In April 2020 Denmark and Sweden notified the Commission of two separate aid measures for SAS AB, each involving a guarantee on a revolving credit facility of up to 1.5 billion Swedish kronor (SEK). Those measures were intended to compensate SAS in part for the damage resulting from the cancellation or rescheduling of its flights after the imposition of travel restrictions amid the Covid-19 pandemic.
Those measures were intended to compensate SAS in part for the damage resulting from the cancellation or rescheduling of its flights after the imposition of travel restrictions amid the Covid-19 pandemic.
By decisions of 15 April 2020 2 and of 24 April 2020, 3 the Commission classified the notified measures as State aid 4 that was compatible with the internal market pursuant to Article 107(2)(b) TFEU. In accordance with that provision, aid to make good the damage caused by natural disasters or exceptional occurrences is to be compatible with the internal market.
The airline Ryanair brought actions for annulment of those decisions, which are, however, dismissed by the Tenth Chamber (Extended Composition) of the General Court of the European Union. In that respect, the General Court confirms for the first time the legality of individual aid measures adopted in order to address the consequences of the Covid-19 pandemic in the light of Article 107( 2)(b) TFEU.
Given that SAS’s market share is much higher than that of its closest competitor in those two Member States, the aid does not amount to unlawful discrimination
The General Court’s assessment
In the first place, the General Court rejects the plea that the aid that has been granted is incompatible with the internal market because it is intended to make good the damage suffered by only one company. In that regard, the General Court notes that in accordance with Article 107(2)(b) TFEU aid may be intended to make good the damage caused by an exceptional occurrence even if it benefits only an individual company, without making good the entirety of the damage caused by that occurrence.
Consequently, the Commission had not erred in law solely because the aid measures for SAS did not benefit all of the victims of the damage caused by the Covid-19 pandemic.
In the second place, the General Court rejects Ryanair’s plea disputing the proportionality of the aid measures in relation to the damage caused to SAS by the Covid-19 pandemic. The General Court notes, first of all, that Article 107(2)(b) TFEU allows compensation only for economic damage caused by natural disasters or exceptional occurrences. However, given the evolving nature of the pandemic and the fact that the quantification of the damage caused by it to SAS is necessarily prospective in nature, the Commission had set out in sufficiently precise terms a calculation method for assessing that damage, which was capable of avoiding the risk of possible overcompensation.
In the third place, the General Court rejects the plea claiming a breach of the principle of non-discrimination. Individual aid, by its nature, brings about a difference in treatment, or even discrimination, which is inherent in the individual character of that measure. To argue that such aid is contrary to the principle of non-discrimination would therefore amount to calling into question systematically the compatibility of any individual aid with the internal market, whereas EU law allows Member States to grant such aid, provided that all the conditions laid down in Article 107 TFEU are met.
In the fourth place, the General Court examines the Commission’s decisions in the light of the free provision of services and the freedom of establishment. In that context, the General Court notes that Ryanair does not demonstrate how the exclusivity of the measure is capable of discouraging it from establishing itself in Denmark or Sweden or providing services from either of those countries or to them.
As regards Case T-379/20, the General Court finds, in addition, that the aid measure notified by Sweden is subsidiary to the Swedish aid scheme adopted under Article 107(3)(b) TFEU in order to deal with the disturbance in the Swedish economy caused by the Covid-19 pandemic.
Lastly, the General Court rejects as unfounded the pleas claiming an infringement of the duty to state reasons and finds that it is not necessary to examine the substance of the plea alleging an infringement of the procedural rights under Article 108(2) TFEU.
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