# C_2007211EN.01005401.xml

| 8.9.2007 | EN | Official Journal of the European Union | C 211/54 |
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8.9.2007

EN

Official Journal of the European Union

C 211/54

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Action brought on 9 July 2007 — Air One SpA v Commission

(Case T-266/07)

(2007/C 211/101)

Language of the case: Italian

Parties

Applicant: Air One SpA (represented by: M. Merola and P. Ziotti, lawyers)

Applicant:

Defendant: Commission of the European Communities

Defendant:

Form of order sought

| — | Annul Commission Decision C (2007 1712) of 23 April 2007 on public service obligations on certain routes to and from Sardinia, to the extent that it requires the Italian Government to allow all air carriers who accept the relevant public service obligations (PSO) to operate routes between Sardinia and the mainland, irrespective of whether their acceptance is made before or after expiry of the period of 30 days laid down in the national legislation (Article 1(a) of that Decision); |
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Annul Commission Decision C (2007 1712) of 23 April 2007 on public service obligations on certain routes to and from Sardinia, to the extent that it requires the Italian Government to allow all air carriers who accept the relevant public service obligations (PSO) to operate routes between Sardinia and the mainland, irrespective of whether their acceptance is made before or after expiry of the period of 30 days laid down in the national legislation (Article 1(a) of that Decision);

| — | Order the Commission to pay the costs of the proceedings. |
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Order the Commission to pay the costs of the proceedings.

Pleas in law and main arguments

The applicant requests, under the fourth paragraph of Article 230 EC, the annulment of Article 1(a) of Commission Decision C (2007 1712) of 23 April 2007 on public service obligations on certain routes to and from Sardinia, under Article 4 of Council Regulation No 2408/92 on access for Community air carriers to intra-Community air routes.

In support of its action, the applicant submits the following pleas in law:

| — | Manifest error of appreciation and illogical and contradictory statement of reasons. The applicant submits first of all that the Commission — by requiring the Italian Government to allow all air carriers who intend to respect the PSO to operate the routes in question, regardless of the period in which they notified their intention to commence service provision and whether or not notification was sent during or after the 30-day period set in the Decrees — has erred in its assessment of the scheme introduced by the Italian Government in the light of the reasoning and objectives of the relevant Community rules. In particular the applicant claims that Article 4 of Regulation No 2408/92 obliges Member States to achieve the objective of territorial continuity by means of the imposition of public service obligations which, although they represent an exception to the principle of free access for Community carriers to intra-community routes, nonetheless respect the principle of proportionality and therefore restrict as far as possible the concession of exclusive rights and/or financial compensation. In the applicant's opinion, the Italian Government has fully complied with the spirit of the Community legislation, given that setting a mandatory period for the ‘first phase’ of the procedure of imposing public service obligations:






  — | encourages the submission of offers from carriers and the allocation by the State of the relevant public service obligations in the course of that ‘first phase’, and |
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Manifest error of appreciation and illogical and contradictory statement of reasons. The applicant submits first of all that the Commission — by requiring the Italian Government to allow all air carriers who intend to respect the PSO to operate the routes in question, regardless of the period in which they notified their intention to commence service provision and whether or not notification was sent during or after the 30-day period set in the Decrees — has erred in its assessment of the scheme introduced by the Italian Government in the light of the reasoning and objectives of the relevant Community rules. In particular the applicant claims that Article 4 of Regulation No 2408/92 obliges Member States to achieve the objective of territorial continuity by means of the imposition of public service obligations which, although they represent an exception to the principle of free access for Community carriers to intra-community routes, nonetheless respect the principle of proportionality and therefore restrict as far as possible the concession of exclusive rights and/or financial compensation. In the applicant's opinion, the Italian Government has fully complied with the spirit of the Community legislation, given that setting a mandatory period for the ‘first phase’ of the procedure of imposing public service obligations:

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encourages the submission of offers from carriers and the allocation by the State of the relevant public service obligations in the course of that ‘first phase’, and

| — | restricts the possibility of passing to the ‘second phase’ in which the Government would be obliged to grant, by means of invitation to tender, exclusive rights, with the possibility of taking responsibility for the relevant financial compensation. |
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restricts the possibility of passing to the ‘second phase’ in which the Government would be obliged to grant, by means of invitation to tender, exclusive rights, with the possibility of taking responsibility for the relevant financial compensation.

| — | It is moreover obvious — notwithstanding what is implicitly claimed by the Commission — that competition between air carriers on routes burdened by public service obligations cannot be carried on in the same way as that found on routes free of such obligations. In as much as PSO schemes presuppose that problems of profitability are a feature of the routes in question, to the extent that no carrier would choose to operate such routes, in a manner which met the public interest, in normal market conditions: it is therefore necessary to introduce safeguard mechanisms for law-abiding and diligent carriers. |
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It is moreover obvious — notwithstanding what is implicitly claimed by the Commission — that competition between air carriers on routes burdened by public service obligations cannot be carried on in the same way as that found on routes free of such obligations. In as much as PSO schemes presuppose that problems of profitability are a feature of the routes in question, to the extent that no carrier would choose to operate such routes, in a manner which met the public interest, in normal market conditions: it is therefore necessary to introduce safeguard mechanisms for law-abiding and diligent carriers.

| — | The applicant claims further that the regulatory framework prescribed by the Commission is discriminatory, since the elimination of the mandatory period for acceptance of public service obligations in the ‘first phase’ is to the advantage principally of carriers which have significant market power, allowing them to offer for the PSO routes after expiry of the period, when competitors have submitted offers, with the primary objective of taking market share from those competitors. |
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The applicant claims further that the regulatory framework prescribed by the Commission is discriminatory, since the elimination of the mandatory period for acceptance of public service obligations in the ‘first phase’ is to the advantage principally of carriers which have significant market power, allowing them to offer for the PSO routes after expiry of the period, when competitors have submitted offers, with the primary objective of taking market share from those competitors.

| — | Lastly, in the applicant's opinion, the Commission's reasoning is vitiated by an error of law relating to the characteristics of the procedure of imposing public service obligations. In that respect, the applicant submits that application of a non-mandatory term would have the effect of prolonging indefinitely the ‘first phase’ of the procedure, which is illogical, and inconsistent with the declaration of the Commission itself to the effect that the procedure for imposition of public service obligations, while unitary, consists of two phases. |
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Lastly, in the applicant's opinion, the Commission's reasoning is vitiated by an error of law relating to the characteristics of the procedure of imposing public service obligations. In that respect, the applicant submits that application of a non-mandatory term would have the effect of prolonging indefinitely the ‘first phase’ of the procedure, which is illogical, and inconsistent with the declaration of the Commission itself to the effect that the procedure for imposition of public service obligations, while unitary, consists of two phases.

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