JUDGMENT OF THE COURT (Fourth Chamber)
14 September 2023 (*)
(Appeal – State aid – Aviation sector – Operational aid granted by the Federal Republic of Germany to Frankfurt-Hahn airport – Article 108 TFEU – Decision not to open the formal investigation procedure – Action for annulment – Status as an interested party – Safeguard of procedural rights)
In Case C‑466/21 P,
APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 29 July 2021,
Land Rheinland-Pfalz, represented by R. van der Hout and C. Wagner, Rechtsanwälte,
appellant,
the other parties to the proceedings being:
Deutsche Lufthansa AG, established in Cologne (Germany), represented by A. Martin-Ehlers, Rechtsanwalt,
applicant at first instance,
European Commission, represented by C. Georgieva and T. Maxian Rusche, acting as Agents,
defendant at first instance,
Federal Republic of Germany,
intervener at first instance,
THE COURT (Fourth Chamber),
composed of C. Lycourgos (Rapporteur), President of the Chamber, L.S. Rossi, J.‑C. Bonichot, S. Rodin and O. Spineanu-Matei, Judges,
Advocate General: P. Pikamäe,
Registrar: M. Krausenböck, Administrator,
having regard to the written procedure and further to the hearing on 30 November 2022,
after hearing the Opinion of the Advocate General at the sitting on 9 March 2023,
gives the following
Judgment
1 By its appeal, Land Rheinland-Pfalz (Land of Rhineland-Palatinate, Germany; ‘the Land’) seeks the setting aside of the judgment of the General Court of the European Union of 19 May 2021, Deutsche Lufthansa v Commission (T‑218/18, ‘the judgment under appeal’, EU:T:2021:282), by which the General Court annulled Commission Decision C(2017) 5289 final of 31 July 2017 on State aid SA.47969 (2017/N) implemented by Germany concerning operating aid granted to Frankfurt-Hahn airport (‘the decision at issue’).
2 By its cross-appeal the European Commission also seeks to have the judgment under appeal set aside.
3 By its cross-appeal, Deutsche Lufthansa AG (‘DLH’) seeks to have that judgment set aside to the extent that the General Court dismissed the second complaint of the first part of the sole plea that it had raised in the action at first instance.
Legal context
Regulation (EU) 2015/1589
4 Article 1 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) provides:
‘For the purposes of this Regulation the following definitions shall apply:
…
(h) “interested party” means any Member State and any person, undertaking or association of undertakings whose interests might be affected by the granting of aid, in particular the beneficiary of the aid, competing undertakings and trade associations.’
5 Article 4 of that regulation provides:
‘…
3. Where the Commission, after a preliminary examination, finds that no doubts are raised as to the compatibility with the internal market of a notified measure, in so far as it falls within the scope of Article 107(1) TFEU, it shall decide that the measure is compatible with the internal market (“decision not to raise objections”). That decision shall specify which exception under the TFEU has been applied.
4. Where the Commission, after a preliminary examination, finds that doubts are raised as to the compatibility with the internal market of a notified measure, it shall decide to initiate proceedings pursuant to Article 108(2) TFEU (“decision to initiate the formal investigation procedure”).
…’
Regulation (EU) No 651/2014
6 Article 56a of Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 [TFEU] (OJ 2014 L 187, p. 1), as amended by Commission Regulation (EU) 2017/1084 of 14 June 2017 (OJ 2017 L 156, p. 1), (‘Regulation No 651/2014’), provides:
‘1. Investment aid to an airport shall be compatible with the internal market within the meaning of Article 107(3) of the Treaty and shall be exempted from the notification requirement of Article 108(3) of the Treaty, provided that the conditions laid down in paragraphs 3 to 14 of this Article and in Chapter I are fulfilled.
2. Operating aid to an airport shall be compatible with the internal market within the meaning of Article 107(3) of the Treaty and shall be exempted from the notification requirement of Article 108(3) of the Treaty, provided that the conditions laid down in paragraphs 3, 4, 10 and 15 to 18 of this Article and in Chapter I are fulfilled.
…
6. The investment aid shall not be granted to an airport located within 100 kilometres or 60 minutes travelling time by car, bus, train or high-speed train from an existing airport from which scheduled air services, within the meaning of Article 2(16) of 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),] are operated.
7. Paragraphs 5 and 6 shall not apply to airports with average annual passenger traffic of up to 200.000 passengers during the two financial years preceding the year in which aid is actually granted if the investment aid is not expected to result in the airport increasing its average annual passenger traffic to above 200.000 passengers within two financial years following the granting of the aid. Investment aid granted to such airports shall comply either with paragraph 11 or with paragraphs 13 and 14.
8. Paragraph 6 shall not apply where the investment aid is granted to an airport situated within 100 kilometres from existing airports from which scheduled air services, within the meaning of Article 2(16) of Regulation (EC) No 1008/2008, are operated, provided the route between each of these other existing airports and the airport receiving the aid necessarily involves either a total travelling time by maritime transportation of at least 90 minutes or air transportation.
…’
Guidelines on aid in the aviation sector
7 Point 25 of the Guidelines on State aid to airports and airlines (OJ 2014 C 99, p. 3) (‘Guidelines on aid in the aviation sector’) provides:
‘25. For the purposes of these Guidelines, the following definitions apply:
…
(12) “catchment area of an airport” means a geographic market boundary that is normally set at around 100 kilometres or around 60 minutes travelling time by car, bus, train or high-speed train; however, the catchment area of a given airport may be different and needs to take into account the specificities of each particular airport. The size and shape of the catchment area varies from airport to airport, and depends on various characteristics of the airport, including its business model, location and the destinations it serves;
…’
8 Points 114, 115, 131 and 132 of the Guidelines on aid in the aviation sector, which form part of Section 5.1.2 thereof, entitled ‘Operating aid to airports’, provide:
‘114. Nevertheless, the duplication of unprofitable airports does not contribute to an objective of common interest. Where an airport is located in the same catchment area as another airport with spare capacity, the business plan, based on sound passenger and freight traffic forecasts, must identify the likely effect on the traffic of the other airports located in that catchment area.
115. Accordingly, the Commission will have doubts as to the prospects for an unprofitable airport to achieve full operating cost coverage at the end of the transitional period, if another airport is located in the same catchment area.
…
131. When assessing the compatibility of operating aid the Commission will take account of the distortions of competition and the effects on trade. Where an airport is located in the same catchment area as another airport with spare capacity, the business plan, based on sound passenger and freight traffic forecasts, must identify the likely effect on the traffic of the other airports located in that catchment area.
132. Operating aid for an airport located in the same catchment area will be considered compatible with the internal market only when the Member State demonstrates that all airports in the same catchment area will be able to achieve full operating cost coverage at the end of the transitional period.’
Background to the dispute
9 On 7 April 2017, the Federal Republic of Germany notified the Commission of its intention to grant operating aid in successive instalments between 2018 and 2022, to Frankfurt-Hahn airport, on the basis that the airport was loss-making (‘the aid at issue’). That airport is operated by Flughafen Frankfurt-Hahn GmbH (‘FFHG’).
10 By the decision at issue, the Commission decided, in essence, that there was no need to initiate the formal investigation procedure under Article 108(2) TFEU since, although the aid at issue constituted ‘[State] aid’ within the meaning of Article 107(1) TFEU, it was compatible with the internal market under Article 107(3)(c) TFEU. The Commission justified that decision inter alia by stating that there were no other airports in the catchment area of Frankfurt-Hahn airport, which was the beneficiary of that aid.
11 Before adopting the decision at issue, the Commission had adopted two decisions relating to measures taken by the Federal Republic of Germany for the benefit of Frankfurt-Hahn airport and Ryanair, namely, first, Decision (EU) 2016/788 of 1 October 2014 on the State aid SA.32833 (11/C) (ex 11/NN) implemented by Germany concerning the financing arrangements for Frankfurt Hahn airport put into place in 2009 to 2011 (OJ 2016 L 134, p. 1), which was the object of an action for annulment dismissed by the General Court by the order of 17 May 2019, Deutsche Lufthansa v Commission (T‑764/15, EU:T:2019:349), and, secondly, Decision (EU) 2016/789 of 1 October 2014 on the State aid SA.21121 (C29/08) (ex NN 54/07) implemented by Germany concerning the financing of Frankfurt-Hahn airport and the financial relations between the airport and Ryanair (OJ 2016 L 134, p. 46), which was the object of an action for annulment dismissed by the General Court by the judgment of 12 April 2019, Deutsche Lufthansa v Commission (T‑492/15, EU:T:2019:252). The appeals brought against those two decisions of the General Court were dismissed by the Court of Justice by its judgments of 15 July 2021, Deutsche Lufthansa v Commission (C‑453/19 P, EU:C:2021:608), and of 20 January 2022, Deutsche Lufthansa v Commission (C‑594/19 P, EU:C:2022:40).
12 Moreover, on 26 October 2018, the Commission decided to initiate the formal investigation procedure, on the basis of a complaint received from DLH, registered as Case SA.43260, concerning other measures in favour of Frankfurt-Hahn airport and Ryanair. That decision was published in the Official Journal of the European Union on 13 September 2019 (OJ 2019 C 310, p. 5) (‘the Hahn IV decision’).
The procedure before the General Court and the judgment under appeal
13 By an application lodged at the Registry of the General Court on 29 March 2018, the airline company DLH brought an action for annulment of the decision at issue.
14 Before the General Court, DLH made, in essence, a single plea that was divided into three parts alleging, first, the failure of the Commission to take into account the essential facts of the case submitted to it, second, the failure of the Commission to take into account other aids that had already been granted to Frankfurt-Hahn airport and, third, errors of assessment committed by the Commission.
15 By the judgment under appeal, the General Court first of all held that the action brought by DLH was admissible. On the substance, the General Court held that, regarding the catchment area of the Frankfurt-Hahn airport, the Commission had failed properly to take into account all of the criteria that it was required to address in its assessment under the Guidelines on aid in the aviation sector and that, therefore, the ‘insufficient and incomplete nature’ of the examination that followed had not made it possible for that institution to be able to remove any doubt as to the compatibility of the aid at issue with the internal market. Accordingly, whilst having rejected all of the other complaints raised by DLH, the General Court partially upheld the third part of the single plea raised by DLH in the action at first instance and, on that basis, annulled the decision at issue.
Forms of order sought by the parties
Forms of order sought in the main appeal
16 By its appeal, the Land claims that the Court should:
– set aside the judgment under appeal and definitively dismiss the action at first instance, and
– order DLH to pay the costs of the proceedings at first instance and on appeal.
17 DLH contends that the Court should:
– dismiss the appeal as inadmissible and, in any event, as unfounded, and
– order the Land to pay the costs.
18 The Commission submits that the Court should:
– set aside the judgment under appeal;
– dismiss the action at first instance as inadmissible and, in any event, as unfounded, and
– order DLH to pay the costs of the proceedings at first instance and on appeal.
The forms of order sought in the cross-appeal brought by DLH
19 By its cross-appeal, DLH claims that the Court should:
– set aside the judgment under appeal to the extent that the General Court dismissed the second complaint of the first part of the sole plea, and
– order the Land to pay the costs.
20 The Land contends that the Court should:
– dismiss the cross-appeal brought by DLH;
– set aside the judgment under appeal and ‘definitively dismiss’ the action at first instance, and
– order DLH to pay the costs of the proceedings at first instance and on appeal.
21 The Commission submits that the Court should:
– dismiss the cross-appeal brought by DLH as inadmissible and, in any event, as unfounded, and
– order DLH to pay the costs of the proceedings at first instance and on appeal.
The forms of order sought in the cross-appeal brought by Commission
22 By its cross-appeal, the Commission claims that the Court should:
– set aside the judgment under appeal;
– dismiss the action at first instance as inadmissible and, in any event, as unfounded, and
– order DLH to pay the costs of the proceedings at first instance and on appeal.
23 DLH contends that the Court should:
– dismiss the cross-appeal brought by the Commission as inadmissible and, in any event, as unfounded, and
– order the Commission to pay the costs.
24 The Land contends that the Court should:
– allow the Commission’s cross-appeal;
– set aside the judgment under appeal and ‘definitively dismiss’ the action at first instance, and
– order DLH to pay the costs of the proceedings at first instance and on appeal.
The application for suspension of the effects of the judgment under appeal
25 By a request lodged on 10 September 2021, the Land asked the Court to order the suspension of the effects of the judgment under appeal.
26 By the order of 30 November 2021, Land Rheinland-Pfalz v Deutsche Lufthansa (C‑466/21 P-R, EU:C:2021:972), the Vice-President of the Court rejected that request.
The application for the reopening of the oral procedure
27 Following the delivery of the Advocate General’s Opinion, DLH applied, by two documents lodged at the Court Registry on 6 April 2023 and 11 July 2023, for an order that the oral part of the procedure be reopened, pursuant to Article 83 of the Rules of Procedure of the Court of Justice.
28 In support of its application, DLH submitted that there were new facts, which it had not known of before reading that Opinion. They were, first, the lodging by the Land of a pleading in ongoing proceedings brought against it, before the Landgericht Köln (Regional Court, Cologne, Germany) regarding the recovery of amounts corresponding to the measures referred to in the Hahn IV decision. DLH observes, more specifically, that, in that pleading, the Land submits that it and Ryanair were in competition with each other. Second, DLH submits that there is a judgment from the Oberlandesgericht Koblenz (Higher Regional Court, Koblenz, Germany), which recognised that the aids granted to Frankfurt-Hahn airport constituted a cross-subsidy benefiting Ryanair, which confirms that DLH is directly and individually concerned by those aids.
29 In accordance with Article 83 of its Rules of Procedure, the Court may, at any time, after hearing the Advocate General, order the reopening of the oral part of the procedure, in particular where a party has, after the close of that part of the procedure, submitted a new fact which is of such a nature as to be a decisive factor for the decision.
30 However, in this case, the applications made by DLH do not disclose the existence of any new fact of such a nature as to be a decisive factor for the decision that the Court is called upon to make.
31 Accordingly, the Court considers, after hearing the Advocate General, that there is no need to order that the oral part of the procedure be reopened.
Admissibility of the main appeal and the Commission’s cross-appeal
The admissibility of the main appeal
Arguments of the parties
32 DLH submits that the main appeal is inadmissible because, first, the document produced by the Land as proof of its lawyer’s authority to act was too old and general and contained no information as to the identity of the person to be represented, even if it is signed on behalf of the Land. Secondly, DLH considers that the Land is directly affected by the judgment under appeal only as a result of its obligation to recover the instalments of the aid at issue which have already been granted to FFHG and not to pay the latter any of those instalments in the future. The Land has refused to comply with that obligation. The lodging of the appeal is therefore ‘vexatious’. Thirdly, the judgment under appeal does not entail any change in the Land’s legal situation, and seeks, in reality, to protect the interests of FFHG, of FFHG’s new shareholders and of Ryanair. Fourthly, the Land does not have an interest in bringing proceedings, as the setting aside of the judgment under appeal would not procure any benefit for it.
33 In its rejoinder and at the hearing before the Court, DLH submitted, lastly, that the appeal failed to have regard to the principle of res judicata, the force of which applied to the order of the General Court of 17 May 2019, Deutsche Lufthansa v Commission (T‑764/15, EU:T:2019:349) and that the Land no longer had an interest in bringing proceedings, as FFHG’s current financial situation meant that it was not possible for it to obtain payment of the remainder of the aid at issue.
34 The Land and the Commission submit that DLH’s arguments must be rejected.
Findings of the Court
35 As regards, in the first place, the argument, relied on by DLH in its rejoinder and at the hearing before the Court, that the appeal is inadmissible in that it seeks to call into question the force of res judicata of the order of 14 December 2017 Deutsche Lufthansa v Commission (T‑764/15, EU:T:2017:933), it must be recalled that under Article 127 of the Rules of Procedure of the Court of Justice, no new plea in law may be introduced in the course of proceedings unless it is based on matters of law or of fact which come to light in the course of the procedure.
36 Therefore, as the argument relating to whether the order of 14 December 2017 Deutsche Lufthansa v Commission (T‑764/15, EU:T:2017:933) has the force of res judicata was not invoked by DLH in its response to the appeal and as that argument is not based on matters of law and of fact that came to light in the course of the procedure, it must be held that that argument is out of time and, consequently, it must be rejected as inadmissible.
37 In the second place, according to Article 56 of the Statute of the Court of Justice of the European Union, interveners other than the Member States and institutions of the European Union can bring an appeal against a decision of the General Court only if that decision directly affects them.
38 In this case, the Land, which was an intervener before the General Court, has shown to the requisite legal standard that the judgment under appeal directly affects it.
39 As the Land points out in its appeal, the consequence of that judgment is that, first, it is obliged to recover the instalments of the aid at issue that have already been awarded to FFHG and, second, it is prohibited from paying out new instalments of that aid in the future.
40 DLH’s argument, which it raised at the hearing before the Court, that taking account of the insolvency proceedings of which FFHG is now the object, FFHG could not in any event be in a position to receive the remaining instalments of the aid at issue, is not capable of altering that conclusion. Even if that were so, it remains the case that the judgment under appeal would still oblige the Land to recover, in any event, the instalments of the aid at issue that it has already paid to FFHG.
41 In addition, the fact that the Land had not taken all of the measures required by the judgment under appeal, even if that were established, is not capable of altering the findings made in paragraphs 39 and 40 of this judgment, which suffice to demonstrate that the Land is directly affected by the judgment under appeal and that it may therefore bring an appeal against that judgment, without it being necessary to examine, in addition, whether that party has an interest in bringing proceedings.
42 In the third place, the Land’s lawyer’s authority to act expressly provides that it may represent the Land before the EU Courts in litigation concerning matters of State aid. Moreover, DLH neither alleges nor establishes that, despite having been issued on 7 June 2019, that authority to act is no longer valid. Therefore, that authority to act satisfies the conditions laid down in Article 44(1)(b) of the Rules of Procedure of the Court of Justice (see, to that effect, judgment of 28 February 2018, mobile.de v EUIPO, C‑418/16 P, EU:C:2018:128, paragraphs 34 and 39).
43 It follows that the Land’s appeal is admissible.
The admissibility of the cross-appeal brought by Commission
Arguments of the parties
44 DLH submits that the cross-appeal brought by the Commission is inadmissible on the ground that, in the first place, it fails to state the date on which the Land’s appeal was served on that institution, contrary to Article 177(1)(b) of the Rules of Procedure of the Court of Justice.
45 In the second place, the Commission’s cross-appeal fails to comply with the second sentence of Article 178(3) of those rules of procedure since it is, in large part, identical to the pleading lodged by that institution in response to the main appeal.
46 In the third place, that cross-appeal is inadmissible because the main appeal is itself inadmissible.
47 In the fourth place, the lodging of that cross-appeal is vexatious since the Commission has not engaged any infringement procedure against the Federal Republic of Germany, whereas DLH informed it that, following the Hahn IV decision, neither FFHG nor the Land had recovered the aids concerned from Ryanair in order for the corresponding amounts to be transferred to a blocked account.
48 The Commission and the Land submit that DLH’s arguments must be rejected.
Findings of the Court
49 As regards, in the first place, DLH’s argument that the cross-appeal brought by the Commission is inadmissible, on the ground that the Land’s appeal is equally inadmissible, it suffices to note that that argument must be rejected having regard to the findings set out in paragraphs 35 to 43 of this judgment.
50 In the second place, it must be recalled that, in accordance with Articles 172 and 174 of the Rules of Procedure of the Court of Justice, parties to the relevant case before the General Court having an interest in the appeal being allowed or dismissed may submit a response which seeks to have that appeal allowed or dismissed, in whole or in part. Those parties may also, by virtue of Articles 176 and Article 178(1) and (3) of those rules of procedure, submit a cross-appeal which must be introduced by a document, separate from the response, which seeks to have set aside, in whole or in part, the decision of the General Court by relying on grounds of appeal and arguments that are separate from those relied on in the response (order of 7 December 2017, Eurallumina v Commission, C‑323/16 P, EU:C:2017:952, paragraph 30, and 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 47).
51 It is apparent from those provisions, read as a whole, that the response may not seek to have the judgment of the General Court set aside on the basis of distinct and independent grounds from those raised in the appeal, since such grounds may be raised only as part of a cross-appeal (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 48). It also follows that the cross-appeal must, as a rule, contain grounds and arguments that are separate from and independent of those raised in that same party’s response to the main appeal.
52 In this case, several of the grounds raised in the Commission’s cross-appeal are the same, in part, as the arguments made by it in the response that it lodged in support of the Land’s appeal.
53 Nevertheless, it should be noted that, by its cross-appeal, the Commission itself applies to have set aside the judgment under appeal by relying on grounds of appeal that are partly distinct and independent from those relied on in the main appeal. Pursuant to the rules recalled in paragraph 50 of this judgment, such an application may not be made nor such grounds raised in the response and therefore, by bringing a cross-appeal, the Commission has complied with those rules. In those circumstances, the Commission cannot be criticised for having set out in the cross-appeal all of the grounds of appeal put forward in support of its application to have the judgment under appeal set aside, including those grounds that were also raised in its response, instead of dividing its grounds between that cross-appeal and the response, at the risk of harming the consistency of its reasoning (see, to that effect, order of 7 December 2017, Eurallumina v Commission, C‑323/16 P, EU:C:2017:952, paragraph 31).
54 In the third place, according to Article 177(1)(b) of the Rules of Procedure of the Court of Justice, a cross-appeal must state the date on which the main appeal was served on the party bringing the cross-appeal. DLH observes that that date is not given in the cross-appeal brought by the Commission in this case.
55 Even though it is true that that reference does not appear in the cross-appeal, it is common ground that the date on which the main appeal was served on the Commission, namely 5 August 2021, is expressly referred to in the response to the main appeal that the Commission lodged and which has been served on both DLH and the Land. Moreover, it is not contested that the cross-appeal was brought by the Commission within the time limit prescribed.
56 It follows that the fact that the Commission failed to include, in its cross-appeal, the reference required by Article 177(1)(b) of the Rules of Procedure of the Court of Justice does not constitute an irregularity capable of leading to the inadmissibility of that cross-appeal, since the other parties have been placed in a position to be able to verify that the cross-appeal had properly been brought within the time limit of two months from service of the appeal.
57 Contrary to DLH’s submission in its rejoinder to the main appeal, the fact that the forms of order sought in the Commission’s response to the main appeal seek to have set aside the judgment under appeal and not, as required by Article 174 of the Rules of Procedure of the Court of Justice, in the upholding or dismissing, whether in full or in part, of that appeal, does not change that conclusion. Such an irregularity does not result in the inadmissibility of the form of order by which the Commission seeks, in its response, the setting aside of the judgment under appeal (see, to that effect, judgment of 30 May 2017, Safa Nicu Sepahan v Council, C‑45/15 P, EU:C:2017:402, paragraph 21).
58 Lastly, the fact, even if it were established, that the Land would not undertake the necessary steps to comply with the judgment under appeal or the Hahn IV decision is not such as to render inadmissible the Commission’s cross-appeal which seeks to have that judgment set aside.
59 Therefore, the Commission’s cross-appeal is admissible.
The substance of the main appeal and the Commission’s cross-appeal
Preliminary observations
60 In support of its appeal, the Land raises five grounds, alleging, first, an infringement of the fourth paragraph of Article 263 TFEU and a failure to give reasons, second, an error of law as to the assessment of the catchment area of Frankfurt-Hahn airport, third, an infringement of the principle of ne ultra petita, fourth, an infringement of the conditions under which the Commission may decide not to initiate the formal investigation procedure under Article 108(2) TFEU and, fifth, an infringement of Article 264 TFEU.
61 In support of its cross-appeal, the Commission raises six grounds, alleging, first, an infringement of Article 263 TFEU, second, an infringement of the rules on the burden of proof, the obligation to respond to the arguments relied on by the parties and to hear those parties, third, the application of an incorrect criterion for the purpose of examining the validity of the Commission’s decision not to initiate the formal investigation procedure provided for in Article 108(2) TFEU, fourth, an incorrect interpretation of the Guidelines on aid in the aviation sector, fifth, an infringement of the rules on the burden of proof and, sixth, a misinterpretation of the Rules of Procedure of the General Court, an erroneous assessment of its own motion and the distortion of an item of evidence.
The grounds alleging that DLH does not have an interest in bringing proceedings
Arguments of the parties
– The first ground of the main appeal
62 By its first ground of appeal, the Land alleges that the General Court infringed the fourth paragraph of Article 263 TFEU and its duty to state reasons.
63 In the second part of that first ground, the Land considers, more specifically, that the General Court erred in law in finding, in paragraphs 62 and 86 of the judgment under appeal, that it followed from an analysis of the whole of the application at first instance that, before it, DLH had raised the issue of a breach of its procedural rights. DLH merely submitted, in that application, errors committed by the Commission when authorising the aid at issue. By limiting itself to finding that the allegation of that infringement was derived from an analysis of the whole of that application, the General Court, furthermore, failed to comply with its duty to state reasons.
64 The Commission considers, first, that the General Court distorted the meaning of that application or, at the very least, interpreted it in a manner that was legally incorrect, since it found that it contained a single plea in law, alleging an infringement of DLH’s procedural rights, whereas, in reality, it contained several pleas in law. Second, the General Court’s statement, in paragraphs 59, 62 and 86 of the judgment under appeal, that it suffices for one of the infringements of procedural rights to be denounced by the action or by the whole of the application is contrary to the fourth paragraph of Article 263 TFEU.
65 DLH replies that, in paragraph 55 et seq. of its application at first instance, it explicitly alleged an infringement of its procedural rights, that aspect even being referred to in the object of its action at first instance as well as in the grounds raised in support of it, as paragraph 14 of that application shows.
– The second ground of the Commission’s cross-appeal
66 By the second ground of its cross-appeal, the Commission, supported by the Land, submits that the General Court failed correctly to apply the rules on the burden of proof and its obligation to respond to the arguments put forward by the parties and to hear those parties.
67 In the first part of that second ground, the Commission submits that DLH never stated before the General Court that the airports of Frankfurt-Hahn and Frankfurt Main were in competition nor that the aids in favour of the former could have any effect whatsoever on the latter.
68 Paragraph 50 of the judgment under appeal therefore was vitiated by an error of law in that the General Court set out an allegation that DLH had not made before it, the veracity of which it did not, in any event, examine.
69 In paragraphs 52 to 54 of the judgment under appeal, the General Court concluded that there was competitive pressure from Ryanair on DLH which would be reduced if the aid at issue were not granted to FFHG, without examining the evidence provided by DLH and the Commission, which is also a failure correctly to apply the rules on the burden of proof.
70 DLH replies that, in its application at first instance, it established that the two airports concerned were in competition with each other. That situation of competition already rested on the fact, referred to in paragraphs 43 and 117 et seq. of that application, that the catchment areas of those airports overlapped. Furthermore, it submitted, in paragraph 43 of that application, that there was competition between those airports as to the air routes that departed from them.
71 In addition, the Commission could not dispute the fact, which was found by the General Court, that the airports of Frankfurt Main and Frankfurt Hahn are in competition since a cross-appeal is restricted to legal grounds.
72 In the alternative, DLH demonstrated that the Frankfurt-Hahn airport had exerted competitive pressure on Frankfurt Main airport to such an extent that the latter allowed Ryanair to open a base in March 2017.
73 In the second part of the second ground of its cross-appeal, the Commission criticises the General Court for having found, in paragraphs 52 and 53 of the judgment under appeal that, in respect of flights offered by Ryanair departing from Frankfurt-Hahn airport and flights to the same destinations operated by DLH departing from Frankfurt Main airport, Ryanair and DLH were competitors. The Commission submitted before the General Court that the flights operated by DLH departing from Frankfurt Main airport, related to ‘premium flights’ and passengers in transit, whereas Ryanair operated low cost flights within a ‘point to point’ traffic framework. The Commission also showed that the purported evidence produced by DLH did not contain any information as to the development in passenger numbers and prices and that there were substantial doubts as to which routes were in fact served by DLH and on which dates. As that line of argument of the Commission was of great importance for the outcome of the case, the General Court should have responded to it.
74 DLH replies that the General Court is under no obligation to take into account the arguments relied on before it, but merely to ensure that the right to be heard has been respected.
Findings of the Court
75 Since the decision at issue was addressed to the Federal Republic of Germany and not to DLH, it must be recalled that the fourth paragraph of Article 263 TFEU provides for two situations in which natural or legal persons are accorded standing to institute proceedings against an EU act which is not addressed to them. First, such proceedings may be instituted if the act is of direct and individual concern to those persons. Second, such persons may bring proceedings against a regulatory act not entailing implementing measures if that act is of direct concern to them (judgment of 31 January 2023, Commission v Braesch and Others, C‑284/21 P, EU:C:2023:58, paragraph 50 and the case-law cited).
76 In that regard, it must be recalled, first of all, that, in paragraph 33 of the judgment under appeal, the General Court held that, as the decision at issue concerned an individual aid, that decision could not be regarded as a regulatory act. That finding is not, moreover, disputed in the context of these appeals.
77 As regards, next, the question of whether the decision at issue is of ‘direct and individual’ concern to DLH, within the meaning of the fourth paragraph of Article 263 TFEU, it is clear from the settled case-law of the Court of Justice 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 (see, inter alia, judgments of 15 July 1963, Plaumann v Commission, 25/62, EU:C:1963:17, p. 107, and of 31 January 2023, Commission v Braesch and Others, C‑284/21 P, EU:C:2023:58, paragraph 51).
78 Since the action at first instance concerned a Commission decision concerning State aid, it must also be recalled that, in the context of the procedure for reviewing State aid provided for in Article 108 TFEU, the preliminary stage of the procedure for reviewing aid under Article 108(3) TFEU, which is intended merely to allow the Commission to form a prima facie opinion on the partial or complete conformity of the aid measure in question with the internal market, must be distinguished from the stage of the review under Article 108(2) TFEU. It is only in connection with the latter stage, which is designed to enable the Commission to acquaint itself fully with all the facts of the case, that the FEU Treaty imposes an obligation on that institution to give the parties concerned notice to submit their comments (see, inter alia, judgments of 17 September 2015, Mory and Others v Commission, C‑33/14 P, EU:C:2015:609, paragraph 94, and of 31 January 2023, Commission v Braesch and Others, C‑284/21 P, EU:C:2023:58, paragraph 52).
79 It follows that, as the General Court rightly pointed out in paragraph 36 of the judgment under appeal, where, without initiating the formal investigation procedure under Article 108(2) TFEU, the Commission finds, by a decision taken on the basis of Article 108(3) TFEU, that aid is compatible with the internal market, the persons intended to benefit from those procedural guarantees may secure compliance therewith only if they are able to challenge that decision before the EU judicature. For those reasons, an action for the annulment of such a decision, brought by a ‘party concerned’ for the purposes of Article 108(2) TFEU, is to be declared to be admissible where that person seeks, by instituting proceedings, to safeguard the procedural rights available to him or her under the latter provision (see, inter alia, judgment of 31 January 2023, Commission v Braesch and Others, C‑284/21 P, EU:C:2023:58, paragraph 53 and the case-law cited).
80 In that regard, it should be noted that the definition of the concept of ‘party concerned’, as set out in the case-law of the Court of Justice, was codified by the EU legislature in Article 1(h) of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [108 TFEU] (OJ 1999 L 83, p. 1), which was succeeded by Article 1(h) of Regulation 2015/1589. The latter provision defines the analogous concept of ‘interested party’ as ‘any Member State and any person, undertaking or association of undertakings whose interests might be affected by the granting of aid, in particular the beneficiary of the aid, competing undertakings and trade associations’ (judgment of 31 January 2023, Commission v Braesch and Others, C‑284/21 P, EU:C:2023:58, paragraph 58).
81 In the present case, it is common ground that the decision at issue was adopted at the conclusion of the preliminary examination stage, provided for in Article 108(3) TFEU and referred to in Article 4(3) of Regulation 2015/1589 and, accordingly, the formal investigation procedure provided for in Article 108(2) TFEU and referred to in Article 4(4) of that regulation was not initiated.
82 Therefore, the General Court was fully entitled to find that the action brought by DLH could be regarded as being admissible to the extent that that airline company, first, had demonstrated that it was an ‘interested party’ within the meaning of Article 1(h) of Regulation 2015/1589 and, second, had submitted that there was an infringement of its procedural rights.
83 The Land and the Commission consider however that, in paragraphs 32 to 64 of the judgment under appeal, the General Court had incorrectly held that those conditions were both satisfied in the present case.
– DLH’s status as an ‘interested party’
84 In paragraphs 39 to 56 of the judgment under appeal, the General Court held that DLH was an ‘interested party’ within the meaning of Article 1(h) of Regulation 2015/1589.
85 In that regard, it should be recalled, in the first place, that although the concept of ‘interested party’, within the meaning of that provision, includes, in particular, undertakings that compete with the beneficiary of that aid, it is nevertheless the case that, as the General Court rightly pointed out in paragraph 44 of the judgment under appeal, that concept covers an indeterminate group of persons (see, to that effect, judgments of 24 May 2011, Commission v Kronoply and Kronotex, C‑83/09 P, EU:C:2011:341, paragraph 63, and of 31 January 2023, Commission v Braesch and Others, C‑284/21 P, EU:C:2023:58, paragraph 59).
86 Thus, it follows from the case-law of the Court of Justice that an undertaking which is not a direct competitor of the beneficiary of the aid may nevertheless be categorised as an ‘interested party’, within the meaning of Article 1(h) of Regulation 2015/1589, provided that that undertaking demonstrates that its interests could be affected by the grant of the aid, which requires that that undertaking establish, to the requisite legal standard, that the aid is likely to have a specific effect on its situation. Therefore, the status as an ‘interested party’ does not necessarily presuppose a competitive relationship (see, to that effect, inter alia, judgments of 24 May 2011, Commission v Kronoply and Kronotex, C‑83/09 P, EU:C:2011:341, paragraphs 64 and 65; of 2 September 2021, Ja zum Nürburgring v Commission, C‑647/19 P, EU:C:2021:666, paragraph 58; and of 31 January 2023, Commission v Braesch and Others, C‑284/21 P, EU:C:2023:58, paragraph 60).
87 In the second place, it must be pointed out that, in paragraph 55 of the judgment under appeal, the General Court held that the grant of the aid at issue was likely to have a specific effect on DLH’s situation as regards, first, the operation of Frankfurt Main airport, which is its primary ‘hub airport’, and, second, competition in respect of destinations of flights offered by DLH departing from that airport.
88 More specifically, the General Court, first, considered in paragraph 50 of the judgment under appeal, that the aid at issue could affect the competitive position of the Frankfurt Main airport.
89 However, as the Commission correctly observes, in the first part of the second ground of its cross-appeal, it is not clear from the application at first instance that DLH relied on that argument as a reason in support of its interest in bringing proceedings. As is recalled in paragraph 86 of this judgment, it is for an applicant alone to demonstrate that the aid measure in question is likely to have a specific effect on its situation.
90 Therefore, paragraph 50 of the judgment under appeal is vitiated by an error of law.
91 Secondly, the General Court stated, in paragraphs 51 to 54 of the judgment under appeal, that, by allowing FFHG to continue its business activities, the grant of aid at issue had offered Ryanair the possibility of maintaining competitive pressure on DLH in departures from Frankfurt-Hahn airport. That finding is based on the fact that those two airline companies are competitors to the extent that they offer flights to the same destinations departing from Frankfurt-Hahn and Frankfurt Main airports, the evidence to support that finding being, as stated in paragraph 51 of the judgment under appeal, the lists of destinations which were provided by DLH in its written pleadings and at the hearing before the General Court.
92 It is thus explicitly stated in paragraph 51 that the General Court took into account the evidence produced by DLH. By contrast, as the Commission observes in the second part of the second ground of its cross-appeal, it is not in any way apparent from the judgment under appeal that the General Court took into account the arguments on which it relied before the General Court, in particular those set out in paragraphs 33 to 40 of its rejoinder, which disputed the relevance of the evidence produced by DLH for the purpose of determining whether there was a competitive relationship between that airline company and Ryanair.
93 In that regard, it must be remembered, first, that, in the context of an appeal, the purpose of review by the Court of Justice is inter alia to ascertain whether the General Court addressed, to the requisite legal standard, all the arguments put forward by the appellant; and, second, that a plea alleging that the General Court failed to address arguments relied on at first instance amounts essentially to alleging a failure to comply with the obligation to state reasons which derives from Article 36 of the Statute of the Court of Justice of the European Union, applicable to the General Court by virtue of the first paragraph of Article 53 of that statute, and from Article 117 of the Rules of Procedure of the General Court (see, to that effect, judgments of 20 May 2010, Gogos v Commission, C‑583/08 P, EU:C:2010:287, paragraph 29; of 29 September 2022, ABLV Bank v SRB, C‑202/21 P, EU:C:2022:734, paragraph 106; and of 2 February 2023, Spain and Others v Commission, C‑649/20 P, C‑658/20 P and C‑662/20 P, EU:C:2023:60, paragraph 118).
94 It is true that the General Court is not required to provide an account which follows exhaustively and one-by-one all the arguments put forward by the parties to the case, the General Court’s reasoning may therefore be implicit on condition that it enables the persons concerned to know why it has not upheld their arguments and provides the Court of Justice with sufficient material for it to exercise its power of review (judgments of 9 September 2008, FIAMM and Others v Council and Commission, C‑120/06 P and C‑121/06 P, EU:C:2008:476, paragraph 96, and of 1 December 2022, EUIPO v Vincenti, C‑653/20 P, EU:C:2022:945, paragraph 47).
95 However, in the present case, since the data submitted by the Commission sought to challenge the relevance of the data provided by DLH, in order to satisfy its obligation to state reasons the General Court should have set out the reasons why it considered that that evidence was not capable of calling into question its assessment, which was based on the evidence produced by DLH, that that airline company and Ryanair were active on the same passenger air transport market and were, therefore, competitors.
96 It follows from the foregoing that the General Court erred in law and failed to comply with its obligation to state reasons in finding that DLH was an ‘interested party’ within the meaning of Article 1(h) of Regulation 2015/1589.
97 Therefore, the first and second parts of the second ground of appeal raised by the Commission must be upheld.
– DLH’s allegation of an infringement of its procedural rights
98 In the first place it should be observed that the General Court’s assertion, in paragraph 64 of the judgment under appeal, that, in the application at first instance, DLH alleged an infringement of its procedural rights, is based on the statements that court made in paragraphs 62 and 63 of that judgment.
99 In that regard, the General Court held, in paragraph 62 of that judgment, that ‘it [was] apparent from an overall analysis of the application’ that the action brought by DLH ‘[concerned] the annulment of the decision not to raise objections, by calling into question the fact that [that] decision [had] failed to carry out a complete investigation of the aid [at issue], which [caused] harm to [DLH] in that it [was] an interested party and [infringed] its right to be heard and its procedural rights’.
100 In paragraph 63 of the judgment under appeal, the General Court also stated that ‘as regards … an action challenging the legality of the decision taken without initiating the formal investigation procedure, it was necessary to examine all of the arguments raised by [DLH] in the sole ground of appeal, in order to assess the issue of whether they [made] it possible to identify serious difficulties, the presence of which would have required the Commission to initiate that procedure’.
101 In the second place, it should be noted that it is not for the European Union judicature to interpret an action challenging exclusively the merits of the aid assessment decision as seeking, in reality, to ensure the respect of the procedural rights available to the applicant under Article 108(2) TFEU, where the applicant has not expressly raised a plea to that effect, as to do so would change the subject matter of the action (judgment of 2 September 2021, Ja zum Nürburgring v Commission, C‑647/19 P, EU:C:2021:666, paragraph 115 and the case-law cited).
102 However, an applicant’s arguments that seek specifically to show that the Commission should have initiated the formal investigation procedure are admissible where the action in support of which those arguments are invoked in effect seeks the annulment of the decision not to initiate that formal procedure and where, according to the actual wording of the application, the applicant submits that the failure to initiate the formal investigation procedure prevented it from benefiting from the procedural guarantees to which it is entitled (see, to that effect, judgment of 22 September 2011, Belgium v Deutsche Post and DHL International, C‑148/09 P, EU:C:2011:603, paragraphs 61 to 63).
103 In the present case, it is true, first, that, as the General Court pointed out in paragraph 62 of the judgment under appeal, the action brought before it by DLH sought the annulment of a decision by the Commission not to initiate the formal investigation procedure referred to in Article 108(2) TFEU.
104 However, it should secondly be noted that, as the Advocate General observed in point 98 of his Opinion, the General Court failed to comply with its obligation to state reasons in restricting itself to stating, in paragraph 62 of that judgment, that the reliance by DLH on an infringement of its procedural rights was clear on an analysis of the whole of the application at first instance. The General Court should have, on the contrary, referred explicitly to the paragraphs of that application on which it based that finding so as to make it possible for the parties, as recalled in paragraph 94 of this judgment, to understand the reasons that led it to that finding and for the Court to exercise its powers of review.
105 Thirdly, as the Advocate General also observed, in essence, in point 97 of his Opinion, the General Court was also required to examine which of the complaints raised by DLH specifically sought to establish that the Commission should have initiated the formal investigation procedure.
106 However, it is not apparent from the judgment under appeal that that examination was carried out by the General Court. On the contrary, it is clear from paragraph 63 of that judgment that the General Court considered that, since the application at first instance sought to challenge the Commission’s refusal to initiate the formal investigation procedure referred to in Article 108(2) TFEU, it was required to examine all of the arguments that DLH had relied on in order to assess whether they made it possible for serious difficulties to be identified, which would have led to the Commission being required to initiate that procedure, without having ascertained beforehand whether each of those arguments sought specifically to demonstrate the existence of such difficulties.
107 It follows that the General Court’s assessment that DLH had alleged an infringement of its procedural rights is vitiated by errors of law and a failure to state reasons.
108 Accordingly, the second part of the first ground of the Land’s appeal must be upheld.
109 Having regard to all of the foregoing considerations, and without it being necessary to rule on the first part of the first ground of the Land’s appeal or on the first ground and the third part of the second ground of the Commission’s cross-appeal seeking to challenge, for other reasons, the admissibility of the action, or the other grounds of the main appeal and cross-appeals which seek to challenge the General Court’s reasoning as to the substance or, in particular, the grounds raised by DLH in its cross-appeal as to the compliance with Article 107 TFEU of the concept of ‘overall scenario’ used by the General Court, it is necessary to set aside the judgment under appeal.
The action before the General Court
110 In accordance with the second sentence of the first paragraph of Article 61 of the Statute of the Court of Justice of the European Union, if the decision of the General Court is set aside, the Court of Justice may itself give final judgment in the matter, where the state of the proceedings so permits.
111 That is not the position in the present case.
112 Having regard to the presence of several errors of law and failures to state reasons, the examination of the admissibility of the action at first instance and, if necessary, of the merits of that action involves assessments of fact which would require, on the part of the Court, the adoption of additional measures of organisation of the procedure or investigation of the case.
113 Consequently, it is necessary to refer the case back to the General Court and to reserve the costs.
On those grounds, the Court (Fourth Chamber) hereby:
1. Sets aside the judgment of the General Court of the European Union of 19 May 2021, Deutsche Lufthansa v Commission (T‑218/18, EU:T:2021:282);
2. Refers the case back to the General Court of the European Union;
3. Reserves the costs.
[Signatures]