Landmark ruling of the Court of Justice of the European Union on airport charges: Case C-379/18

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Professor Avv Anna Masutti
University of Bologna; R&P Legal Italy, Bologna
anna.masutti@unibo.it

The decision of the CJEU

On 21 November 2019, the Court of Justice of the European Union (CJEU) rendered a decision on airport charges, ruling on the competence of the Independent Supervisory Authorities (ISA) as referred to in EU Directive 2009/12.^[1]

The dispute originated when an air carrier, in its capacity as an airport user, contested the approval of a new system of airport charges for a German airport, managed by the Land of Berlin. The latter, as the ISA, had authorised a new system of airport charges with effect from 1 January 2015.

The air carrier had brought an action for annulment of the above-mentioned authorisation before the Higher Administrative Court, Berlin-Brandenburg, which declared the action inadmissible on the grounds that the air carrier lacked standing to bring proceedings for the purposes of the German code of administrative court procedure.

Based on an agreement between private parties (airport user and airport operator), the air carrier considers that Directive 2009/12 would not preclude the establishment of airport charges, other than those approved by the ISA under point (a) of the first sentence of Article 6(5) of that Directive.

When the air carrier brought the action before the Federal Administrative Court, two questions were referred to the CJEU for a preliminary ruling.

‘(1) Is a national provision which provides that the system of airport charges decided upon by the airport managing body must be submitted to the independent supervisory authority for approval, without prohibiting the airport managing body and the airport user from setting charges different from those approved by the supervisory authority, compatible with Directive [2009/12], in particular Article 3, Article 6(3) to (5) and Article 11(1) and (7) thereof?

(2) Is an interpretation of national law whereby an airport user is prevented from challenging the approval of the charging system by the independent supervisory authority, but can bring an action against the airport managing body and can plead in that action that the charges determined in the charging system are inequitable, compatible with the aforementioned directive?’^[2]

Emphasising the first question, the CJEU had to decide whether Directive 2009/12, in particular Article 3, Article 6(5)(a) and Article 11(1) and (7), must be interpreted as precluding a national provision (ie, German) allowing an airport managing body to determine, together with an airport user, airport charges different from those set by that body and approved by the ISA.

The decision rendered on 21 November 2019 by the CJEU states that the ISA’s decisions on airport charges must be considered binding.^[3]

Specifically, the CJEU established that a national provision, allowing an airport managing body to agree (with an airport user) airport charges different from those set by that body and approved by the relevant national ISA, violates Directive 2009/12, since it would undermine the principles of consultation, transparency and non-discrimination of airport users as set out by Directive 2009/12. If a national provision (in implementing the EU Directive) envisages a mandatory procedure – by virtue of which the system of airport charges has to be approved by an ISA – that procedure must be considered mandatory for all users.

Consequently, the ruling states that Directive 2009/12, namely Article 3, Article 6(5)(a) and Article 11(1) and (7): ‘must be interpreted as precluding a national provision that allows an airport managing body to determine, together with an airport user, airport charges different from those set by that body and approved by the independent supervisory authority, within the meaning of that directive’.

For the CJEU, Directive 2009/12 regulates both the essential features of airport charges and the way these are set, indicating the role and the powers of the ISA as the sole authority responsible for ensuring the correct application of the measures taken to comply with the Directive.

Why is the decision important for Italian system?

In order to analyse the importance of the above principles, it is necessary to summarise the peculiarity of the Italian law system which, in implementing the above-mentioned Directive, has granted some airports the possibility of derogating from airport charges, as determined and approved by the Italian ISA, Autorità di Regolazione dei Trasporti (ART).

Peculiarities of the Italian system

In 2009 the Italian legislator, aiming to boost the upgrade of airport system infrastructures (namely, in airports with traffic exceeding eight million passengers per year, ‘the Italian Main Airports’), introduced Article 17, paragraph 34-bis of Legislative Decree 2009/78, which provides for a more favourable derogation scheme to determine airport charges (the so-called ‘dual till’ model). The authority for the enforcement of such mechanism was ENAC (Italian Civil Aviation Authority), which implemented it by entering into a specific agreement, the so-called ‘Programme Contract’ (PrA), with the Italian Main Airports (Milan, Rome and Venice).

In 2012, pursuant to Directive 2009/12, the ART was established as ISA with the power to approve charging schemes and the level of airport charges. ART carries out economic regulation as well as supervisory tasks, approving the charges and including methods of multi-year pricing, which ensure annual inflation adjustments.^[4] Nevertheless, the previous system of Programme Contracts with ENAC exceptionally continued to apply to the Italian Main Airports.^[5]

Only in 2019 did the Italian legislator decide to intervene, conferring to ART ‘the functions of a national supervisory authority […] also with reference to the programme contracts set forth in Article 17, paragraph 34-bis’ of Legislative Decree 78/2009 (Article 10 of law 37/2019). This means that the Italian legislator decided to extend the ART’s competence also to the airports of Milan, Rome and Venice, which were originally excluded from the competence of the ART.^[6]

Thus, the determination of the airport charges’ pricing scheme should now be^[7] entrusted to ART (which is adopting charges models that are different from those applied in favour of the main Italian airports), repealing the 2009 legislation which envisaged special terms for the Italian Main Airports.

The airports of Rome, Milan and Venice are claiming the continuance of the more favourable dual-till system, applied to them in 2009. Although they do not seem to be against the attribution of the competence to ART, they apparently would like ART’s competence to be limited to the safeguard of the correct application of the measures adopted in accordance with Directive 2009/12, without playing a role in the determination of the airport charges models.

Indeed, the airport charges models that ART is currently proposing for all the Italian airports^[8] seem less favourable than the dual till model applied for the Italian Main Airports. ART appears to be oriented toward the hybrid till models, instead of the dual till.^[9]

The current role of ART in light of Italian law and Directive 2009/12/EC

The current Italian framework regulation, in reaffirming that ART is the sole Italian supervisory authority/ISA, adopts broad wording in conferring to ART competence on airport charges. This is because when, in 2019, the Italian legislator entrusted ART with the functions of national ISA (also with regard to the so-called derogating contracts for the Italian Main Airports) ART had been entrusted with the following functions, as provided by the law: economic regulation of airport charges and the power to draft pricing models (Article 71, paragraphs 2 and 3, Legislative Decree 1/2012 as converted into Law 27/2012).^[10]

While Directive 2009/12 envisages that the national ISA must exercise – at least – the tasks assigned under Article 6, the implementing Italian law, in giving ART broader competences than those envisaged in the Directive, assigns ART also the duty to draft ‘pricing models’ (Article 71, paragraph 3 and Article 78). These ‘pricing models’ are deemed to be binding in light of Article 11(7) of Directive 2009/12, which provides that the decisions of the ISA have binding effect.

Therefore, ART’s functions are both regulatory – since it operates as a national ISA (Article 36, para 2) in the drafting of ‘pricing models’ – and administrative, which includes supervisory tasks and sanctioning powers (Article 36, para 2).

Among the reasons behind the 2019 legislative reform, there is the acknowledgement that there was no longer the need to incentivise the growth of the national airport system. The derogating rules established a temporary mechanism (dual till) in order to support the improvement of the Italian Main Airports infrastructures, so as to align them with the European standards. This is a target that now appears to be achieved.

Final remarks

The CJEU judgement is clear in establishing that the airport authorities cannot depart from the system of airport charges as approved by a national ISA empowered by law to establish a mandatory procedure for the determination or approval of airport charges, pursuant to Article 6, paragraph 5, letter (a) of Directive 2009/12.^[11]

It is worth highlighting that the Italian derogating rule of 2009,^[12] assuming it is still in force, would be considered to be in breach of EU law. Indeed, if an airport managing body was allowed to determine – via the derogating scheme introduced by the 2009 law – airport charges using pricing models not previously approved by the ART, it would not comply with the ‘mandatory procedure’ pursuant to Directive 2009/12, as per the CJEU’s ruling. Moreover, such a rule would favour only a few users, thus infringing the principles of non-discrimination and transparency set forth in Articles 3 and 7 of the Directive.^[13]

Finally, regarding the incentives and marketing support paid by airports and/or local authorities to airlines, the fact that ART is the competent authority for airport charges does not mean that it prevents these commercial practices envisaged by the EU. This circumstance was confirmed by the ART in its recent hearing at the Italian Parliament.^[14] ART, in considering these commercial agreements, made reference to its models and general principles of transparency, accounting for separation and non-discrimination in applying these.

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