General Court of the EU annuls Commission decision on aid granted by Zweibrücken Airport to Germanwings

On 27 April 2017, the General Court of the EU partially annulled the European Commission decision of 1 October 2014 regarding State aid granted by Germany to Zweibrücken Airport and airlines using that airport, Germanwings, TUIFly and Ryanair/AMS.

As a reminder, in this case the European Commission held that the public financing of Zweibrücken Airport constituted illegal and incompatible State aid because this airport duplicated Saarbrücken Airport which is located nearby. It therefore ordered the recovery of the aid. Moreover, the European Commission concluded that the airport services contracts and marketing contracts concluded with Germanwings, TUIFly and Ryanair/AMS also contained State aid that had to be reimbursed by those airlines.

Germanwings lodged an annulment procedure against this decision before the General Court of the EU. The German airline refuted that the financing of marketing services concluded on 15 September 2006 qualified as State aid and it challenged the refusal of the Commission to grant access to the file documents.

Regarding the qualification of State aid, Germanwings argued that in its assessment of the private operator principle, the European Commission should not have included in the charges to be supported by Germanwings investments in the terminal of Zweibrücken Airport. The Commission stated that it took on board the information submitted in this regard by the German authorities.

The General Court agreed with the Germanwings position because it concluded that there were no factual elements that linked the investments in the terminal to the marketing services contract concluded with Germanwings.

Indeed, the General Court noted that the statement made by the German authorities according to which all the investment costs should be linked to Germanwings was general and abstract and was not founded on any tangible proof. In fact, the contract concluded with Germanwings did not contain any provision that compelled the airport to make those investments at the request of the airline. The position of the General Court concerns the modernization of the old terminal and the construction of the new terminal of the airport.

The General Court therefore annulled the Commission decision of 1 October 2014 concerning Germanwings.

The Commission will therefore have to assess again the contract concluded between Germanwings and Zweibrücken Airport in the light of the General Court position and should adopt a new decision following an updated economic analysis of the contract without any costs related to the investments. If the result of this economic analysis is positive, meaning that the contract between Germanwings and the airport was profitable for the airport, Germanwings will not have to reimburse any aid.

Concerning the request to access file documents, it has been rejected by the General Court in line with its strict jurisprudence on the access to documents in State aid cases.

By this judgment, the General Court of the EU continues to put great pressure on the Commission and its analysis of commercial contracts concluded between airports and airlines under the private operator principle.

Annabelle Lepièce, Partner, annabelle.lepiece@cms-db.com