’s decision not to initiate the formal investigation procedure before the EU Courts. Therefore, an action brought by a party concerned within the meaning of Article 108(2) TFEU for annulment of the decision not to raise any objections would be admissible in so far as that party would be seeking to safeguard the procedural rights available to it under that latter provision (see judgment of 18 November 2010, NDSHT v Commission, C‑322/09 P, EU:C:2010:701, paragraph 56 and the case-law cited).

12      In the light of Article 1(h) of Regulation 2015/1589, an undertaking competing with the beneficiary of an aid measure is a ‘party concerned’ for the purposes of Article 108(2) TFEU (judgment of 3 September 2020, Vereniging tot Behoud van Natuurmonumenten in Nederland and Others v Commission, C‑817/18 P, EU:C:2020:637, paragraph 50; see also, to that effect, judgment of 18 November 2010, NDSHT v Commission, C‑322/09 P, EU:C:2010:701, paragraph 59).

13      In the present case, it is not disputed that the applicant is a competitor of TAROM and that, therefore, it is an interested party within the meaning of Article 1(h) of Regulation 2015/1589, having standing to bring proceedings in order to safeguard the procedural rights it derives from Article 108(2) TFEU.

14      As to the applicant’s standing to challenge the contested decision on the merits, it must be borne in mind that the admissibility of an action brought by natural or legal persons against an act which is not addressed to them, in accordance with the fourth paragraph of Article 263 TFEU, is subject to the condition that they be accorded standing to bring proceedings, which arises in two situations. First, such proceedings may be instituted if the act is of direct and individual concern to them. Secondly, such persons may bring proceedings against a regulatory act not entailing implementing measures if that act is of direct concern to them (judgments of 17 September 2015, Mory and Others v Commission, C‑33/14 P, EU:C:2015:609, paragraphs 59 and 91, and of 13 March 2018, Industrias Químicas del Vallés v Commission, C‑244/16 P, EU:C:2018:177, paragraph 39).

15      Given that the contested decision, which was addressed to Romania, does not constitute a regulatory act under the fourth paragraph of Article 263 TFEU, since it is not an act of general application (see, to that effect, judgment of 3 October 2013, Inuit Tapiriit Kanatami and Others v Parliament and Council, C‑583/11 P, EU:C:2013:625, paragraph 56), it is for the Court to determine whether that decision is of direct and individual concern to the applicant, within the meaning of that provision.

16      In that regard, it is clear from settled case-law that persons other than those to whom a decision is addressed may claim to be individually concerned only if that decision affects them by reason of certain attributes which are peculiar to them or by reason of circumstances in which they are differentiated from all other persons and, by virtue of those factors, distinguishes them individually just as in the case of the person addressed (judgments of 15 July 1963, Plaumann v Commission, 25/62, EU:C:1963:17, p. 107; of 28 January 1986, Cofaz and Others v Commission, 169/84, EU:C:1986:42, paragraph 22; and of 22 November 2007, Sniace v Commission, C‑260/05 P, EU:C:2007:700, paragraph 53).

17      Accordingly, where an applicant calls into question the merits of a decision appraising aid taken on the basis of Article 108(3) TFEU or after the formal investigation procedure, the mere fact that it may be regarded as ‘concerned’ within the meaning of Article 108(2) TFEU cannot suffice to render the action admissible. It must then demonstrate that it has a particular status for the purposes of the case-law cited in paragraph 16 above. That applies in particular where the applicant’s position on the market concerned is substantially affected by the aid to which the decision in question relates (see judgment of 15 July 2021, Deutsche Lufthansa v Commission, C‑453/19 P, EU:C:2021:608, paragraph 37 and the case-law cited).

18      In that regard, the Court of Justice has held that the demonstration by the applicant of a substantial effect on its market position does not entail a definitive ruling on the competitive relationship between the applicant and the undertakings in receipt of aid, but requires only that the applicant adduce pertinent reasons to show that the Commission’s decision may harm its legitimate interests by substantially affecting its position on the market in question (see judgment of 15 July 2021, Deutsche Lufthansa v Commission, C‑453/19 P, EU:C:2021:608, paragraph 57 and the case-law cited).

19      It is thus apparent from the case-law of the Court of Justice that the substantial adverse effect on the applicant’s competitive position on the market in question results not from a detailed analysis of the various competitive relationships on that market, allowing the extent of the adverse effect on its competitive position to be established specifically, but, in principle, from a prima facie finding that the grant of the measure covered by the Commission’s decision leads to a substantial adverse effect on that position (see judgment of 15 July 2021, Deutsche Lufthansa v Commission, C‑453/19 P, EU:C:2021:608, paragraph 58 and the case-law cited).

20      It follows that that condition may be satisfied if the applicant adduces evidence to show that the measure concerned is liable to have a substantial adverse effect on its position on the market in question (see judgment of 15 July 2021, Deutsche Lufthansa v Commission, C‑453/19 P, EU:C:2021:608, paragraph 59 and the case-law cited).

21      As regards the factors accepted by the case-law for the purpose of establishing a substantial adverse effect of that kind, the mere fact that an act may exercise an influence on the competitive relationships existing on the relevant market and that the undertaking concerned is in a competitive relationship with the beneficiary of that act cannot suffice for that undertaking to be regarded as being individually concerned by that act. Therefore, an undertaking cannot rely solely on its status as a competitor of the undertaking in receipt of aid (see judgment of 15 July 2021, Deutsche Lufthansa v Commission, C‑453/19 P, EU:C:2021:608, paragraph 60 and the case-law cited).

22      Demonstrating a substantial adverse effect on a competitor’s position on the market cannot simply be a matter of the existence of certain factors indicating a decline in the applicant’s commercial or financial performance, such as a significant decline in turnover, appreciable financial losses or a significant reduction in market share following the grant of the aid in question. The grant of State aid can also have an adverse effect on the competitive situation of an operator in other ways, in particular by causing the loss of an opportunity to make a profit or a less favourable development than would have been the case without such aid (see judgment of 15 July 2021, Deutsche Lufthansa v Commission, C‑453/19 P, EU:C:2021:608, paragraph 61).

23      Moreover, the case-law does not require that the applicant provide information as to the size or geographical scope of the markets at issue, or as to its market shares and those of the recipient of the aid measure at issue or of other competitors on those markets (see, to that effect, judgment of 15 July 2021, Deutsche Lufthansa v Commission, C‑453/19 P, EU:C:2021:608, paragraph 65).

24      It is in the light of those principles that it is necessary to examine whether the applicant has adduced evidence to demonstrate that the measure at issue is liable to have a substantial adverse effect on its position on the market in question.

25      In the present case, the applicant submits, in essence, that it was the first airline on the Romanian market in terms of market share in 2019 and that it was TAROM’s largest, closest and most relevant competitor on that market.

26      In that regard, first, the applicant claims that, in 2019, it had the highest market share on the Romanian passenger air transport services market, namely 29%, whereas, that same year, TAROM, Blue Air and Ryanair DAC held market shares equivalent to 15.3%, 12.8% and 7.4% respectively.

27      Secondly, the applicant claims that it was in direct competition with TAROM on eight and four ‘point of origin/point of destination’ city pair air routes (‘O&D routes’) in 2020 and 2021 respectively. In addition, it argues that the routes on which it was in direct competition with TAROM were more economically important than those shared by TAROM with other airlines.

28      The Commission does not dispute those figures.

29      Thirdly, the applicant submits that, before the outbreak of the COVID-19 pandemic and the grant of the aid, it had undertaken a considerable expansion on the Romanian market, which is not disputed by the Commission. In that regard, the applicant submits that it operated 159 routes to or from Romania in 2019 and now operates 164 routes. Moreover, its growth has been constant over the last 10 years and significantly higher than that of TAROM. Between 2010 and 2019, the applicant added 5.6 million arriving and departing seats on average, that is to say, 1.3 times more than TAROM’s total of 4.5 million additional seats. In addition, the applicant submits that it has a fleet of 140 Airbus aircraft from the A320 family and had expected the delivery of a significant number of aircraft between 1 June 2021 and 31 December 2027 to increase its fleet, which will allow it to open new air routes and bases, particularly in Romania.

30      As a result of the grant of State aid, the applicant is at a disadvantage compared with TAROM, since, unlike that airline, it did not benefit from aid that would have allowed it to mitigate the impact of the COVID-19 pandemic and to resume its activities in Romania. According to the applicant, the measure at issue allows TAROM to remain on the market as a subsidised competitor by avoiding the negative consequences of the COVID-19 pandemic.

31      The factors set out in paragraphs 26 to 30 above, taken together, support the conclusion that the applicant has demonstrated that it was the main competitor of TAROM on a number of O&D routes on the Romanian market, that it was in direct competition with TAROM on a number of O&D routes and that it had undertaken a considerable expansion on the Romanian market. Were it not for the measure at issue, TAROM would have faced a risk of exit from the market, since its financial situation was poor and its position on the market would have deteriorated further. That would have placed the applicant in a position likely to enable it, in the absence of the aid, to gain market share to the detriment of TAROM.

32      Those factors, taken together, demonstrate that the grant of the measure at issue was liable, prima facie, to have a substantial adverse effect on the applicant’s competitive position on the market by causing, inter alia, the loss of an opportunity to make a profit or a less favourable development than would have been the case without such a measure (see the case-law cited in paragraph 22 above).

33      Accordingly, it must be concluded that the applicant has demonstrated to the requisite legal standard that the measure at issue was capable of substantially affecting its competitive position on the market and that, therefore, it is individually concerned by the contested decision.

34      As regards the question whether the applicant is directly concerned by the contested decision, it must be borne in mind that, according to settled case-law, a competitor of a beneficiary of aid is directly concerned by a Commission decision authorising a Member State to pay the aid when there is no doubt as to that State’s intention to do so (see, to that effect, judgments of 5 May 1998, Dreyfus v Commission, C‑386/96 P, EU:C:1998:193, paragraphs 43 and 44, and of 15 September 2016, Ferracci v Commission, T‑219/13, EU:T:2016:485, paragraph 44 and the case-law cited), as is the case here.

35      The applicant is therefore entitled to challenge the contested decision on the merits.

B.      Substance

36      In support of the action, the applicant puts forward four pleas in law, alleging (i) that the Commission misapplied Article 107(2)(b) TFEU and committed a manifest error of assessment in its review of the proportionality of the aid; (ii) breach of the principles of non-discrimination, freedom to provide services and freedom of establishment; (iii) that the Commission should have initiated the formal investigation procedure; and (iv) infringement of the obligation to state reasons.

1.      First plea in law, alleging that the Commission misapplied Article 107(2)(b) TFEU and committed a manifest error of assessment in its review of proportionality

37      The first plea is divided into two parts, the first alleging that the Commission erred in the assessment of the damage, and the second alleging that the Commission disregarded the competitive advantage obtained by TAROM.

(a)    The first part, alleging that the Commission erred in its assessment of the damage

38      In the first part of the first plea, the applicant raises four complaints.

(1)    The first complaint of the first part of the first plea, alleging that the Commission erred in its assessment of the damage, in that it relied on an incorrect counterfactual scenario according to which TAROM would have been able, were it not for the COVID-19 pandemic, to achieve the same financial results as in 2019

39      The first complaint of the first part of the first plea can be divided, in essence, into four subcomplaints, alleging (i) that the two damage assessment methodologies used by the Commission are based on incorrect assumptions; (ii) that those assessment methodologies do not take into consideration four important factors; (iii) that the safeguards aimed at avoiding overcompensation are insufficient; and (iv) that the Commission failed to assess the fixed-cost allocation methodology used by TAROM in a route-by-route analysis.

(i)    The first subcomplaint, alleging that the two damage assessment methodologies are based on incorrect assumptions

40      As a preliminary point, it should be pointed out that, in section 2.6 of the contested decision, the Commission described the two methodologies used by the Romanian authorities to calculate the amount of damage suffered by TAROM during the relevant period, as a result of the travel restrictions and other containment measures aimed at reducing the spread of the COVID-19 pandemic.

41      With regard to the methodology detailed in section 2.6.1 of the contested decision (paragraphs 32 and 33) (‘the first methodology’), it was based on the list of TAROM’s operating revenues and costs registered route by route. More specifically, the Romanian authorities compared, on the one hand, TAROM’s actual results during the relevant period and, on the other hand, TAROM’s results for the period from 16 March to 30 June 2019, that is to say, in a hypothetical counterfactual scenario without travel restrictions linked to the COVID-19 pandemic. The total amount of damage suffered by TAROM was equal to the difference between those two results. Those latter results corresponded, in both scenarios, to the difference between TAROM’s revenues and (fixed and variable) costs. It should also be noted that that methodology excludes avoided operating costs. The table in paragraph 33 of the contested decision illustrates the methodology described above. Under the first methodology, TAROM’s total net losses eligible for compensation were estimated at EUR 19.33 million.

42      So far as concerns the methodology set out in section 2.6.2 of the contested decision (paragraphs 34 to 37) (‘the second methodology’), it was based on a comparison of TAROM’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) during the period from 1 March to 30 June 2020 with those of the same period in 2019. Since the figures resulting from the EBITDA methodology were not available on a daily basis, but only on a monthly basis, the calculation of the amount of damage suffered by TAROM during the relevant period was adjusted. The table in paragraph 37 of the contested decision illustrates the methodology described above. Under the second methodology, TAROM’s total net losses eligible for compensation were estimated at EUR 21.53 million.

43      As is apparent from paragraph 39 of the contested decision, the Romanian authorities considered that the amount of the damage estimated by using the first methodology appeared more conservative than that estimated by using the second methodology. Consequently, they determined the amount of the aid at issue on the basis of the first methodology.

44      In paragraph 69 of the contested decision, the Commission referred to the two methodologies used by the Romanian authorities to calculate the damage and, in paragraph 70 of that decision, found that the amount of the aid at issue did not exceed the amount of the damage calculated using the two methodologies for calculating the said damage.

45      That having been made clear, it is now appropriate to examine the arguments raised by the applicant in the present subcomplaint.

46      The applicant claims, in essence, that the Commission incorrectly assessed the amount of the damage directly caused to TAROM by the COVID-19 pandemic by relying on an incorrect counterfactual scenario.

47      In order to determine that amount, the Commission developed a counterfactual scenario according to which, had there been no restrictions, TAROM would have recorded, during the relevant period, the same results as those recorded during the period from 16 March to 30 June 2019.

48      It should be pointed out that, as the Commission also confirmed at the hearing, the historical data for 2019, which were the most recent data available, reflected a normal business year for TAROM, in so far as there had not been any extraordinary circumstances, such as a pandemic or a change in the airline’s business model. Consequently, those data proved to be more reliable than the use of hypothetical forecasts produced by the undertaking.

49      It follows that the Commission therefore had no reason to base the calculation of the damage assessment on forecasts produced by TAROM rather than on actual historical figures which, a fortiori, were more precise and reliable.

50      Moreover, contrary to what the applicant claims in its reply, the fact that 2019 was a ‘normal’ year does not necessarily imply that TAROM’s financial results had been stable in previous years. The variation in TAROM’s annual financial results since 2001 highlighted by the applicant is short term and non-structural and, in any event, is not sufficient to call into question the Commission’s decision to approve the counterfactual scenario in the light of the 2019 financial figures.

51      In addition, as regards the first methodology, the applicant claims that it is not possible, on the basis of the contested decision, to analyse the routes, expenditure and revenues which the Romanian authorities were able to take into account and which were approved by the Commission.

52      It is apparent from paragraphs 32 and 33 of the contested decision that, for each of the routes served by TAROM, losses in operating income include losses relating to fare revenues from the sale of tickets and losses relating to additional or accessory revenues (seat reservations and upgrades, in particular). Costs include variable costs (fuel costs, fees and charges, maintenance costs, International Air Transport Association (IATA) commissions and catering costs) and fixed costs (in particular, personnel costs and marketing costs).

53      Regarding the second methodology, the applicant claims that it is based on an incorrect assessment of the losses incurred by TAROM during the period from 16 to 31 March 2020. In particular, it criticises the Commission for failing to demonstrate that it had excluded any risk of overestimating the damage in so far as the compensation period begins on 16 March 2020, namely from the second half of March 2020, whereas the period for calculating the EBITDA-based damage begins on 1 March 2020 and the Commission equates the 78% decrease in the number of passengers that occurred from 16 to 31 March 2020 with the 78% EBITDA loss recorded by TAROM during that same period.

54      In that regard, it should be pointed out that the difference in EBITDA between March 2019 and March 2020 reveals the considerable losses suffered by TAROM in March 2020 compared to March 2019. In the absence of daily EBITDA data, which were available in the present case only on a monthly basis, Romania calculated the pro-rata EBITDA loss for the period from 16 to 31 March 2020, and the corresponding total damage estimation for the period between 16 March and 30 June 2020. It concluded from this, as is apparent from paragraph 36 of the contested decision, that 78% of the losses suffered by TAROM in March 2020 could be allocated to the second half of March 2020.

55      It should be noted that that percentage was determined on the basis of the calculation of the relative variation in the number of passengers on the flights operated by TAROM between March 2019 and March 2020, as is set out in Table 6 in paragraph 36 of the contested decision. In calculating the absolute difference in the total number of passengers between March 2019 and March 2020, the Romanian authorities considered that 22% of the total recorded decrease in the number of passengers occurred in the first half of March 2020, with 78% of that decrease occurring in the second half of that month.

56      In so far as Romania imposed very strict containment measures from 16 March 2020, it must be considered, as the Commission rightly did in the contested decision, that the majority of those losses occurred during the second half of March 2020 and result from the fall in revenue from the sale of air tickets to passengers and, therefore, from the reduction in the number of passengers transported. Thus, the losses are the direct consequence of the decrease in the number of passengers. In that regard, it should be pointed out that the applicant has not put forward any evidence to show that the approach based on ticket sales, which is an objective factor, was inadequate.

57      Moreover, the applicant’s argument that the Commission should have crosschecked its results by using other criteria, such as the number of flights, is irrelevant. The revenues of an airline do not derive from the number of flights operated, but from the number of passengers carried on board its aircraft.

58      Furthermore, the applicant complains that the Commission erred in finding that TAROM’s financial results for the relevant period were identical to those achieved by that airline for the period from 16 March to 30 June 2019. In that regard, it argues, in essence, that TAROM was in poor financial health between 2015 and 2019 and that, therefore, were it not for the travel restrictions linked to the COVID-19 pandemic, TAROM’s situation could have deteriorated further in 2020 compared with 2019. Assuming that, had it not been for such restrictions, TAROM’s results over the relevant period would have been the same as those recorded during the period from 16 March to 30 June 2019, the Commission overestimated the damage.

59      However, the figures cited by the applicant, which are taken from Decision C(2020) 1160 final of the Commission of 24 February 2020 concerning State Aid SA.56244 (2020/N) – Romania – Rescue aid to TAROM, and the press articles to which it refers, show that TAROM had incurred losses amounting to EUR 38.8 million in 2018 and EUR 36.5 million in 2019. In reality, therefore, TAROM’s financial situation improved slightly in 2019 compared with its financial situation in 2018. Consequently, those figures do not support the applicant’s argument that the company’s financial results would have been even worse in 2020 (in the absence of travel restrictions) than in 2019.

60      Furthermore, as regards the question whether, as the applicant maintains, the Commission should have carried out a robust analysis of TAROM’s historical financial data over the previous three to five years, as well as ‘sensitivity checks’, to determine its financial results in 2020 in the absence of restrictions, it should be noted that the applicant does not provide any evidence to explain why such a methodology would have been more appropriate than the one used by the Commission.

61      Finally, it is necessary to reject the applicant’s argument that, instead of relying on TAROM’s actual results during the period from 16 March to 30 June 2019, the Commission should have taken into consideration the liquidity or restructuring plans that TAROM had prepared prior to the COVID-19 pandemic for the relevant period. Without evidence showing that the use of the most recent historical data relating to the period from 16 March to 30 June 2019 was unreliable, it must be held, as the Commission moreover pointed out at the hearing, that those data were a more appropriate reference point for examining the counterfactual scenario than a counterfactual scenario based on provisional estimates of TAROM’s future results on those routes.

62      It follows from the foregoing that the first subcomplaint of the first complaint in the first part of the first plea must be rejected as unfounded.

(ii) The second subcomplaint, alleging that the two assessment methodologies do not take into account four important factors

63      The applicant claims that, in its examination of the counterfactual scenario, the Commission failed to take into account four important factors during the relevant period, namely (i) TAROM’s fleet maintenance costs; (ii) the variation in kerosene prices; (iii) the increased competition with other airlines; and (iv) the distinction between the damage caused by the travel restrictions linked to the COVID-19 pandemic and the losses caused by TAROM’s pre-existing difficulties. The failure to take those four factors into account prevented TAROM from achieving the same financial results during the relevant period as it did during the period from 16 March to 30 June 2019, resulting in the damage being overestimated.

64      The Commission disputes the applicant’s arguments.

65      As a preliminary point, as regards the first two factors, it should be pointed out that the applicant has submitted certain evidence to show that, were it not for the travel restrictions linked to the COVID-19 pandemic, TAROM’s fleet maintenance costs and fuel costs would have been higher during the relevant period than during the period from 16 March to 30 June 2019 and that, therefore, in its examination of the counterfactual scenario, the Commission should have anticipated an increase in those costs during the relevant period.

66      First, the applicant claims that the costs of maintaining TAROM’s ageing and non-homogenous fleet were higher in 2020 than in 2019, in view of the fact that, according to a study by the RAND Corporation entitled ‘The Maintenance Costs of Aging Aircraft’ (‘the RAND Corporation study’), the maintenance costs of commercial aircraft increase by 3.5% to 17.6% for each year of an aircraft’s useful life.

67      In that regard, it should be pointed out, as the Commission does, that the RAND Corporation study dates from 2006 and is based on a limited number of airlines active on the North American market. Therefore, given the age and geographical scope of the study, its probative value for the purposes of determining whether TAROM’s fleet maintenance costs would have increased between 2019 and 2020 in the absence of travel restrictions can only be limited.

68      Moreover, according to that study, in the case of aircraft more than 12 years old, maintenance costs increase only slightly, namely by 0.7%, during each additional year of their useful life. Consequently, in view of the fact that, according to the information provided by the applicant, the average age of TAROM’s fleet was 15 years, it cannot be concluded, on the basis of that study, that TAROM’s fleet maintenance costs changed significantly between 2019 and 2020.

69      In its reply, the applicant adds that, according to IATA data from December 2019, aircraft operating expenses increased by 3.8% in 2019 and were supposed to increase by 3.5% in 2020. However, it should be noted that the concept of aircraft ‘operating costs’ is broader than that of ‘maintenance costs’ and that the applicant has failed to specify the correlation between those data and its argument relating to maintenance costs.

70      Furthermore, the fact, raised by the applicant in the reply, that, in Commission Decision C(2020) 5830 final of 20 August 2020 on State Aid SA.57026 (2020/N) – Romania – COVID-19: Aid to Blue Air, the Commission took into account, in the calculation of the damage suffered by the airline Blue Air, the circumstance that the reorganisation of Blue Air’s fleet resulted, inter alia, in a significant increase in maintenance costs in 2020 compared to 2019 is irrelevant in this case. As the Commission rightly argues, TAROM did not carry out a fleet reorganisation in 2019 similar to the one carried out by Blue Air in the same year.

71      Secondly, according to the applicant, fuel costs vary significantly from year to year and, therefore, the Commission could not assume that they would remain stable between 2019 and 2020.

72      In that regard, the applicant refers to data showing changes in the prices of jet fuel and crude oil during the period from June 2014 to June 2021, from which it is apparent that the price of fuel fluctuated very significantly during that period, with sharp falls and rises at short intervals. In addition, those data show that that price was significantly higher in 2019 than in 2020.

73      The applicant also relies on the forecasts of the Energy Information Administration (United States) of January 2020, according to which fuel prices were to increase by 4.2% in 2020 compared with 2019.

74      In its defence, the Commission, for its part, cites an extract from an IATA press release of December 2019 according to which, on that date, IATA had predicted a decrease in jet fuel prices in 2020 as compared with 2019.

75      It is apparent from the evidence referred to in paragraphs 72 to 74 above that the forecasts made before the outbreak of the COVID-19 pandemic concerning changes in jet fuel prices in 2020 were not all consistent, with certain forecasts expecting an increase in those prices, whereas others forecast a decrease. In reality, those differences rather tend to demonstrate that there was no certainty as to how the price of jet fuel would change during the relevant period. Furthermore, in view of the highly volatile nature of those prices, as shown by the data submitted by the applicant itself, the Commission cannot be criticised for having failed to anticipate how they would change.

76      Accordingly, the applicant has not submitted consistent and coherent evidence capable of demonstrating that, had it not been for travel restrictions linked to the COVID-19 pandemic, TAROM’s fleet maintenance costs and fuel costs would have been higher during the relevant period than during the period from 16 March to 30 June 2019.

77      Thirdly, as regards the applicant’s argument that the Commission should have taken into account, in its examination of the counterfactual scenario, the intensification of competition between low-cost airlines, it should be pointed out, as the Commission does, that the applicant has not quantified the losses caused to TAROM by that alleged increase in competition between low-cost airlines.

78      It must therefore be stated that applicant’s line of argument on that point is unsubstantiated and remains entirely hypothetical.

79      Fourthly, the applicant argues, in essence, that the Commission breached its obligation to state reasons and committed a manifest error of assessment since, in its assessment of the damage, it did not make a distinction between the damage caused to TAROM by the travel restrictions linked to the COVID-19 pandemic and the losses due to TAROM’s pre-existing difficulties.

80      In that regard, it should be recalled that, since this is an exception to the general principle set out in Article 107(1) TFEU that State aid is incompatible with the internal market, Article 107(2)(b) TFEU must be interpreted narrowly. Therefore, only economic damage caused directly by natural disasters or exceptional occurrences may be compensated for under that provision (judgment of 23 February 2006, Atzeni and Others, C‑346/03 and C‑529/03, EU:C:2006:130, paragraph 79). It follows that aid likely to exceed the losses incurred by its beneficiaries does not fall within the scope of Article 107(2)(b) TFEU (see, to that effect, judgment of 11 November 2004, Spain v Commission, C‑73/03, not published, EU:C:2004:711, paragraphs 40 and 41).

81      In particular, according to the case-law, the occurrence giving rise to the damage, as defined in the contested decision, must be the determining cause of the damage which the aid at issue is intended to remedy and must be directly responsible for causing it. A direct link will only exist where the damage is the direct consequence of the occurrence in question without being dependent on the interposition of other causes. Accordingly, it is incumbent on the Commission to examine with particular care whether the occurrence is really the decisive cause of the damage suffered by the beneficiary of the aid concerned or, on the contrary, some of the damage suffered is due to the beneficiary’s pre-existing difficulties (see, to that effect, judgment of 9 June 2021, Ryanair v Commission (Condor; Covid-19), T‑665/20, EU:T:2021:344, paragraphs 45 and 58).

82      That being so, the fact that a beneficiary of aid is an undertaking in difficulty does not prevent it from being granted State aid under Article 107(2)(b) TFEU.

83      In this case, it should be pointed out, first, that TAROM was an undertaking in difficulty when the measure at issue was granted and had previously received rescue aid and, secondly, that, in the contested decision, the Commission did not make explicit reference to the distinction between the damage caused by the travel restrictions linked to the COVID-19 pandemic and the losses caused by TAROM’s pre-existing difficulties.

84      However, it is apparent from the contested decision that the methodology used by the Romanian authorities to calculate the damage suffered by TAROM, described in paragraph 41 above, takes into consideration only the revenues and costs generated by TAROM that were directly linked to its passenger air transport activities on all the routes it operated. That revenue and those costs were thus directly affected by the travel restrictions linked to the COVID-19 pandemic. Any pre-existing difficulties suffered by TAROM are neutral in relation to the damage caused by the restrictions linked to the COVID-19 pandemic.

85      It is also apparent from the contested decision that the applicant has not identified any specific cost item that, in its view, should have been excluded from the Commission’s calculation of the damage or treated differently by that institution on the ground that those costs were caused by TAROM’s pre-existing difficulties.

86      Accordingly, the applicant has not provided any information or evidence to suggest – let alone prove – that, in this case, the measure at issue compensated, even partially, for the losses of TAROM caused by its pre-existing difficulties.

87      It follows from the foregoing that the second subcomplaint of the first part of the first plea must be rejected as unfounded.

(iii) The third subcomplaint, alleging that the safeguards aimed at avoiding overcompensation are insufficient

88      The applicant argues, in essence, that the safeguards aimed at avoiding overcompensation are insufficient. The ex post assessment of damage that was implemented to prevent overcompensation is of limited use.

89      In that regard, it must first of all be pointed out, as is apparent from paragraphs 31 and 71 of the contested decision, that the damage quantification had to be audited and certified by an independent expert at the end of the accounting year based on TAROM’s financial accounts. TAROM had undertaken to provide the Romanian authorities, by 30 April 2021 at the latest, with a full report of all the revenues and costs relating to its passenger transport activities operated during the compensation period. In addition, the Romanian authorities had to submit to the Commission, before 30 June 2021, the results of the ex post assessment of the damage suffered by TAROM during the compensation period, based on TAROM’s audited accounts, and, if that assessment showed that TAROM had been overcompensated, they had to ensure that the airline repaid that overcompensation, including interest.

90      Furthermore, it should be noted that, as is apparent from paragraph 40 of the contested decision, the Romanian authorities had undertaken, as an additional safeguard, to exclude the benefit of the measure at issue to the extent that TAROM was responsible for the damage suffered or did not conduct its activities with due diligence or in compliance with applicable legislation. However, it is apparent from paragraph 72 of that decision that TAROM was not in such a situation and that it had taken various measures to minimise the damage it suffered as a result of the COVID-19 pandemic. Other safeguards are also set out in paragraphs 40 and 73 of the contested decision, such as the prohibition on combining the measure at issue with other aid for the same eligible costs.

91      Moreover, it should be recalled that the result of the estimate of the amount of the damage obtained by using the first methodology appeared more conservative than that obtained by using the second methodology, as is apparent from paragraphs 39 and 70 of the contested decision. In that regard, it should be noted that, in addition to the methodology used, another methodology was applied by the Romanian authorities to verify the plausibility of the calculation obtained. In this case, that verification uses the EBITDA methodology and seeks to reduce the risk of overcompensation.

92      Therefore, the Commission ensured that necessary safeguards aimed at avoiding overcompensation of the damage suffered by TAROM were put in place.

93      Next, as regards the applicant’s criticism that the contested decision does not mention that any ex post assessment will be undertaken of the appropriateness of the choice of the counterfactual scenario, it is sufficient to state that it was not necessary for the Commission to carry out such an assessment, the objective of the ex post assessment referred to in paragraph 71 of the contested decision being to verify the amount of damage suffered by TAROM during the relevant period based on its audited accounts, and not to call into question the appropriateness of the choice of the counterfactual scenario. Accordingly, the third subcomplaint of the first complaint of the first part of the first plea must be rejected as unfounded.

(iv) The fourth subcomplaint, alleging that the Commission failed to assess the fixed-cost allocation methodology used by TAROM in a route-by-route analysis

94      The applicant complains, in essence, that the Commission failed to examine the potential significant impact of the choice of the fixed-cost allocation methodology on the assessment of damage to the extent that TAROM operated certain routes during the relevant period. In that regard, it argues that a route-by-route analysis should exclude the fixed costs relating to the operation of those routes.

95      The applicant notes that, in so far as a rational economic operator would not operate loss-making routes, TAROM decided to operate those routes during the COVID-19 pandemic because it expected to generate a profit on them and that, consequently, it could not seek payment of compensation for those routes by including them in the route-by-route analysis. Thus, it submits that the Commission should have excluded the fixed costs incurred by TAROM to operate those routes during the relevant period. First of all, it should be recalled, as is apparent from paragraph 12 of the contested decision, that TAROM had to cancel almost all of its scheduled flights between 26 March and 17 May 2020. As a result, during the state of emergency (from 16 March to 14 May 2020), it performed only exceptional cargo flights for medical equipment and supplies and charter flights for the repatriation of Romanian citizens working abroad, at the request of the Romanian authorities and under conditions different from normal commercial conditions.

96      Next, paragraph 13 of the contested decision states that, following the state of emergency, during the state of alert (from 14 May to 16 July 2020), TAROM resumed its activities at a very reduced level with only a few flights to and from certain destinations and that specific flight restrictions continued to apply on routes to and from foreign countries, including several Member States, until at least 16 July 2020.

97      It should moreover be emphasised that every route, irrespective of whether it was operated by TAROM during the relevant period and whether it is profitable or loss making, incurs fixed costs, such as aircraft maintenance costs and payroll, which an airline must necessarily bear.

98      Accordingly, in view of the fact that the routes taken into account for the calculation of the damage were affected by travel restrictions linked to the COVID-19 pandemic and generated fixed costs irrespective of whether they were operated by TAROM during the relevant period, the Commission was right to approve the inclusion of those fixed costs in the calculation of the damage, the applicant having failed to show that, in so doing, there was overcompensation.

99      Consequently, the applicant’s argument must be rejected.

100    It follows from the foregoing that the fourth subcomplaint of the first complaint of the first part of the first plea must be rejected and, consequently, the first complaint of the first part of the first plea must be rejected as unfounded.

(2)    The second complaint of the first part of the first plea, alleging that the Commission overestimated the damage directly caused by the travel restrictions imposed by Romania

101    The applicant submits, in essence, that the Commission included in the calculation of the damage during the relevant period loss of income which did not directly concern the travel restrictions imposed by Romania and other Member States and that it therefore overestimated the amount of damage suffered by TAROM. In that regard, it notes that, during the period from 11 to 30 June 2020, TAROM’s operations were only partially affected by travel restrictions and thus argues that, for that period, the damage should have been limited to routes that were still subject to those travel restrictions. Accordingly, the Commission was wrong to assume that all the damage during the relevant period was attributable to the travel restrictions.

102    The Commission disputes the applicant’s arguments.

103    In the first place, it should be noted that, in the present case, as is apparent from paragraphs 3 and 62 of the contested decision, the objective of the measure at issue is to make good the damage suffered by TAROM due to the imposition of travel restrictions and other containment measures aimed at reducing the spread of the COVID-19 pandemic during the period from 16 March to 30 June 2020.

104    The Commission described, in sections 2.1.1 and 2.1.2 of the contested decision, the travel restrictions imposed by the Member States and Romania in particular. As regards, specifically, the restrictions imposed by Romania, it is stated, in paragraphs 9 and 10 of the contested decision, that the Romanian authorities adopted various measures between 11 March and 16 July 2020 aimed at reducing the spread of the COVID-19 pandemic, which included the gradual suspension of most commercial flights within, to and from Romania during the lockdown period in the strict sense, namely from 24 March to 14 May 2020, but also beyond. It is also stated, in paragraph 8 of the contested decision, that Romania declared a state of emergency on 16 March 2020, which, after being extended, ended on 14 May 2020 and was replaced, from that date, by a state of alert, which, after being extended, was eventually lifted on 16 July 2020.

105    During the state of alert, all commercial flights were banned to and from Austria, Belgium, Switzerland, France, Germany, Iran, Italy, the United Kingdom, the Netherlands, Spain, the United States and Türkiye. However, on 11 June 2020, the Romanian authorities allowed the resumption of flights to Austria and Germany only, restrictions continuing to apply to the rest of the routes until at least 16 July 2020.

106    Those restrictions had a very significant impact on TAROM’s activities during the relevant period, including during the period from 11 to 30 June 2020. When questioned on that point at the hearing, the Commission stated, first, that TAROM had operated only eight isolated flights between 11 and 30 June 2020, from or to Austria and Germany and, secondly, that it had taken into account the income from those flights in its calculation methodology, recording it as income from passenger flights among other income such as that from cargo, freight or repatriation flights.

107    In the second place, it should be highlighted that the adverse effects of the travel restrictions linked to the COVID-19 pandemic continued for some time after they had been formally lifted due to the need for a ‘ramp-up’ period immediately following their lifting. Thus, the formal lifting of a restriction on a given route does not result in an immediate resumption of flights. As the Commission rightly points out, airlines must, after the partial lifting of restrictions, readjust their schedules and staff and reposition their flights on reopened routes. Moreover, as it also argues, travellers themselves must also have sufficient notice to plan their trips.

108    Accordingly, it should be noted that, during the period from 11 to 30 June 2020, the vast majority of air routes to or from Romania continued to be subject to travel restrictions imposed on account of the COVID-19 pandemic. In that context, although TAROM did indeed operate a very limited number of flights during that period to or from Austria and Germany, the fact remains that those travel restrictions were lifted gradually and that a ‘ramp-up’ period was necessary after those restrictions had been formally lifted, as has been noted in paragraph 107 above. It follows that the applicant has not demonstrated that the Commission overestimated the damage directly caused by the travel restrictions.

109    That conclusion is not called into question by the applicant’s arguments.

110    First, as regards the applicant’s argument that the lifting of restrictions was announced several weeks in advance, it is impossible to disregard the fact that certain restrictions the lifting of which had been announced well in advance ultimately had to be extended due to a sudden and unexpected resurgence of the COVID-19 pandemic. Consequently, the travel restrictions to and from the countries referred to in paragraph 105 above, with the exception of flights to Austria and Germany, continued to apply until at least 16 July 2020, despite TAROM’s initial plan to resume flights by 16 June 2020.

111    Secondly, so far as concerns the applicant’s criticism that the Commission assumed, without however proving, that the ‘ramp-up’ period would take the entire second half of June 2020, it must be observed, as the Commission has done, that it is apparent from Tables 3 and 4 of the contested decision that TAROM’s passenger numbers and revenues decreased by 93% and 85.3% respectively in June 2020 as compared with June 2019. Those figures alone are sufficient to demonstrate that, in this case, despite the lifting of certain travel restrictions in June 2020, TAROM did not resume its activities in a significant manner during that month and therefore continued to suffer losses directly caused by the travel restrictions and other containment measures aimed at reducing the spread of the COVID-19 pandemic.

112    Thirdly, while the applicant does not deny that some damage may arise shortly after the end of an exceptional occurrence, it argues that the existence of a direct causal link between that damage and that occurrence has to be proved, which the Commission failed to do. In the present case, it must be held that, as is apparent from paragraph 61 of the contested decision, the damage suffered by TAROM during the relevant period, including the period from 11 to 30 June 2020, is directly linked to the COVID-19 pandemic as a result of the travel restrictions and other containment measures aimed at reducing the spread of that pandemic. The causal link between the exceptional occurrence and the damage suffered by TAROM was thus not interrupted during the entire relevant period. In any event, it must be held, as the Commission has contended, that the contested decision clearly states that the measure at issue seeks to ensure that TAROM is compensated only for the losses suffered which are directly attributable to that pandemic.

113    Fourthly, it must be stated that the applicant’s claim that the losses recorded by TAROM on its domestic routes are not the consequence of the restrictions linked to the COVID-19 pandemic is not supported by any item of evidence. Moreover, it is apparent from paragraph 10 of the contested decision (see paragraph 104 above) that commercial flights within Romania were also gradually suspended during the lockdown period and beyond.

114    Fifthly, as regards the applicant’s line of argument based on two Commission decisions, namely the decision of 29 December 2020, State aid SA.59188 (2020/NN) – Italy – COVID-19 aid to Alitalia, and the decision of 26 March 2021, State Aid SA.61676 (2021/NN) – Italy – COVID-19 aid to Alitalia, by which the Commission approved two aid measures granted by the Italian Republic to the airline Alitalia in the context of the COVID-19 pandemic, it must be held that the reference to those two decisions is irrelevant in so far as, first, the periods concerned by those decisions are different from the one concerned by the contested decision and, secondly, the methodology used by the Commission to estimate the amount of damage suffered by Alitalia is based on an assessment pertaining to certain specific routes operated by the latter airline and not, as in the present case, on a comprehensive approach covering all the routes operated by TAROM.

115    Sixthly, as regards the applicant’s references to points 15a and 15b of the Commission communication of 19 March 2020 entitled ‘Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak’ (OJ 2020 C 91I, p. 1), as amended on 1 February 2021 (OJ 2021 C 34, p. 6), it is sufficient to note that those provisions were not applicable ratione temporis at the time of the adoption of the contested decision.

116    It follows from the foregoing that the second part of the first plea must be rejected as unfounded.

(3)    The third complaint of the first part of the first plea, alleging that the Commission erred in its assessment of avoided costs

117    The applicant submits that the assessment of avoided costs carried out in the contested decision is ‘opaque’. In essence, the Commission failed to verify whether, in addition to the elimination of catering for passengers, the introduction of cargo flights and the suspension of flights with high no-show rates, TAROM had taken other measures during the relevant period to eliminate all of its avoidable costs and thereby minimise its damage or whether, on the contrary, it had incurred costs that it could have avoided, leading to an overestimation of that damage. In the latter case, the part of the damage that was overestimated, resulting from the inclusion of costs which could have been avoided but were not, would not have been caused directly by the travel restrictions, but by TAROM’s negligence. The applicant relies in that regard on the judgment of 19 May 1992, Mulder and Others v Council and Commission (C‑104/89 and C‑37/90, EU:C:1992:217, paragraph 33).

118    The Commission disputes the applicant’s arguments.

119    First, it should be noted that, as is apparent from paragraph 32(b) of the contested decision, the damage assessment conducted on the basis of the first methodology took into account ‘avoided’ operating costs. That concept was explained in the abovementioned paragraph.

120    The Commission moreover also stated, in paragraph 68 of the contested decision, that ‘avoided’ costs corresponded to the costs that TAROM would have incurred during the relevant period had its operations not been affected by the restrictions linked to the COVID-19 pandemic, but that it did not have to bear as a result of the cancelled operations. Avoided costs such as fuel costs, staff costs, taxes and charges were quantified by comparing the costs recorded during the corresponding period in 2019 with the actual costs incurred by TAROM during the compensation period.

121    In those circumstances, and contrary to what the applicant argues, the assessment of avoided costs, as is set out in the contested decision, cannot be considered ‘opaque’.

122    Secondly, as regards the applicant’s argument that the Commission should have ensured that the measure at issue did not compensate costs incurred by TAROM that were ‘avoidable’ but that it had not avoided, it is sufficient to state that that argument is too general and is not substantiated.

123    The applicant fails to specify the specific cost items incurred by TAROM on the routes concerned that it could have avoided and that therefore should have been excluded from the calculation of the damage it suffered.

124    Accordingly, the third complaint of the first part of the first plea must be rejected as unfounded.

(4)    The fourth complaint of the first part of the first plea, alleging that the Commission did not assess the damage caused by the restrictions linked to the COVID-19 pandemic to airlines other than TAROM

125    The applicant submits that, in the contested decision, the Commission committed a manifest error of assessment because it should have examined not only the damage suffered by TAROM due to the COVID-19 pandemic, but also that suffered by its competitors. According to the applicant, an ‘exceptional occurrence’ within the meaning of Article 107(2)(b) TFEU by definition affects many or all the players in a sector or an economy. Thus, many other airlines have suffered damage in Romania as a result of the travel restrictions imposed amid the COVID-19 pandemic. That provision is therefore intended to make good the damage borne also by TAROM’s competitors and not only by TAROM.

126    The Commission disputes the applicant’s arguments.

127    Under Article 107(2)(b) TFEU, aid to make good the damage caused by natural disasters or exceptional occurrences must be compatible with the internal market.

128    In the present case, the applicant does not dispute the Commission’s assessment in the contested decision that the COVID-19 pandemic had to be regarded as an ‘exceptional occurrence’ within the meaning of Article 107(2)(b) TFEU. Furthermore, it follows inter alia from paragraphs 4 to 10 of the contested decision that the COVID-19 pandemic led to the suspension of most air transport passenger services, having regard, in particular, to the travel restrictions and other containment measures aimed at reducing the spread of the COVID-19 pandemic and to the closure of the borders of several EU Member States, Romania included.

129    Accordingly, the applicant is correct in observing that TAROM is not the only company or the only airline to be affected by the exceptional occurrence at issue.

130    However, the fact remains, as the Commission contends in its defence, that there is no obligation for Member States to grant aid to make good the damage caused by an ‘exceptional occurrence’ within the meaning of Article 107(2)(b) TFEU.

131    Specifically, first, while Article 108(3) TFEU requires Member States to notify their plans as regards State aid to the Commission before they are put into effect, it does not, however, require them to grant any aid (order of 30 May 2018, Yanchev, C‑481/17, not published, EU:C:2018:352, paragraph 22).

132    Secondly, an aid measure may be directed at making good the damage caused by an exceptional occurrence, in accordance with Article 107(2)(b) TFEU, irrespective of the fact that it does not make good the entirety of that damage (judgment of 14 July 2021, Ryanair and Laudamotion v Commission (Austrian Airlines; Covid-19), T‑677/20, under appeal, EU:T:2021:465, paragraph 56).

133    Consequently, it does not follow from either Article 108(3) TFEU or from Article 107(2)(b) TFEU that Member States are obliged to make good the entirety of the damage caused by an exceptional occurrence, such that they similarly cannot be required to grant aid to all of the victims of that damage (judgment of 14 July 2021, Ryanair and Laudamotion v Commission (Austrian Airlines; Covid-19), T‑677/20, under appeal, EU:T:2021:465, paragraph 57).

134    It follows that, contrary to what the applicant claims, the Commission was not required to assess, in the contested decision, the damage caused to airlines other than TAROM (see, to that effect, judgment of 14 July 2021, Ryanair and Laudamotion v Commission (Austrian Airlines; Covid-19), T‑677/20, under appeal, EU:T:2021:465, paragraph 95).

135    It follows from the foregoing that the fourth complaint of the first part of the first plea must be rejected as unfounded as must, consequently, the first part in its entirety.

(b)    The second part of the first plea, alleging that the Commission disregarded the competitive advantage obtained by TAROM

136    The applicant claims, in essence, that the Commission committed a manifest error of assessment and an error of law since, in its assessment of the proportionality of the measure at issue, it underestimated the value of the advantage granted to TAROM, by taking into account only the nominal amount of the cash flow granted to TAROM through the measure at issue, but not the competitive advantage obtained by the applicant as a result of that measure, which strengthened TAROM’s position on the market.

137    The Commission disputes the applicant’s line of argument.

138    In that regard, it should be noted that, for the purposes of assessing the compatibility of aid with the internal market, the advantage procured by that aid for the recipient does not include any economic benefit the recipient may have enjoyed as a result of exploiting the advantage. That benefit need not be the same as the advantage constituting the aid, and there may indeed be no such benefit, but that cannot justify a different assessment of the compatibility of the aid with the internal market (see, to that effect and by analogy, judgment of 21 December 2016, Commission v Aer Lingus and Ryanair Designated Activity, C‑164/15 P and C‑165/15 P, EU:C:2016:990, paragraph 92).

139    By analogy, it follows that only the advantage constituting the aid must be taken into consideration for the purposes of assessing the compatibility of that aid with the internal market. However, the Commission cannot be criticised for not having determined the existence of any possible economic benefit resulting from that advantage (see, to that effect, judgment of 14 July 2021, Ryanair and Laudamotion v Commission (Austrian Airlines; Covid-19), T‑677/20, under appeal, EU:T:2021:465, paragraph 120).

140    In those circumstances, the applicant is not justified in criticising the Commission for failing to take account of a possible competitive advantage resulting from the allegedly discriminatory nature of the measure at issue (see, to that effect, judgment of 14 July 2021, Ryanair and Laudamotion v Commission (Austrian Airlines; Covid-19), T‑677/20, under appeal, EU:T:2021:465, paragraph 121).

141    It follows from the foregoing that the second part of the first plea and, therefore, the first plea in its entirety must be rejected as unfounded.

2.      Second plea in law, alleging breach of the principles of non-discrimination, freedom to provide services and freedom of establishment

142    The applicant submits, in essence, that the Commission has infringed the principles of non-discrimination, freedom to provide services and freedom of establishment, on the ground that the measure at issue benefits only TAROM.

143    The Commission disputes the applicant’s arguments.

144    It should be recalled that State aid which contravenes the provisions of the FEU Treaty or the general principles of EU law cannot be declared compatible with the internal market (judgment of 22 September 2020, Austria v Commission, C‑594/18 P, EU:C:2020:742, paragraph 44; see also, to that effect, judgment of 15 April 2008, Nuova Agricast, C‑390/06, EU:C:2008:224, paragraphs 50 and 51).

(a)    Breach of the principle of non-discrimination

145    As a preliminary point, it should be recalled that the principle of non-discrimination requires that comparable situations must not be treated differently and that different situations must not be treated in the same way unless such treatment is objectively justified (judgment of 15 April 2008, Nuova Agricast, C‑390/06, EU:C:2008:224, paragraph 66; see also, to that effect, judgment of 5 June 2018, Montero Mateos, C‑677/16, EU:C:2018:393, paragraph 49).

146    The elements which characterise different situations, and hence their comparability, must in particular be determined and assessed in the light of the subject matter and purpose of the EU act which makes the distinction in question. The principles and objectives of the field to which the act relates must also be taken into account (judgment of 16 December 2008, Arcelor Atlantique et Lorraine and Others, C‑127/07, EU:C:2008:728, paragraph 26).

147    Moreover, it should be recalled that the principle of proportionality, which is one of the general principles of EU law, requires that acts adopted by EU institutions do not exceed the limits of what is appropriate and necessary in order to attain the legitimate objectives pursued by the legislation in question (judgment of 17 May 1984, Denkavit Nederland, 15/83, EU:C:1984:183, paragraph 25); where there is a choice between several appropriate measures, recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued (judgment of 30 April 2019, Italy v Council (Fishing quota for Mediterranean swordfish), C‑611/17, EU:C:2019:332, paragraph 55).

148    The applicant argues, in essence, that the contested decision allows discriminatory treatment which is neither appropriate nor necessary for achieving the objective of the measure at issue, namely to make good the damage caused by the travel restrictions linked to the COVID-19 pandemic. The applicant states that TAROM holds 15.3% of the Romanian market and therefore suffered 15.3% of the damage caused by the COVID-19 pandemic. Had the measure at issue been granted to all of the airlines operating in Romania, the aim of that measure would be achieved without discrimination. In that regard, the contested decision does not explain why the measure at issue was granted only to TAROM, when the other airlines operating in Romania also suffered damage as a result of the travel restrictions and containment measures imposed during the COVID-19 pandemic. According to the applicant, the measure at issue is a measure of ‘naked economic nationalism’.

149    In that regard, in the first place, it should be recalled that the measure at issue is intended solely to compensate TAROM for the damage directly caused following the introduction of travel restrictions and other containment measures aimed at reducing the spread of the COVID-19 pandemic (paragraphs 3 and 62 of the contested decision).

150    While it is indeed true that all the airlines which operate in Romania were affected by the abovementioned restrictions and, consequently, all suffered, like TAROM, damage as a result of the cancellation or rescheduling of their flights following the introduction of those restrictions, the fact remains that, as has been noted in paragraphs 130 to 133 above, it does not follow either from Article 108(3) TFEU or from Article 107(2)(b) TFEU that Member States are obliged to make good the entirety of the damage caused by an exceptional occurrence, such that they similarly cannot be required to grant aid to all of the victims of that damage.

151    In the second place, it should be recalled that individual aid such as that at issue, by definition, benefits only one undertaking, to the exclusion of all other undertakings, including those in a situation comparable to that of the recipient of that aid. Thus, by its nature, such individual aid introduces a difference in treatment, or even discrimination, which is nevertheless inherent in the individual character of that measure (judgment of 14 April 2021, Ryanair v Commission (Finnair I; Covid-19), T‑388/20, under appeal, EU:T:2021:196, paragraph 81).

152    Yet to argue, as the applicant does, that the individual aid at issue is contrary to the principle of non-discrimination amounts, in essence, to calling into question systematically the compatibility with the internal market of any individual aid solely on account of its inherently exclusive and thus discriminatory nature, even though EU law allows Member States to grant individual aid, provided that all the conditions laid down in Article 107 TFEU are met.

153    In the third place and in any event, even if, as the applicant asserts, the difference in treatment instituted by the measure at issue, in so far as it benefits only TAROM, can be equated to discrimination, it should be ascertained whether it is justified by a legitimate objective and whether it is necessary, appropriate and proportionate in order to attain that objective.

154    Therefore, it is important to ascertain whether that difference in treatment is permitted under Article 107(2)(b) TFEU, which is the legal basis for the contested decision. That examination requires, first, that the objective of the measure at issue meet the requirements provided for in that provision and, secondly, that the conditions for granting that measure, namely, in this case, the fact that it benefits only TAROM, be such as to enable that objective to be achieved and not go beyond what is necessary to achieve it.

155    In the case at hand, as regards the objective of the measure at issue, the applicant does not dispute the fact that compensation for damage resulting from the cancellation or rescheduling of an airline’s flights following the introduction of travel restrictions and other containment measures aimed at reducing the spread of the COVID-19 pandemic makes it possible to make good the damage caused by that pandemic. Nor does the applicant dispute that the COVID-19 pandemic constitutes an exceptional occurrence within the meaning of Article 107(2)(b) TFEU.

156    As regards the conditions for granting the measure at issue, it is apparent in particular from paragraphs 49, 53, 59, 68 and 73 of the judgment of 4 May 2022, Wizz Air Hungary v Commission (TAROM; Rescue aid) (T‑718/20, under appeal, EU:T:2022:276), that TAROM played a decisive role in ensuring regional connectivity within Romania, but also the country’s international connectivity given that it operated a large number of domestic and international air routes, certain of them exclusively. Moreover, that airline had a hub-and-spoke network that allowed it to offer a connection with Bucharest airport (Romania) to passengers coming from regional airports, whereas its competitors on domestic routes other than those operated by TAROM on its own had networks with point-to-point flights. The connection to national or international destinations from Bucharest airport is such as to ensure regional connectivity. Furthermore, as has been stated in paragraph 95 above, TAROM operated, during the COVID-19 pandemic, exceptional cargo flights in order to transport medical equipment and supplies and charter flights for the repatriation of Romanian citizens working abroad.

157    Moreover, according to the information produced by the applicant in the annex to the application, TAROM was the second airline in Romania, since it had a 15.3% market share in 2019 and the applicant, for its part, was the country’s leading airline with a market share of 40.8% in the same year.

158    The applicant nevertheless argues that those factors do not justify the difference in treatment resulting from the measure at issue. It submits that that difference in treatment is not proportionate, since the measure grants TAROM all the aid intended to remedy the damage at issue, whereas TAROM bore only 15.3% of that damage.

159    In that regard, it follows from the evidence referred to in paragraph 156 above that that low market share is not such as to influence the finding that TAROM played a decisive role for Romania’s connectivity as a whole and above all for the connectivity of certain Romanian regions.

160    In addition, as regards the applicant’s reference to the judgment of 14 April 2021, Ryanair v Commission (SAS, Denmark; COVID-19) (T‑378/20, EU:T:2021:194), it should be pointed out, as the Commission has done, that, in that case, the market share of the airline was only one factor taken into consideration among others in order to conclude that the beneficiary of the aid at issue had been more affected than its competitors by the restrictions due to its business model and its role in Denmark’s connectivity. The same conclusion must be drawn in the present case.

161    What is more, as regards the applicant’s argument that the Commission took into consideration the travel restrictions imposed by Member States other than Romania as a source of travel restrictions, it must be observed that those restrictions were put in place in order to deal with the COVID-19 pandemic and that, as the Commission rightly observes, they guarantee the existence of a direct causal link between the damage suffered by TAROM and that pandemic.

162    Furthermore, as regards the question whether the measure at issue goes beyond what is necessary to achieve the objective pursued, it should be pointed out that, as is indicated in paragraphs 39 and 70 of the contested decision, the estimation of the amount of damage was carried out with two methodologies proposed by the Romanian authorities and the amount estimated with the first methodology was used in so far as it was lower than that obtained by the second methodology (see paragraph 43 above).

163    Finally, it is worth adding that the applicant has not established that allocating the measure at issue to all airlines operating in Romania, according to their market share, would not have deprived that measure of its effectiveness.

164    It must therefore be held that the difference in treatment in favour of TAROM was appropriate for the purposes of making good the damage and that the grant of the measure to TAROM alone did not go beyond what was necessary to attain the objective pursued by it.

165    It follows, in any event and in so far as the difference in treatment instituted by the measure at issue can be equated to discrimination, that it was justified to grant the benefit of the measure at issue only to TAROM and that that measure does not infringe the principle of non-discrimination.

(b)    Breach of the principles of the freedom to provide services and the freedom of establishment

166    First, it should be recalled that the provisions of the FEU Treaty concerning the freedom of establishment are aimed at ensuring that foreign nationals and companies are treated in the host Member State in the same way as nationals of that State (see judgment of 6 October 2015, Finanzamt Linz, C‑66/14, EU:C:2015:661, paragraph 26 and the case-law cited).

167    Secondly, the freedom to provide services precludes the application of any national legislation which has the effect of making the provision of services between Member States more difficult than the provision of services purely within one Member State, irrespective of whether there is discrimination on the grounds of nationality or residence (judgment of 6 February 2003, Stylianakis, C‑92/01, EU:C:2003:72, paragraph 25). However, it should be stated that, pursuant to Article 58(1) TFEU, the freedom to provide services in the field of transport is governed by the provisions of the Title relating to transport, namely Title VI of the FEU Treaty. The freedom to provide services in the field of transport is therefore governed, in the primary law, by a special legal regime (judgment of 18 March 2014, International Jet Management, C‑628/11, EU:C:2014:171, paragraph 36). Consequently, Article 56 TFEU, which enshrines the freedom to provide services, does not apply as such to the air transport sector (judgment of 25 January 2011, Neukirchinger, C‑382/08, EU:C:2011:27, paragraph 22).

168    Measures liberalising air transport services may therefore only be adopted under Article 100(2) TFEU (judgment of 18 March 2014, International Jet Management, C‑628/11, EU:C:2014:171, paragraph 38). As the applicant rightly notes, the EU legislature adopted Regulation (EC) No 1008/2008 of the European Parliament and of the Council of 24 September 2008 on common rules for the operation of air services in the Community (OJ 2008 L 293, p. 3) on the basis of that provision, and its very purpose is to define the conditions for applying in the air transport sector the principle of the freedom to provide services (see, by analogy, judgment of 6 February 2003, Stylianakis, C‑92/01, EU:C:2003:72, paragraphs 23 and 24).

169    In the present case, the applicant submits, in essence, that the aid measure at issue constitutes a restriction on the freedom of establishment and the freedom to provide services on account of its discriminatory nature.

170    While it is true that the measure at issue relates to individual aid which benefits only TAROM, the applicant has not shown how that exclusive character is such as to deter it from providing services from Romania and to Romania, or from exercising its freedom of establishment in that Member State. In particular, it fails to identify the elements of fact or law which cause the measure at issue to produce restrictive effects that go beyond those which trigger the prohibition in Article 107(1) TFEU, but which, as has been stated in paragraphs 153 to 163 above, are nevertheless necessary and proportionate to make good the damage caused to TAROM by the COVID-19 pandemic, in accordance with the requirements laid down in Article 107(2)(b) TFEU.

171    Consequently, the measure at issue does not constitute a restriction on the applicant’s freedom of establishment or freedom to provide services. It follows that the applicant is not justified in criticising the Commission for not having examined the compatibility of that measure with the freedom of establishment and the freedom to provide services.

172    It follows from the foregoing that the second plea must be rejected as unfounded.

3.      Third plea in law, alleging that the Commission should have initiated the formal investigation procedure

173    The applicant claims, in essence, that the examination conducted by the Commission was incomplete and insufficient, as is demonstrated, inter alia, by its arguments put forward in support of the first and second pleas. That is indicative of the existence of serious difficulties, which should have led the Commission to initiate the formal investigation procedure and to give the applicant the opportunity to submit its observations.

174    The Commission disputes the applicant’s arguments.

175    It must be held that this plea lacks any independent content. Under such a plea, the applicant may, in order to preserve the procedural rights which it enjoys under the formal investigation procedure, rely only on pleas which show that the assessment of the information and evidence which the Commission had or could have had at its disposal during the preliminary examination phase of the measure notified (see, to that effect, judgment of 22 December 2008, Régie Networks, C‑333/07, EU:C:2008:764, paragraph 81) ought to have raised doubts as to the compatibility of that measure with the internal market (see, to that effect, judgments of 9 July 2009, 3F v Commission, C‑319/07 P, EU:C:2009:435, paragraph 35, and of 24 May 2011, Commission v Kronoply and Kronotex, C‑83/09 P, EU:C:2011:341, paragraph 59), such as the insufficient or incomplete nature of the examination carried out by the Commission during the preliminary examination procedure or the existence of complaints originating from third parties. The third plea repeats in condensed form the arguments raised under the first and second pleas, without identifying specific elements relating to the existence of potential serious difficulties.

176    For those reasons, the Court having examined and rejected the said pleas, the third plea must also be rejected.

4.      Fourth plea in law, alleging infringement of the obligation to state reasons

177    The applicant submits that the Commission infringed the second paragraph of Article 296 TFEU in so far as (i) it failed to assess the value of the competitive advantage granted to TAROM; (ii) it failed to state reasons for its calculation of the amount of the aid and ignored the proportion of TAROM’s losses arising from its difficulties before the COVID-19 pandemic; (iii) it failed to verify whether TAROM had taken measures to mitigate the damage during the relevant period and relied solely on Romania’s confirmation to that effect; and (iv) it did not examine whether the measure at issue was discriminatory and whether it was compatible with Regulation No 1008/2008 and the principles of the freedom to provide services and the freedom of establishment.

178    The Commission disputes the applicant’s arguments.

179    In that regard, it should be borne in mind that, according to settled case-law, the statement of reasons required by Article 296 TFEU is an essential procedural requirement (see judgment of 18 June 2015, Ipatau v Council, C‑535/14 P, EU:C:2015:407, paragraph 37 and the case-law cited) and must be appropriate to the measure at issue and disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure concerned in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the competent court to exercise its power of review. The requirements to be satisfied by the statement of reasons depend on the circumstances of each case, in particular the content of the measure concerned, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 296 TFEU must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (judgments of 2 April 1998, Commission v Sytraval and Brink’s France, C‑367/95 P, EU:C:1998:154, paragraph 63; of 22 June 2004, Portugal v Commission, C‑42/01, EU:C:2004:379, paragraph 66; and of 15 April 2008, Nuova Agricast, C‑390/06, EU:C:2008:224, paragraph 79).

180    In the present case, as regards the nature of the measure at issue, the contested decision was adopted at the end of the preliminary stage of the procedure for reviewing aid under Article 108(3) TFEU, the sole purpose of which is to allow the Commission to form a prima facie opinion on the partial or complete compatibility of the aid concerned without opening the formal investigation procedure under paragraph 2 of that article, which, for its part, is designed to enable the Commission to be fully informed of all the facts pertaining to that aid.

181    Such a decision, which is taken within a short period of time, must simply set out the reasons for which the Commission takes the view that it is not faced with serious difficulties in assessing the compatibility of the aid at issue with the internal market (judgment of 22 December 2008, Régie Networks, C‑333/07, EU:C:2008:764, paragraph 65).

182    In that regard, first, in so far as the applicant refers to the competitive advantage resulting from the discriminatory nature of the measure at issue, it is sufficient to state, as follows from paragraphs 138 to 140 above, that the Commission did not have to take such an advantage into consideration for the purpose of assessing the compatibility of that measure with the internal market, such that it did not have to refer to it in the contested decision, either.

183    Secondly, as regards the calculation of the amount of the aid and the proportion of losses resulting from TAROM’s pre-existing difficulties, it is apparent from paragraphs 32 to 39 of the contested decision that the methodology used for calculating the damage was set out in detail and that the amount of damage estimated by using the first methodology was chosen in order to determine the amount of the aid at issue, given that it was lower than the amount estimated by using the second methodology and therefore appeared the most conservative. Furthermore, as is indicated in paragraphs 31 and 71 of the contested decision, the amount of the damage should have been assessed ex post. Furthermore, as regards the distinction between pre-existing difficulties and difficulties linked to the COVID-19 pandemic, it is apparent from paragraphs 32 and 33 of the contested decision that the calculation methodology used by the Romanian authorities to assess the damage allowed it to draw such a distinction and to identify the damage caused solely by the travel restrictions linked to the COVID‑19 pandemic, as has been noted in paragraphs 79 to 86 above.

184    Thirdly, the applicant submits that the Commission did not verify whether TAROM had taken measures to mitigate the damage during the relevant period and relied solely on Romania’s confirmation to that effect. In that regard, it must be held that, in so far as it has been concluded that the amount of damage suffered by TAROM had been correctly assessed and had not been overestimated, the Commission was entitled to rely solely on the commitment of the Romanian authorities to exclude the benefit of the measure at issue if it were found, in an ex post verification, that TAROM was responsible for the damage. Furthermore, it should be noted that, as is apparent from paragraph 72 of the contested decision, TAROM had taken measures in order to act diligently and to minimise its damage.

185    Fourthly, as regards the principle of non-discrimination and the principles of the freedom to provide services and the freedom of establishment, it should, admittedly, be recalled that, according to the case-law, where the beneficiaries of the measure, on the one hand, and other excluded operators, on the other, are in a comparable situation, the EU institution which is the author of the act is under a duty to explain in what way the difference in treatment thus introduced is objectively justified and to give specific reasons in that regard (judgment of 15 April 2008, Nuova Agricast, C‑390/06, EU:C:2008:224, paragraph 82). However, unlike the measure concerned in the case which gave rise to that judgment, which constituted an aid scheme, the measure at issue in the present case is an individual aid measure and, consequently, the Commission was not obliged to provide, in the contested decision, specific reasons as regards the compatibility of that measure with those principles.

186    In any event, the contested decision contains information which makes it possible to understand the important role played by TAROM in the supply of air transport services in Romania and within the Romanian economy and, consequently, the reasons why Romania chose that company as the sole beneficiary of the measure at issue, as is apparent from paragraphs 156 and 159 above.

187    It follows from the foregoing that the contested decision contains an adequate statement of reasons and that, consequently, the fourth plea must be rejected as unfounded.

188    Accordingly, the action must be dismissed in its entirety.

IV.    Costs

189    Under Article 134(1) of the Rules of Procedure of the General Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the applicant has been unsuccessful, it must be ordered to bear its own costs and to pay those incurred by the Commission, in accordance with the form of order sought by the latter.

On those grounds,

THE GENERAL COURT (Tenth Chamber)

hereby:

1.      Dismisses the action;

2.      Orders Wizz Air Hungary Légiközlekedési Zrt. (Wizz Air Hungary Zrt.) to pay the costs.

Kornezov Buttigieg Hesse

Delivered in open court in Luxembourg on 18 October 2023.

V. Di Bucci M. van der Woude

Registrar President

*      Language of the case: English.