Case C‑284/12, Lufthansa v Flughafen Frankfurt-Hah

Court further clarifies role of national courts with regard to standstill principle of Article 108(3) TFEU


>> Flughafen Frankfurt-Hah (FFH), operator of Frankfurt Hahn Civil Airport, was owned, until January 2009, 65% by Fraport AG, 17.5% by the German federal state of Rhineland-Palatinate and 17.5% by the German federal state of Hessen. Fraport AG was a public company listed on a stock exchange and owned, as to the majority of its shares, by   Germany, the federal state of Hessen and the city of Frankfurt am Main.

FFH had generated annual losses of several million euros since the beginning of its activities. On 31 December 2011, those losses amounted to around EUR 197 million. Those were covered, until 2009, by Fraport AG on the basis of an agreement for the transfer of profits. On 1 January 2009, however, Fraport AG sold its shares to the federal state of Rhineland-Palatinate for the token sum of EUR 1.  

Ryanair was responsible for over 95% of passenger traffic through Frankfurt Hahn Airport. According to the schedule of fees of that airport for 2001, airlines using it had to pay a fee of EUR 4.35 per departing passenger. However, Ryanair was not charged any fee for take-off, approach, landing or use of the infrastructure of the airport since it exclusively used planes which, in accordance with that schedule, gave it an exemption, namely planes whose weight at take-off is between 5.7 and 90 tons.

The schedule of fees of Frankfurt Hahn Airport for 2006 was based on a grid drawn up on the basis of the number of passengers transported per year by an airline from that airport, the range being from EUR 5.35 for less than 100 000 passengers per year to EUR 2.24 for 3 million or more passengers. That schedule also made the exemption from landing and take-off fees, as well as those relating to the provision of air navigation services and ground handling services, dependent on the condition that the duration of ground handling assistance did not exceed 30 minutes. That schedule also provided for the grant of ‘marketing support’ for the opening of new air routes. The amount of that support was determined on the basis of the total volume of passengers transported by the airline concerned. Ryanair received that support. Considering that the business practices of FFH constituted State aid which had not been notified to the Commission and therefore had been granted in breach of Article 108(3) TFEU, Lufthansa brought an action before the Landgericht Bad Kreuznach. 

On 17 June 2008 the Commission decided to initiate a formal investigation procedure under Article 108(2) TFEU regarding possible State aid granted by Germany to FFH and Ryanair. The measures covered by the decision included the reduction in airport fees and marketing support provisions for the benefit of Ryanair. In that decision the Commission reached a preliminary view that each of the measures in question was selective and constituted State aid within the meaning of Article 107(1) TFEU, unless it satisfied the private investor principle. 

The Oberlandesgericht Koblenz therefore sent the Commission a request for an opinion pursuant to point 3.2 of the Commission Notice on the enforcement of State aid law by national courts. In its opinion the Commission stated that the Oberlandesgericht Koblenz itself was not required to assess whether the measures in question could or could not be classified as State aid as it could take the decision of 17 June 2008 as a basis for drawing all the necessary inferences from the infringement of Article 108(3) TFEU. With regard to the substance, the Commission stated that the measures in question were both imputable to the State and selective.

Considering, however, that it had to assess whether the measures at issue constituted State aid and, in particular, having doubts as to the selective nature of those measures, the Oberlandesgericht Koblenz decided to stay proceedings and inter alia referred the question whether, where, in accordance with Article 108(3) TFEU, the Commission had initiated a formal investigation procedure under Article 108(2) TFEU with regard to a State measure which had not been notified and was being implemented, a national court hearing an application for the cessation of the implementation of that measure and the recovery of payments already made was required to draw the appropriate conclusions from an infringement of the obligation to suspend the implementation of that measure.

The Court first of all pointed out that Article 108(3) TFEU established a prior control of plans to grant new aid (see Case 120/73 Lorenz [1973] and Case C‑199/06 CELF and Ministre de la Culture et de la Communication (‘CELF I’) [2008]). The aim of that system of prior control was therefore that only compatible aid might be implemented. In order to achieve that aim, the implementation of planned aid was to be deferred until the doubt as to its compatibility is resolved by the Commission’s final decision.

The Court held that the implementation of that system of control was a matter for both the Commission and the national courts, their respective roles being complementary but separate (see Case C-39/94 SFEI and Others [1996]; Joined Cases C-261/01 and C‑262/01 van Calster and Others [2003], and Case C-368/04 Transalpine Ölleitung in Österreich [2006] ). Whilst assessment of the compatibility of aid measures with the common market fell within the exclusive competence of the Commission, subject to review by the Courts of the European Union, it was for the national courts to ensure the safeguarding, until the final decision of the Commission, of the rights of individuals faced with a possible breach by State authorities of the prohibition laid down by Article 108(3) TFEU.

The Court stressed that national courts must offer to individuals the certain prospect that all the appropriate conclusions would be drawn from an infringement of the last sentence of Article 108(3) TFEU, in accordance with their national law, as regards the validity of measures giving effect to the aid, the recovery of financial support granted in disregard of that provision and possible interim measures.The objective of the national courts’ tasks was therefore to pronounce measures appropriate to remedy the unlawfulness of the implementation of the aid, in order that the aid did not remain at the free disposal of the recipient during the period remaining until the Commission made its decision (Case C-1/09 CELF and Ministre de la Culture et de la Communication [2010]).

The Court held that the initiation by the Commission of the formal examination procedure under Article 108(2) TFEU could not therefore release national courts from their duty to safeguard the rights of individuals faced with a possible breach of Article 108(3) TFEU. However, the scope of that obligation might vary, depending on whether or not the Commission had initiated the formal examination procedure with regard to the measure at issue in the proceedings before the national court. In a situation where the Commission had  not yet initiated the formal examination procedure and had therefore not yet given a decision as to whether the measures under consideration were capable of constituting State aid, the national courts, seised of a request that they should draw the appropriate conclusions from a possible infringement of the last sentence of Article 108(3) TFEU, might have cause to interpret and apply the concept of aid with a view to determining whether those measures should have been notified to the Commission. Thus it was for those courts to verify, inter alia, whether the measure at issue constituted an advantage and whether it was selective within the meaning of Article 107(1) TFEU.

The Court held that  where the Commission had initiated the formal examination procedure with regard to a measure which was being implemented, national courts were required to adopt all the necessary measures with a view to drawing the appropriate conclusions from an infringement of the obligation to suspend the implementation of that measure. To that end, national courts might decide to suspend the implementation of the measure in question and order the recovery of payments already made. They might also decide to order provisional measures in order to safeguard both the interests of the parties concerned and the effectiveness of the Commission’s decision to initiate the formal examination procedure. Where they entertained doubts as to whether the measure at issue constituted State aid within the meaning of Article 107(1) TFEU or as to the validity or interpretation of the decision to initiate the formal examination procedure, national courts might seek clarification from the Commission and, in accordance with the second and third paragraphs of Article 267 TFEU, as interpreted by the Court, they might or must refer a question to the Court for a preliminary ruling (see Case C-222/04 Cassa di Risparmio di Firenze and Others [2006]). 

Text of judgment