Judgment of the General Court (Tenth Chamber) of 18 October 2023

1. Action for annulmentNatural or legal personsMeasures of direct and individual concern to themCommission decision finding State aid compatible with the internal market without opening the formal investigation procedureAction by parties concerned within the meaning of Article 108(2) TFEUAction designed to safeguard the procedural rights of the parties concernedAdmissibility

(Arts 108(2) and 263, fourth para., TFEU; Council Regulation No 2015/1589, Art. 1(h))

(see paragraph 15)

2. Action for annulmentNatural or legal personsMeasures of direct and individual concern to themIndividual concernCriteriaCommission decision finding aid compatible with the internal marketAction of a competing undertaking claiming that its market position is significantly affectedAdmissibilityObligation for the competing undertaking to provide a precise definition of the market at issue and to compare the situation of all the competitors present on that market in order to differentiate itself in relation to themNoneProof that the competing undertaking’s position on the market in question is significantly affected

(Arts 108(2) and (3) and 263, fourth para., TFEU)

(see paragraphs 16-37)

3. Action for annulmentNatural or legal personsMeasures of direct and individual concern to themDirect concernCriteriaCommission decision finding aid compatible with the internal marketAction brought by an undertaking which is a competitor of the undertaking in receipt of aidCompeting undertaking proving direct concern

(Art. 263, fourth para., TFEU)

(see paragraph 38)

4. Aid granted by a Member StateProhibitionDerogationsAid capable of being regarded as compatible with the internal marketAid intended to remedy a serious disturbance in the economy of a Member StateAssessmentAid measure in favour of an airline important for the national economy in the context of the COVID-19 pandemicAssessment in the light of the Commission Communication on the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreakAid measure consisting in a recapitalisation of the airlineMeasure necessary to remedy a serious disturbance in the national economy

(Art. 107(3)(b) TFEU)

(see paragraphs 49-53, 56-58)

5. Aid granted by a Member StateProhibitionDerogationsAid capable of being regarded as compatible with the internal marketAssessment in the light of Article 107(3)(b) TFEUTaking into account previous practicePrecluded

(Art. 107(3)(b) TFEU)

(see paragraphs 54, 55)

6. Aid granted by a Member StateProhibitionDerogationsAid capable of being regarded as compatible with the internal marketAid intended to remedy a serious disturbance in the economy of a Member StateAssessmentAid measure in favour of an airline important for the national economy in the context of the COVID-19 pandemicAssessment in the light of the Commission Communication on the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreakAid measure consisting in a recapitalisation of the airlineRisk of insolvency of the airline without the recapitalisation measureNo error of assessment

(Art. 107(3)(b) TFEU; Commission Communication 2020/C 91/01 I/01, point (49)(a))

(see paragraphs 71-73)

7. Aid granted by a Member StateProhibitionDerogationsAid capable of being regarded as compatible with the internal marketAid intended to remedy a serious disturbance in the economy of a Member StateAssessmentAid measure in favour of an airline important for the national economy in the context of the COVID-19 pandemicAssessment in the light of the Commission Communication on the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreakAid measure consisting in a recapitalisation of the airlineSystemic importance of the recipient company for the economy of the country concernedNo error of assessment

(Art. 107(3)(b) TFEU; Commission Communication 2020/C 91 I/01, point (49))

(see paragraphs 74-92)

8. Aid granted by a Member StateProhibitionDerogationsAid capable of being regarded as compatible with the internal marketAid intended to remedy a serious disturbance in the economy of a Member StateAssessmentAid measure in favour of an airline important for the national economy in the context of the COVID-19 pandemicAssessment in the light of the Commission Communication on the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreakAid measure consisting in a recapitalisation of the airlineInability of the airline to obtain financing on the market for all of its needs on affordable termsNo error of assessment

(Art. 107(3)(b) TFEU; Commission Communication 2020/C 91 I/01, point (49)(c))

(see paragraphs 93-111)

9. Aid granted by a Member StateProhibitionDerogationsAid capable of being regarded as compatible with the internal marketAid intended to remedy a serious disturbance in the economy of a Member StateAssessmentAid measure in favour of an airline important for the national economy in the context of the COVID-19 pandemicAssessment in the light of the Commission Communication on the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreakAid measure consisting in a recapitalisation of the airlineMeasure including a mechanism aimed at incentivising gradual redemption of the capital receivedNo error of assessment

(Art. 107(3)(b) TFEU; Commission Communication 2020/C 91 I/01, points (56), (61), (79) and (80))

(see paragraphs 123-143)

10. Aid granted by a Member StateProhibitionDerogationsAid capable of being regarded as compatible with the internal marketAid intended to remedy a serious disturbance in the economy of a Member StateAssessmentAid measure in favour of an airline important for the national economy in the context of the COVID-19 pandemicAssessment in the light of the Commission Communication on the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreakAid measure consisting in a recapitalisation of the airlineConditions for presenting a restructuring planBreach of principle of proportionalityNone

(Art. 107(3)(b) TFEU; Commission Communication 2020/C 91 I/01, point (85))

(see paragraphs 149-154, 156)

11. Aid granted by a Member StateProhibitionDerogationsAid capable of being regarded as compatible with the internal marketAssessment in the light of Article 107(3)(b) TFEUCriteriaWeighing the beneficial effects of the aid against its adverse effects on trading conditions and the maintenance of undistorted competitionNot a necessary criterion

(Art. 107(3) TFEU)

(see paragraphs 162-167)

12. Aid granted by a Member StateProhibitionDerogationsAid capable of being regarded as compatible with the internal marketAid intended to remedy a serious disturbance in the economy of a Member StateAssessmentAid measure in favour of an airline important for the national economy in the context of the COVID-19 pandemicAssessment in the light of the Commission Communication on the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreakAid measure consisting in a recapitalisation of the airlineAssessment of whether the airline has significant market power on the market in questionDefinition of those markets using the airport-by-airport approachWhether permissible

(Art. 107(3)(b) TFEU; Commission Communication 2020/C 91 I/01, point (72))

(see paragraphs 191-203)

13. Aid granted by a Member StateProhibitionDerogationsAid capable of being regarded as compatible with the internal marketAid intended to remedy a serious disturbance in the economy of a Member StateAssessmentAid measure in favour of an airline important for the national economy in the context of the COVID-19 pandemicAssessment in the light of the Commission Communication on the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreakAid measure consisting in a recapitalisation of the airlineAssessment of whether the airline has significant market power on the market in questionNo error of assessment

(Art. 107(3)(b) TFEU; Commission Communication 2020/C 91 I/01, point (72))

(see paragraphs 212-237)

14. Aid granted by a Member StateProhibitionDerogationsAid capable of being regarded as compatible with the internal marketAid intended to remedy a serious disturbance in the economy of a Member StateRecapitalisation of an airline in order to compensate it in the context of the COVID-19 pandemicAid compatible with the internal market under Article 107(3)(b) TFEUAssessment of compatibility with the principle of non-discriminationCriteriaObjective of the aidNeed for the aidProportionality of the aid

(Art. 107(3)(b) TFEU)

(see paragraphs 244-262)

15. Aid granted by a Member StateProhibitionDerogationsAid capable of being regarded as compatible with the internal marketAid intended to remedy a serious disturbance in the economy of a Member StateAssessmentAid measure in favour of an airline important for the national economy in the context of the COVID-19 pandemicAid compatible with the internal market under Article 107(3)(b) TFEUInfringement of the freedom to provide services and the freedom of establishmentNone

(Arts 49, 58(1), 100(2) and 107(3)(b) TFEU)

(see paragraphs 267-272)

16. Aid granted by a Member StatePlanned aidExamination by the CommissionPreliminary review and main reviewCompatibility of aid with the internal marketDifficulties of assessmentCommission’s duty to initiate the main review procedureSerious difficultiesConceptObjective natureCircumstances enabling the existence of such difficulties to be establishedJudicial reviewScope

(Arts 107 and 108(2) and (3) TFEU; Council Regulation No 2015/1589, Art. 4(3) and (4))

(see paragraphs 276-280)

17. Aid granted by a Member StateCommission decision not to raise objections to an aid schemeObligation to state reasonsScopeAccount taken of the context and all the legal rules governing the matter

(Arts 107(3)(b) and 296 TFEU)

(see paragraphs 284-292)

Operative part

The Court:

1. Dismisses the action.

2. Orders Ryanair DAC to bear its own costs and to pay those incurred by the European Commission and Air Baltic Corporation AS.

3. Orders the Republic of Latvia to bear its own costs.