EN Official Journal of the European Union L 201/109

COMMISSION DECISION (EU) 2015/1227

of 23 July 2014

on State aid SA.22614 (C 53/07) implemented by France in favour of the Chamber of Commerce and Industry of Pau-Béarn, Ryanair, Airport Marketing Services and Transavia

(notified under document C(2014) 5085)

(Only the French text is authentic)

(Text with EEA relevance)

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union, and in particular the first subparagraph of Article 108(2) thereof (1),

Having regard to the Agreement on the European Economic Area, and in particular Article 62(1)(a) thereof,

Having called on interested parties to submit their comments pursuant to those Articles (2) and having regard to their comments,

Whereas:

1. PROCEDURE

(1) By letter of 25 January 2007, the French authorities notified the Commission, pursuant to Article 108(3) of the Treaty on the Functioning of the European Union (hereinafter ‘TFEU’), of a measure benefiting the company Airport Marketing Services Limited (‘AMS’) — a wholly-owned subsidiary of the airline Ryanair Limited (hereinafter ‘Ryanair’) — in the form of a marketing services agreement signed with the latter. This measure was notified as State aid by the French authorities. As the measure had already been implemented by the French authorities, it was recorded by the Commission in the register of unlawful aid under number NN 12/07.

(2) At the request of the French authorities, meetings were organised with the Commission on 20 February and 16 July 2007.

(3) By letter of 26 February 2007, the Commission asked the French authorities to provide further information. As no response was received within the set time limit, a reminder was sent to the French authorities on 15 June 2007. By letter of 12 July 2007, the French authorities provided the information requested.

(4) By letter of 28 November 2007, the Commission notified the French authorities of its decision to open the formal investigation procedure laid down in Article 108(2) TFEU.

(5) The Commission decision to open the procedure was published in the Official Journal of the European Union on 15 February 2008 (3). The Commission called on interested parties to submit their comments on the measure in question.

(6) On 18 December 2007 and 29 January 2008, the French authorities asked for an extension to the time limit set for submitting their comments on the opening decision. By letters of 4 January and 1 February 2008, the Commission agreed to extend the time limit to 28 February 2008.

(7) The French authorities’ comments were submitted to the Commission on 2 June 2008.

(8) The Commission received comments from the Chamber of Commerce and Industry of Pau-Béarn (hereinafter ‘the CCIPB’) on 25 February 2008 (4), from AMS (5), Ryanair and the Association of European Airlines (hereinafter ‘the AEA’) by letters of 14 March 2008, and from the airline Air France on 19 March 2008 (6). The Commission forwarded these comments to France by letter of 11 June 2008 and gave it the opportunity to respond to them.

(9) By letter of 7 July 2008, the French authorities informed the Commission that they had no response to make to the comments by third parties.

(10) At the request of the French authorities, a meeting was held on 4 November 2008 between the Commission and representatives of the CCIPB. During the meeting, the Commission informed the French authorities that it had engaged an independent consultant to help it analyse the agreements in question (hereinafter ‘the consultant’). The consultant delivered his report on 30 March 2011.

(11) By letter of 17 March 2011, the Commission asked the French authorities to provide further information. By letter of 13 April 2011, the French authorities asked for the time limit to be extended to 1 June 2011. The Commission agreed to this extension by letter of 6 May 2011. The French authorities gave their response by letter of 30 May 2011.

(12) By letter of 11 April 2011, the Commission asked Ryanair for supplementary information, which it provided by letter of 31 August 2011. By letter of 11 October 2011, the Commission forwarded these comments to France for its response. By letter of 21 November 2011, the French authorities informed the Commission that they had no response to make to these comments.

(13) By letter of 25 January 2012, the Commission notified France of its decision to extend the formal investigation procedure opened in 2007 to various measures granted to airlines using Pau airport and to the airport operator. The Commission decision was published in the Official Journal of the European Union on 31 March 2012 (7). The Commission called on interested parties to submit their comments on the measures in question.

(14) By letter of 22 February 2012, the Commission asked the French authorities to provide further information. On 28 February 2012 the French authorities asked for an extension to the time limit set for submitting their comments on the decision of 25 January 2012 and to the time limit set in the Commission’s letter of 22 February 2012. The Commission agreed to extend these time limits to 27 March 2012. By letter of 29 March 2012, the French authorities gave their response to the Commission’s letter of 22 February 2012 and submitted their comments on the decision to extend the procedure.

(15) In relation to the extension of the procedure, the Commission received comments from the CCIPB on 30 April 2012 (8), from AMS on 30 April 2012 (9), and from Ryanair on 30 April 2012 (10). By letter of 31 May 2012, the Commission forwarded these comments to France for its response. By letter of 13 June 2012, France indicated that it had no response to make.

(16) By letter of 26 April 2012, the Commission asked the French authorities to provide further information. The French authorities gave their response by letter of 10 May 2012.

(17) By letter of 10 April 2013, Ryanair forwarded to the Commission two notes prepared by the company Oxera and an analysis prepared by Professor Damien P. McLoughlin. By letter of 3 May 2013, the Commission forwarded these documents to the French authorities for their response. By letter of 7 June 2013, France indicated that it had no response to make.

(18) By letter of 14 November 2013, the Commission asked France to provide further information.

(19) By letter of 16 December 2013, the Commission forwarded the consultant’s report to the French authorities for their response. France did not respond within the set time limit.

(20) On 19 December 2013 France asked for an extension to the time limit set for responding to the information request of 14 November 2013. The Commission agreed to extend the time limit to 23 January 2014. As no response was received within this time limit, the Commission sent a reminder to France by letter of 24 January 2014 and allowed it a further period of 10 working days. France gave its response by letter of 6 February 2014.

(21) The Commission received comments from Ryanair on 20 December 2013, 17 January 2014 and 31 January 2014. These additional comments were forwarded by letter to France on, respectively, 9 January 2014, 23 January 2014 and 4 February 2014. In its letters of 29 January 2014, 3 February 2014 and 21 May 2014, France informed the Commission that it had no response to make.

(22) On 24 February, 13 March and 19 March 2014, following the adoption of the Guidelines on State aid to airports and airlines (11) (hereinafter ‘the new Guidelines’), the Commission called on France and the interested parties to submit their comments on the application of the new Guidelines to this case. France submitted comments on 19 March 2014.

(23) In addition, on 15 April 2014 a notice was published in the Official Journal of the European Union (12) inviting Member States and interested parties to submit their comments, including in this case, in the light of the entry into force of the new Guidelines. Air France, the non-governmental organisation Transport & Environment and the CCIPB submitted comments within the set time limit. By letter of 28 May 2014, the Commission forwarded these comments to the French authorities. In its letter of 6 June 2014, France informed the Commission that it had no response to make.

(24) By letter of 27 February 2014, the Commission asked France to provide further information. On 17 March 2014 France asked for an extension to the time limit set for responding to the information request of 27 February 2014. The Commission agreed to extend the time limit to 27 April 2014. France gave its response by letter of 25 April 2014 (13).

(25) By letter of 16 May 2014, the Commission asked France for further information, which it provided by letter of 6 June 2014.

2. GENERAL INFORMATION ON THE AIRPORT

(26) As indicated in the decision opening the formal investigation procedure, Pau-Pyrénées airport (hereinafter ‘Pau airport’) is situated in the department of Pyrénées-Atlantiques, within the Aquitaine region.

(27) The airport was initially owned by the State, which entrusted its operation to the CCIPB through a public equipment concession granted until 31 December 2015 by an Interministerial Order of 12 March 1965 (hereinafter ‘the 1965 Order’), to which terms and conditions defining, in particular, the respective obligations of the State and the CCIPB are annexed. The interministerial order and the terms and conditions of the concession have been amended on four subsequent occasions.

(28) The CCIPB is a member of the network of chambers of commerce and industry. In France, the chambers of commerce and industry are public administrative bodies. In essence, a chamber of commerce and industry represents the general interests of commerce, industry and services within its area. The tasks and powers of the chambers of commerce and industry are laid down by law. These chambers are subject to the administrative and financial scrutiny of the State, through the Minister for Finance and Infrastructure and the Minister for Planning and Local Administration, each acting within his area of responsibility. According to Article R.712-2 of the Commercial Code, ‘regional chambers of commerce and industry and local chambers of commerce and industry shall be supervised by the regional prefect, assisted by the regional public finance officer.’ The supervisory authority must therefore be informed of certain important decisions specified in the regulations (regarding, for example, budget, recourse to borrowing, granting of guarantees to third parties, transfers, acquisitions or extensions of financial holdings in civil or commercial companies, etc.). Such acts may be implemented only after having been notified to the supervisory authority, which may object to them. The chambers of commerce and industry are managed by an elected assembly of representatives from undertakings within their area.

(29) Specific accounts are kept for Pau airport, which are separate from the general accounts of the CCIPB.

(30) On 1 January 2007, pursuant to Article 28 of Act No 2004-809 of 13 August 2004 on local freedoms and responsibilities, the State transferred ownership of the airport to a group of local authorities known as the syndicat mixte de l’aéroport Pau-Pyrénées (hereinafter the ‘syndicat mixte’). The Regional Council of Aquitaine, the Departmental Council of Pyrénées-Atlantiques, the Urban Community of Pau Porte des Pyrénées, and 14 municipal groups are members of this syndicat mixte. An agreement was signed to this end between the State and the syndicat mixte, which entered into force on 1 March 2007. This agreement was amended on 12 August 2009.

(31) On becoming the owner of the airport, the syndicat mixte replaced the State as concession authority. Pursuant to Article 28-VI-2o of the aforementioned Act of 13 August 2004, it took over the previous agreements, and in particular the concession agreement signed with the CCIPB. The CCIPB was therefore the airport operator before ownership was transferred to the syndicat mixte, and has remained so since.

(32) The airport handles both civil and military aircraft. The following table shows the total number of inbound and outbound passengers having used the airport over the 2000-2013 period. Table 1 Traffic at Pau airport (number of passengers) over the 2000-2013 period Year Total 2000 6 13 333 2001 6 00 084 2002 5 85 410 2003 6 82 428 2004 7 20 588 2005 7 29 409 2006 7 63 942 2007 7 63 018 2008 8 17 511 2009 6 91 037 2010 6 73 697 2011 6 41 496 2012 6 09 535 2013 6 45 577 Source: Information provided by France and the CCIPB website.

(33) Ryanair began operating at Pau airport in April 2003. During the period under review (2003 to 2011), Ryanair operated routes to London, Charleroi, Bristol and Beauvais.

(34) In 2010 Ryanair’s flights accounted for approximately 16 % of the airport’s passengers. Ryanair stopped flying to Pau when its contractual commitments to the airport expired on 1 April 2011.

(35) Aside from Ryanair, the main commercial airline using Pau airport is Air France. It operates most of the flights from Pau and accounts for the bulk of the traffic at this airport (approximately 80 % of passengers).

(36) Other airlines have used the airport during the period under review, in particular Transavia CV (hereinafter ‘Transavia’), which is a subsidiary of the Air France KLM group.

3. MEASURES COVERED BY THE DECISION OPENING THE FORMAL INVESTIGATION PROCEDURE AND THE CONSULTANT’S REPORT

(37) The measures covered by the decision opening the formal investigation procedure particularly related to the operation of the route between Pau airport and London Stansted airport. The first measure was the marketing services agreement signed by the CCIPB with AMS in 2005, and the second measure was the airport services agreement signed by the CCIPB with Ryanair on the same date. These two agreements (hereinafter ‘the 2005 agreements’) were signed on 30 June 2005 for a term of 5 years, with the possibility of extension for a further 5 years.

3.1. 2005 AGREEMENTS SIGNED WITH AMS AND RYANAIR

3.1.1. MARKETING SERVICES AGREEMENT SIGNED WITH AMS FOR THE PAU-LONDON STANSTED ROUTE

(38) AMS is a Ryanair subsidiary that has an exclusive licence to offer marketing services on the Ryanair website www.ryanair.com. The web marketing services agreement signed with AMS (hereinafter ‘the 2005 marketing services agreement’), notified by France, states that ‘This Agreement is rooted in Ryanair’s commitment to operate on a daily basis a route between Pau and London Stansted’ (Article 1). The purpose of the marketing services agreement is to ‘determine the conditions under which Airport Marketing Services will provide CCIPB with specific marketing services intended to promote the various tourist and business attractions in the Pau/Bearn region’. The agreement stipulates that ‘The primary tool for the provision of marketing services under this Agreement is the website www.ryanair.com which allows for direct targeting of the potential passengers of the low fares airline Ryanair’ (Article 1.1).

(39) The 2005 marketing services agreement defines how AMS is to provide certain advertising services on Ryanair’s website (14). This package of services involves: — ‘suitable space on the Pau destination page of www.ryanair.com for 5 (five) 150 word paragraphs within the Airport Marketing Services Top Five Things To Do section (cost of one paragraph per year as per the rate card: EUR 20 000)’, — ‘suitable space in the right hand bar on the Pau destination page of www.ryanair.com for the presence of 1 (one) link to the website designated by CCIPB (cost of one link per year as per the rate card: EUR 15 000)’, — ‘suitable space below the Top Five Things To Do section on the Pau destination page of www.ryanair.com for 7 (seven) links to the websites designated by CCIPB (cost of one link per year as per the rate card: EUR 10 000)’, — ‘45 (forty five) days per year of the presence of a link to the website designated by CCIPB on the English homepage of www.ryanair.com (cost per day as per the rate card: EUR 6 000)’ (Article 3).

(40) On the basis of this agreement, the CCIPB undertook to pay EUR 4 37 000 per year to AMS throughout the term of the agreement.

3.1.2. AIRPORT SERVICES AGREEMENT SIGNED WITH RYANAIR FOR THE PAU-LONDON STANSTED ROUTE

(41) The airport services agreement (hereinafter ‘the 2005 airport services agreement’) signed with Ryanair sets out how the infrastructure of Pau airport is to be made available to the carrier, particularly with regard to groundhandling services and the provision of private premises. This agreement concerns the London Stansted-Pau route launched in April 2003. It replaces the initial agreement signed on 28 January 2003, which was declared void by Pau Administrative Court on 3 May 2005.

(42) The purpose of this agreement is to ‘determine both the operational and financial conditions under which Ryanair will establish and operate international commercial flights to and from the Airport. Moreover, this Agreement sets forth conditions of landing, groundhandling and other services offered by the Airport to Ryanair’ (Articles 1.1 and 1.2).

(43) According to Article 4 of the 2005 airport services agreement, Ryanair will operate daily scheduled air services on the London-Pau route and will pay the airport the charges as detailed in Articles 7.1 (regulated aeronautical charges) and 7.2 (non-regulated aeronautical charges).

3.2. CONSULTANT’S REPORT

(44) In his report, the consultant particularly examined the nature of marketing services and the details of airport services covered by agreements signed by the CCIPB with airlines, and in particular the 2005 agreements that it signed with Ryanair and AMS (15).

3.2.1. MARKETING SERVICES AGREEMENTS SIGNED WITH RYANAIR AND AMS

(45) The consultant summarised all the marketing services agreements for Pau airport that were signed by the CCIPB with Ryanair and AMS between 2003 and 2008. Among these, only the 2005 agreements were covered by the opening decision.

(46) In particular, the consultant carried out the following tasks. — He checked to what degree the rates laid down in the marketing services agreements were consistent with the online rates published on the AMS website (http://airportmarketingservices.com/pdfs/ratecard.pdf). According to the consultant, the rates listed on the AMS website are consistent with the rates set in the 2005 marketing services agreement. — He analysed the correlation between the amounts invoiced by AMS and Ryanair’s level of activity at Pau. According to the consultant, the charges for marketing services seem to develop in line with the number of flights operated. — He compared the services provided by AMS to the CCIPB with other web marketing services commonly offered in similar ways.

(47) The consultant questioned whether it was in the interests of the CCIPB to sign an agreement for the purchase of such marketing services for the following reasons. Firstly, the Ryanair website is essentially a ticket sale website, and not a general travel sale website. According to the consultant, the Ryanair website therefore primarily seems to be comparable to the websites of other airlines that generally host only a limited amount of paid advertising, with airports not featuring among the advertisers. Secondly, the consultant notes that airports are not comparable to other potential advertisers on the websites of airlines such as Ryanair, given that the services provided by the airport to Ryanair passengers are by nature indissociable from the services of Ryanair itself, unlike ancillary services such as accommodation or car rental. Lastly, the consultant generally questions whether it is rational behaviour for airports to spend their own money with airlines in order to attract customers on flights to and from the airport, when these extra passengers will directly benefit the said airlines.

(48) For these reasons, the consultant concludes that, for an airport, there is only limited commercial interest in advertising on the Ryanair website.

(49) Furthermore, according to the consultant, assuming that such interest does exist, this cannot be measured by the airport or by Ryanair. The consultant also notes that the marketing information on the Ryanair website is fairly brief and unsophisticated, and that if the advertising had been deemed effective (either by the airport or by Ryanair), investment to improve its quality and appearance would have been made. The consultant therefore concludes that the commercial value of the marketing services is not crucially important to the parties to the agreements.

(50) Conversely, in the consultant’s opinion, the destination region could have effectively benefited from advertising services encouraging Ryanair’s customers to spend more time or consume more in the region. However, as the agreement was signed between the CCIPB and Ryanair or its subsidiary, the consultant takes the view that any benefits to the region must be excluded from the analysis of the agreement.

(51) According to the consultant, the incongruity between the highly volatile nature of the online marketing market and the AMS fixed rate card also calls into question this undertaking’s true purpose. According to Ryanair, the agreement with AMS is optional and airport operators would not sign it if it had no commercial value. However, the consultant wonders about the pressure exerted by Ryanair during negotiations with the airport concerning the operation of routes, particularly when several nearby airports (for example Tarbes and Biarritz for Pau) are in competition to attract Ryanair.

(52) According to the consultant, all these factors indicate that Ryanair’s strategy underlying the signature of marketing services agreements is to obtain a subsidy from the airport to keep its prices low.

3.2.2. MARKETING SERVICES AGREEMENTS SIGNED WITH TRANSAVIA

(53) The consultant also examined a marketing services agreement signed between the CCIPB and the airline Transavia in 2006. This agreement is not covered by the opening decision.

3.2.3. AIRPORT SERVICES AGREEMENTS

(54) The consultant analysed a number of airport services agreements signed between the CCIPB and various airlines (namely Ryanair, Air France and Transavia) during the period between 2003 and 2005.

(55) According to the consultant, the prices of airport services are determined as follows: regulated charges (lighting charge, landing charge, parking charge and passenger charge) are set out in a price list applicable to all the airlines. The applicable charge is updated every year using a rate that depends on negotiations within the airport’s economic advisory committee. According to the consultant, the regulated charges cannot therefore differ between the airlines.

(56) According to the consultant, non-regulated charges (for groundhandling services) vary by airline and depend on bilateral commercial negotiations.

(57) The consultant compared the non-regulated services invoiced to Ryanair with the same services invoiced to other airlines (Air France and Transavia). This comparison is based on both the nature of the services and the price applied.

(58) The consultant found that the groundhandling services covered by the agreements of these two airlines seem to be duly provided and that there is a real difference in the nature of the services provided to the various airlines. Air France receives a more comprehensive package of services. Ryanair benefits from a lower flat-rate charge (but for more services) than Transavia.

(59) However, according to the consultant, who compared the flat-rate charges applied to Ryanair and Transavia and the charge applied to Air France for comparable services with a comparable joint service, Ryanair benefits from a lower charge (EUR […] (16)) than that applied to Air France (EUR […]) or Transavia (EUR […]). The price paid is seemingly around […] % of that paid by other airlines.

(60) According to France, the comparison of airport services (non-regulated services) made by the consultant does not correctly summarise the results of the various negotiations conducted by the CCIPB. France cites a number of examples justifying this charging, in particular where Ryanair does not benefit from certain services offered to Air France.

4. MEASURES COVERED BY THE EXTENSION DECISION

(61) The Commission took the view that the formal investigation procedure needed to be extended and that all the agreements signed by the CCIPB with AMS and Ryanair should be examined for the entire period during which Ryanair operated from Pau airport (2003 to 2011) in order to determine whether the agreements that the CCIPB signed with AMS and Ryanair constituted State aid.

(62) The Commission also decided to extend the formal investigation procedure to the agreement that the CCIPB signed with the airline Transavia on 23 January 2006 and to various financial contributions made by public entities to the airport during the period under review, a list of which was sent to the Commission by France by letter of 30 May 2011.

(63) These measures are detailed below in Sections 4.1 to 4.3.

4.1. AGREEMENTS SIGNED BY THE CCIPB WITH AMS AND RYANAIR

(64) The extension decision covers various agreements signed by the CCIPB with AMS and Ryanair between 2003 and 2011.

4.1.1. AGREEMENT OF 28 JANUARY 2003

(65) The agreement signed on 28 January 2003 was entered into between the CCIPB and Ryanair directly (and not with AMS). This agreement contains provisions on airport services and marketing services.

(66) Article 2 of this agreement sets out Ryanair’s obligations towards the CCIPB as well as the amount of the airport charges. Article 3 of the agreement stipulates the CCIPB’s obligations and indicates, in particular, that the latter must carry out the following at its own expense: (a) ‘provide or procure the provision of airport terminal/infrastructure services for the Services as more particularly set out in Annex A attached hereto; (b) perform such public relations and marketing functions as more particularly set out in Annex B attached hereto; (c) pay Ryanair the sum of eighty thousand euros (EUR 80 000,00) on a “one-off” basis to launch this new route after the signature of the contract. (d) In consideration of the marketing of Pau through internet links provided to CCIPB on Ryanair’s website, through the advertising of low fares to and from Pau in the print media, and through other means such as radio, outdoor and television advertising as selected by Ryanair, CCIPB shall pay Ryanair the sum of eleven euros (EUR 11,00) per passenger departing from Pau Airport on the Services monthly in arrears and/or credited against payments due from Ryanair to CCIPB under the provisions of Clause 2(b) above but limited to four hundred thousand euros (EUR 4 00 000,00) per annum per daily rotation of the Services. (e) This Agreement holds only for the Pau-London route on the minimum basis of one flight per day, and 364 days per annum. If the Pau-London route develops to the extent that there are several frequencies per day, CCIPB shall not pay any supplement. If, of a common accord, other routes develop to Germany, Belgium, Ireland or Italy, this Agreement would be replicated with the same launch payment of eighty thousand euros (EUR 80 000,00), and a maximum of four hundred thousand euros (EUR 4 00 000,00) per annum, calculated on the basis of eleven euros (EUR 11,00) per departing passenger. Each new route shall form the subject of a new Agreement or of an amendment to this Agreement’.

(67) Annex A to the Agreement provides a list of the groundhandling and related services applicable to flights operated by Ryanair. Annex B contains provisions on the public relations, sales and marketing functions of the airport. The part on sales and marketing states in particular: ‘Airport to provide sales support and assistance to assist Ryanair during periodic sales missions in the catchment area of the Airport, including free use of an office, phone and fax lines for the Ryanair team. Airport to monitor all opportunities for budget advertising (outdoor, newspapers, TV, radio and other) that the Airport sees in their region as a good opportunity for Ryanair’.

(68) This agreement was declared void by Pau Administrative Court on 3 May 2005 (17) for the following reasons: The imbalance … identified between the reciprocal undertakings of the parties to the agreement, having regard to the vagueness of Ryanair Limited’s obligations in terms of promoting abroad the town of Pau as a tourism destination and to the fact that there is no provision for a refund, even in part, of the sums paid if the objectives set out are not achieved, means that the decision in dispute is regarded as constituting financial aid to the benefit of Ryanair Limited. The decision in dispute, which approves the agreement granting financial aid to the benefit of Ryanair Limited, is, in the absence of prior notification of the said decision to the Commission of the European Communities, unlawful and must be declared void.

(69) Pau Administrative Court found in its judgment of 3 May 2005 that the CCIPB, which operates Pau airport, had undertaken to pay Ryanair, without any consideration, EUR 80 000 to launch its London Stansted-Pau route in 2003. The CCIPB had also undertaken to pay EUR 11 per passenger to Ryanair, up to an annual limit of EUR 4 00 000, as consideration for activities intended to promote the town of Pau. The court therefore concluded that the agreement constituted financial aid to the benefit of Ryanair.

(70) This 2003 agreement was therefore replaced by the two 2005 agreements covered by the decision opening the formal investigation procedure.

4.1.2. 2005 AGREEMENTS (18)

(71) The 2005 agreements were examined by the Aquitaine Regional Audit Chamber (hereinafter ‘the CRC’).

(72) The CRC’s final comments report on the CCIPB was discussed on 19 October 2006 and concerned the financial years from 2001 onwards. Part of this report concerns the aid granted to a low-fare airline (Chapter 3 of the report). Prior to this report, the CRC examined the marketing services agreement. In its final comments report, the CRC made the following comments in particular:

‘In order to sidestep the effects of the Administrative Court’s decision [concluding that the 2003 agreement with Ryanair resulted in unlawful State aid], the Chamber of Commerce and Industry has resorted to a new legal framework.’

‘AMS is simply an offshoot of Ryanair, managed by two senior Ryanair executives.’

‘Using the reasoning given by the administrative courts (Strasbourg Administrative Court, 24 July 2003, Brit Air v Strasbourg and Bas-Rhin Chamber of Commerce and Industry; Strasbourg Administrative Appeal Court, 18 December 2003, Strasbourg and Bas-Rhin Chamber of Commerce and Industry v Brit Air), the imbalance between the undertakings of the parties to the agreement is clear. Advertising on its website also benefits Ryanair and cannot constitute direct consideration for the financial undertakings made by the Chamber [the CCIPB].’

(73) According to the comments report, an imbalance ... has been identified between the reciprocal undertakings of the parties to the agreement.

(74) The report states that, despite the arguments put forward by AMS and Ryanair, the CRC maintains its position. It concludes as follows:

(75) The report also considers the effectiveness of the aid (Chapter 3.2) and its efficiency (Chapter 3.3). It states that the economic impact of the Pau-London Stansted route on the Béarn region is indisputable:

(76) With regard to the efficiency of the aid, the report states that the total cost of the route to the Chamber of Commerce and Industry in 2004, taking into account the revenue generated through this activity, is estimated at close to EUR 3 60 000.

(77) The CRC questions whether the CCIPB could achieve the same result in terms of the economic development of Béarn by granting less financial aid to Ryanair. In this context, the report refers to the compatibility rules set out in the 2005 Community guidelines on financing of airports and start-up aid to airlines departing from regional airports (19) (hereinafter the ‘2005 Guidelines’). The report concludes in this respect that these rules have not been observed.

4.1.3. AGREEMENTS SIGNED BY THE AIRPORT WITH AMS AND RYANAIR AFTER 2005

(78) According to the French authorities, the various agreements or amendments to the 2005 agreements signed by the CCIPB with AMS and Ryanair after 2005 are as follows: — A marketing services agreement signed on 25 September 2007 for an initial term of 5 years from its date of signature, with the two parties agreeing to ‘meet to discuss the possibility of the continuation of the cooperation between CCIPB and AMS’‘at least 6 months prior to the expiry of the initial term’. This promotion is linked to the operation of a Pau-Charleroi route with three flights per week per full year of operation. In return for a link to the website designated by the CCIPB on the Belgian and Dutch homepage of the Ryanair website (www.ryanair.com), the CCIPB pays AMS the sum of EUR […] per year. The route was launched on 30 October 2007. This agreement was amended by an exchange of correspondence on 16 June 2009 increasing the promotion effort to EUR […] from 1 January 2009 without any change to the services. — An amendment to the 2005 airport services agreement was made in the form of a letter from the CCIPB of 25 September 2007 accepting the application of the conditions set out in the 2005 airport services agreement to the Pau-Charleroi route for a term of 5 years. — An amendment to the 2005 airport services agreement was made in the form of a letter from the CCIPB of 17 March 2008 accepting the application of the conditions set out in the 2005 airport services agreement to the Pau-Bristol route for a term of 1 year. — A marketing services agreement signed on 31 March 2008 for a period between 16 May 2008 and 13 September 2008, with the two parties agreeing to ‘meet to discuss the possibility of the continuation of the cooperation between CCIPB and AMS’‘at least 3 months prior to the expiry of the initial term’. The promotional activities covered by this agreement are linked to Ryanair’s commitment to operate a Pau-Bristol route with three flights per week over the same period. In return for a link to the website designated by the CCIPB on the English homepage of www.ryanair.com for 8 days, the CCIPB pays AMS the sum of EUR […]. — Following discussions on 15 June 2009, the CCIPB authorised its chairman to amend the amount of the 2005 marketing services agreement by limiting it to EUR […] for 2009, which was linked to a reduction in the number of flights planned by Ryanair for its Pau-London route to 211. — An amendment to the 2005 airport services agreement was made in the form of a letter from the CCIPB of 16 June 2009 accepting the application of the conditions set out in the 2005 airport services agreement to the Pau-Bristol route for the 2009 summer season. — A marketing services agreement signed on 16 June 2009 for a period between 1 April 2009 and 24 October 2009, which could be renewed subject to agreement 3 months before its expiry. The promotional activities covered by this agreement are linked to the operation of a Pau-Bristol route with two flights per week, which is 60 projected flights over the same period. In return for a link to the website designated by the CCIPB on the English homepage of www.ryanair.com for 9 days, the CCIPB pays AMS the sum of EUR […]. The route was withdrawn in October 2009. — A marketing services agreement signed on 28 January 2010‘for an initial term starting on the date of its signature and ending one year after the date of the launch of the first service’, which could be ‘extended for an additional period of one year’. The promotional activities covered by this agreement are linked to a Pau-London Stansted route from 30 March 2010 with three flights per week and a minimum of 220 flights, to a Pau-Charleroi route from the same date with three flights per week and a minimum of 100 flights, and a Pau-Beauvais route from April 2010 with three flights per week and a minimum of 100 flights. In return for a link to the website designated by the CCIPB on the English, Belgian, Dutch and French homepages of www.ryanair.com for periods of 25 or 45 days, the CCIPB pays AMS the sum of EUR […].

(79) The services offered by AMS and their financial conditions are indicated in Article 3 of the various marketing services agreements. According to the French authorities, the amounts paid to AMS vary due to the signature of new agreements linked to new routes (Charleroi, Bristol) and changes made to the projected flight schedules, particularly for the Pau-London Stansted route. When the renewed agreements of 30 June 2005 and 25 September 2007 expired, a new agreement was signed that took into account all the routes operated from 30 March 2010.

(80) According to the French authorities, no new airport services agreement was signed after the 2005 airport services agreement expired in April 2010. The charges invoiced to Ryanair between April 2010 and April 2011 were therefore those adopted by the economic advisory committee for the regulated charges and those stipulated by the 2005 agreement for groundhandling services, as negotiations on a new agreement had failed. The French authorities have indicated that only the marketing services were the subject of a new agreement.

(81) According to France, the Pau-London, Pau-Charleroi and Pau-Beauvais routes covered by the airport services agreement were launched on 30 March 2010 for the first two routes and in April 2010 for the third route. The initial term therefore corresponded to the 2010/2011 winter schedule. By letter of 14 February 2011, the CCIPB noted that the agreement had not been extended for an additional period of 1 year, within the set time limits, and asked AMS to take into account the automatic expiry of the agreement on 1 April 2011.

(82) In its letters of 30 May 2011 and 10 May 2012, France provided a summary of the sums paid to AMS (or to Ryanair for the agreement of 28 January 2003) by the CCIPB and other public entities during the period between 2003 and 2011. The total amount of these payments between 2003 and 2011 was EUR [4 0 00 000-6 0 00 000] under the agreements referred to in recitals 64 to 81. The exact sums paid by the CCIPB and other public entities to AMS (or to Ryanair) are set out in Table 2 below. Table 2 Subsidies to AMS or Ryanair for each route operated (thousand EUR) Subsidy paid to AMS or Ryanair for each route operated 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total Pau-London […] […] […] 437 […] […] […] […] […] […] Pau-Charleroi […] […] […] […] […] […] Pau-Bristol […] […] […] Pau-Beauvais […] […] […] Total of the payments made to AMS or Ryanair […] […] […] 437 […] […] […] […] […] [4 000-6 000] Source: Letters from France of 30 May 2011 and 10 May 2012 ().

4.2. AGREEMENT SIGNED BY THE CCIPB WITH TRANSAVIA

(83) The CCIPB signed an agreement with the airline Transavia on 23 January 2006. This agreement had a term of 3 years from 26 April 2006, which was the start date of the Pau-Amsterdam route, and could be renewed for an additional period of 2 years. It was tacitly renewed in April 2009, but was terminated in October 2009 following Transavia’s decision to withdraw its services.

(84) This agreement provides for payments for marketing services of EUR 2 50 000 for the first 2 years, with 156 outbound flights per year. If the number of flights is less than 156 per year, the payment must be proportionally adjusted. For the third year, the payment is EUR […] per outbound passenger (with an annual limit of EUR […]).

(85) The agreement also provides for a renewal option for two additional years, with a payment of EUR […] per outbound passenger for the fourth year, and EUR […] per outbound passenger for the fifth year.

(86) The agreement resulted in payments totalling EUR [7 00 000-9 00 000] by the CCIPB to Transavia for the marketing services provided by the latter between 26 April 2006 and 29 October 2009.

4.3. FINANCIAL CONTRIBUTIONS FROM VARIOUS PUBLIC ENTITIES TO PAU AIRPORT

(87) In its letter of 30 May 2011, France provided the Commission with a summary of all the subsidies granted to the airport through public resources. The measures covered by the extension of the procedure are described in recitals 88 to 107. According to France, the airport does not receive any state funding or public aid intended to balance the airport’s operating accounts.

(88) In order to assess these with regard to the applicable provisions on State aid, the ‘equipment’ subsidies paid by the various public entities must be distinguished from the subsidies granted by the State to cover the costs arising, according to the French authorities, from sovereign tasks. Table 3 Pau-Pyrénées Airport: Financial contributions received by the airport from various public entities during the 2000-2010 period (thousand EUR) Nature of Subsidy 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Total FIATA State Subsidy (Sovereign Tasks) 396 11 400 300 1 107 State Equipment Subsidy (Sovereign Investment Grant) 166 (SSLIA premises (21)) 1 782 (2 CT Scanners + Vehicle) SSLIA 466 (SSLIA Vehicle) 2 414 Total Equipment Subsidy for Sovereign Tasks 166 2 178 466 11 400 300 3 521 Pyrénées-Atlantiques Departmental Council (Equipment grant) 1 326 (freight terminal) 91 (runway equipment) 478 (taxiway work) 1 895 Aquitaine Regional Council 1 413 (freight terminal) 2 164 (passenger terminal) 232 (terminals) 479 (taxiway work) 4 288 Group of Municipalities and Pau Urban Community 1 479 (freight and passenger terminals) 1 683 (passenger terminal) 643 (passenger terminal) 5 (terminals) 3 810 ERDF 1 559 (passenger terminal) 1 184 (terminals) 291 (passenger terminal) 653 (taxiway work) 3 687 Gaz de France 38 (cogeneration plant) 38 Syndicat Mixte de l’Aéroport de Pau-Pyrénées 4 030 (runway and lighting repair) 100 (runway and lighting repair) 4 130 Total Equipment Subsidy (Excluding Sovereign Tasks) 4 218 5 406 2 150 334 1 610 4 030 100 17 848 Pyrénées-Atlantiques Departmental Council (Repayment of loan capital) 97 272 113 122 98 77 779 Investments made 3 470 8 656 5 781 1 352 272 2 744 260 315 416 5 419 167 28 852

4.3.1. ‘EQUIPMENT’ SUBSIDIES

(89) During the 2000-2010 period, the airport received payments (hereinafter ‘equipment subsidies’) from the syndicat mixte, the State, various local authorities, the European Regional Development Fund (‘ERDF’) and Gaz de France to finance a range of investments (passenger terminal, runway repair, lighting repair, freight terminal, cogeneration plant, etc.) totalling approximately EUR 1 7 8 00 000 (see Table 3 above).

(90) The Departmental Council of Pyrénées-Atlantiques gave the airport an ‘equipment grant’ of EUR 1 8 95 000 to finance the freight terminal, runway equipment and taxiway work. France has also indicated that, between 2000 and 2005, the Departmental Council of Pyrénées-Atlantiques paid EUR 7 79 000 to repay the capital of a loan. France states that this measure stemmed from an agreement on the Pau airport financing plan, signed on 5 November 1990 between the local authorities and the CCIPB. This plan, totalling a maximum of EUR 5 6 80 000, covered work to upgrade certain areas and lighting and also a terminal extension. According to the agreement, the local authorities’ financing could take the form of either an equipment grant or repayment of loans taken out by the operator to finance investments, or a combination of both. The sum of EUR 7 79 000 mentioned above was used to repay the capital of a loan that the Departmental Council of Pyrénées-Atlantiques had undertaken to cover under the 1990 agreement, and which expired in 2005.

(91) The airport received four subsidies totalling EUR 4 2 88 000 from Aquitaine Regional Council to finance the freight and passenger terminals and taxiway work.

(92) The Group of Municipalities and Pau Urban Community granted EUR 3 8 10 000 to the airport to finance the freight and passenger terminals.

(93) The ERDF subsidised the development of the passenger terminal and taxiway work to the tune of EUR 3 6 87 000.

(94) Gaz de France also granted Pau airport EUR 38 000 to finance cogeneration equipment in 2003. When this financing was granted, Gaz de France was a public industrial and commercial body.

(95) Lastly, the syndicat mixte financed a programme of investments including repairs to the runway and lighting and an extension to the cark park, in the amount of EUR 4 1 30 000.

(96) Table 4 below gives an overview of the various measures or, in other words, the various legal acts having resulted in the equipment subsidies described above. For these various measures, it gives the dates of granting of the equipment subsidy, nature of the investments financed and total costs of these investments, total amounts of the equipment subsidies received under these various measures, and the periods during which these amounts were paid. Table 4 Overview of the measures having resulted in the equipment subsidies Date of granting of the subsidy Public entities having granted the subsidy Nature of the investments Total cost of the investments (million EUR) Total amounts of the subsidy (million EUR) Payment period 1999-2000 Departmental Council Regional Council Group of Municipalities and Pau Urban Community Gaz de France Freight and passenger terminals, runway equipment, cogeneration plant 15,3 11,9 2000-2003 2004 Departmental Council Regional Council European Union (ERDF) Taxiway work 2,6 1,6 2005 2009 Syndicat Mixte Renovation of runway and lighting, car park extension 5,1 (22) 4,1 2009-2010 Source: Documents produced by France.

4.3.2. STATE SUBSIDIES INTENDED, ACCORDING TO FRANCE, TO FINANCE SOVEREIGN TASKS — SYSTEM OF FINANCING SOVEREIGN TASKS IN FRENCH AIRPORTS

(97) Table 3 also shows the state subsidies intended, according to France, to finance sovereign tasks. These involve (see rows 1 and 2 of the table, period from 2000 to 2010): — subsidies from the assistance fund for airports and air transport (‘FIATA’) totalling EUR 1 1 07 000; — equipment subsidies to the tune of EUR 2 4 14 000.

(98) In total, between 2000 and 2010, Pau airport received subsidies of EUR 3 5 21 000 under this heading.

(99) According to France, these subsidies cover the cost of sovereign tasks that must be carried out by airport operators and funded by the State under French law. The tasks in question are funded from the proceeds of the airport tax and a supplementary scheme. The history and arrangements of these schemes and the types of task funded are described in recitals 100 to 108.

(100) In 1998 the Council of State ruled, in the SCARA judgment (23), that safety and security tasks within airports were sovereign tasks for which the State was responsible and that could not therefore be funded by airport users through fees. Following this judgment, Act No 98-1171 of 18 December 1998 on the organisation of certain air transport services and Article 136 of Act No 98-1266 of 30 December 1998 (1999 Finance Act) (24) introduced the airport tax as from 1 July 1999. This is a specific tax in the sense that its proceeds can be used only to finance certain expenditure, in this case the costs of tasks that France regards as sovereign within airports. The aforementioned provisions also introduced a supplementary scheme to finance these tasks, described in recitals 105 to 107.

(101) This legislation, developed by regulations, precisely defines the tasks eligible for financing through the airport tax. These tasks are aircraft firefighting and rescue, wildlife hazard prevention (25), screening of hold baggage, screening of passengers and cabin baggage, access control to the restricted area (26), environmental control measures (27) and automated border controls through biometric identification. The reference to automated border controls through biometric identification was introduced into the legislation in 2008. Otherwise, the tasks eligible for financing through the airport tax have remained the same since this scheme was introduced and correspond to the tasks identified by the SCARA judgment. Various national and European regulations clarify the obligations of airport operators in terms of carrying out these tasks. For example, with regard to aircraft firefighting and rescue, the regulations precisely define the human and physical resources to be provided depending on the characteristics of the airport.

(102) For a given airport, airport tax is payable by any airline using the airport. It is based on the number of passengers and weight of freight and mail loaded by the airline. The rate of airport tax per passenger or tonne of freight or mail is set annually, airport by airport, according to the predicted costs of carrying out the tasks financed by the scheme.

(103) Every year airport operators prepare an annual costs and traffic declaration. This declaration presents, for the previous year, the recorded traffic levels and costs of the safety and security tasks, and also the amounts received through the airport tax and supplementary scheme to finance these tasks. They also contain traffic, cost and income forecasts in relation to the safety and security tasks for the current year and the next 2 years. These declarations are checked by the administrative authorities, which can in particular carry out on-the-spot checks. The airport tax rate is then set on this basis through an interministerial order.

(104) As the airport tax rate calculations are based on predicted cost and traffic data, an ex-post adjustment mechanism has been introduced to ensure that the proceeds from the airport tax, plus the financing provided under the supplementary scheme described in recitals 105 to 107, where applicable, do not exceed the costs actually incurred in carrying out the tasks concerned. The costs in question include the operating and staff costs incurred in carrying out these tasks, depreciation on investments made in relation to these tasks, and part of the general costs associated with these tasks (28). Operators must keep multiannual accounts showing the income from the airport tax and supplementary scheme and also the costs incurred in the tasks concerned. When a positive balance is reported, this is added to the cumulative accounts from previous years. This may result in a positive or negative balance, which is then taken into account when setting the airport tax rate for the following year. In addition, any positive balance is allocated to the financial costs payable by the operator.

(105) Since its creation, the financing mechanism based on airport tax has had to be complemented by a supplementary scheme. Safety and security costs are not proportional to air traffic, unlike the income from airport tax. In this context, it became apparent that, at low-traffic airports, the airport tax rate would have needed to be set at a high level, deemed to be barely affordable for users, in order to balance the safety and security costs. For these airports, it was therefore stipulated that the airport tax could be set at a level below that required to cover the costs and that a supplementary financing scheme could be used to finance, as necessary, those tasks eligible for financing through airport tax.

(106) A succession of supplementary schemes then followed. Initially the French authorities used a trust fund, known as the ‘fonds d’intervention pour les aéroports et le transport aérien’ (‘FIATA’) or assistance fund for airports and air transport, which was set up at the same time as the airport tax through the same Act No 98-1266 of 30 December 1998 mentioned above. This fund, financed by a share of civil aviation tax, succeeded the ‘fonds de péréquation des transports aériens’ (‘FPTA’) or air transport adjustment fund, which had initially been reserved for financing routes supporting regional development and land planning. The FIATA financing covered the same tasks as were financed by the FPTA and was extended to the tasks covered by airport tax in order to supplement the latter for small airports. In essence, the FIATA tasks were split into two distinct ‘parts’: an ‘airport’ part providing supplementary cover for safety and security tasks at small airports, and an ‘air transport’ part providing subsidies for routes supporting regional development and land planning. Decisions to pay the FIATA subsidies providing supplementary financing for the safety and security tasks were taken following an opinion from the FIATA committee managing the ‘airport’ part.

(107) In 2005 the FIATA was abolished and, for 2 years, the corresponding financing was provided directly through the state budget according to the same operating principles, particularly an opinion from a management committee. From 2008 the State replaced this arrangement with an increase in airport tax, which means that this tax is set at a rate higher than what is necessary to cover the safety and security costs at certain airports. The surplus thus created is redistributed among the smallest airports in order to supplement their income from airport tax.

(108) As indicated above, the annual declarations of airport operators, which are checked by the administrative authorities, give the predicted and recorded costs and the predicted and recorded income from both airport tax and the supplementary scheme. Likewise, the annual accounts kept by operators, based on which the balance of actual costs and income is calculated, which, if positive, results in a reduction in airport tax and an allocation to the financial costs payable by operators, include both the proceeds from airport tax and the financing received through the supplementary scheme. The declaration, checking and ex-post adjustment mechanism intended to prevent the payment of public resources in excess of the costs actually incurred therefore applies to both airport tax and the supplementary scheme.

5. REASONS FOR THE OPENING AND EXTENSION OF THE FORMAL INVESTIGATION PROCEDURE

5.1. DECISION TO OPEN THE FORMAL INVESTIGATION PROCEDURE

(109) In the decision to open the formal investigation procedure, the Commission noted, in accordance with France’s notification, that the payment based on the 2005 marketing services agreement constituted a subsidy paid to AMS by the CCIPB. Given the public nature of the CCIPB, the Commission considered that the agreement involved the use of state resources.

(110) In terms of the existence of an economic advantage pursuant to Article 107(1) TFEU, the Commission expressed doubts as to whether the CCIPB, by signing these agreements with AMS and Ryanair, behaved as a prudent market economy operator (MEO) pursuing a global or sectoral structural policy, guided by prospects of profitability in the more or less long term.

(111) In this context, the Commission in particular took the preliminary view, based on the available information, that the 2005 marketing services agreement, notwithstanding the services effectively provided, was signed to subsidise the Pau-London Stansted route and that it conferred an economic advantage on Ryanair, through its subsidiary AMS, that it would not have received under normal market conditions. The Commission considered that the measure in question was likely to constitute State aid, paid to AMS by the CCIPB, that was prohibited in principle under Article 107(1) TFEU. This view was based on an analysis of the information submitted by France and the circumstances under which this agreement was signed.

(112) With regard to the 2005 airport services agreement, the Commission wondered whether an economic advantage had been conferred on Ryanair through the reduced airport charges.

(113) Lastly, the Commission expressed doubts about the compatibility of these measures with the internal market under the 2005 Guidelines.

5.2. DECISION TO EXTEND THE FORMAL INVESTIGATION PROCEDURE

(114) As regards the agreements signed by the CCIPB with Ryanair and AMS (the airport services and marketing services agreements), the Commission considered, in the extension decision, that the two types of services agreements signed at the same time had to be assessed together, as Ryanair and AMS formed a single beneficiary of the measures concerned. As a result, the Commission considered that, in order to determine whether these various agreements constituted State aid, the private operator in a market economy test needed to be applied on the various dates on which the agreements were signed (29), namely: — 28 January 2003 (Pau-London Stansted route), — 30 June 2005 (Pau-London Stansted route) and 16 June 2009 for the amendment to this agreement, — 25 September 2007 (Pau-Charleroi route) and 16 June 2009 for the amendment to this agreement, — March 2008 (airport services agreement dated 17 March 2008, marketing services agreement signed on 31 March 2008) (Pau-Bristol route), — 16 June 2009 (Pau-Bristol route), — 28 January 2010 (Pau-London, Pau-Charleroi and Pau-Beauvais routes).

(115) The Commission concluded, on the basis of the available information, that it could not rule out the possibility that Ryanair and AMS had benefited from State aid under the agreements examined. However, it considered that it did not have sufficient information to enable it to come to a final decision on the matter. In order to assess this issue, the Commission considered that, on the basis of the available information, the conduct of the CCIPB service managing the airport, the CCIPB and other public entities in their relations with Ryanair and AMS had to be assessed jointly.

(116) Likewise, the Commission expressed doubts as to whether the agreement signed with Transavia satisfied the private operator in a market economy test.

(117) As regards the compatibility of this potential aid to the airlines (30), the Commission made a distinction between the measures pre-dating the entry into force of the 2005 Guidelines and subsequent measures.

(118) With regard to the first category, the Commission took the view that the criteria to be applied in order to assess the compatibility of the potential aid in question with the internal market were as follows. — The measure contributes to the achievement of an objective of common interest, namely the launch of new routes, with long-term viability, to another airport in the European Union. — The amount of the aid is necessary and proportional to the additional costs incurred in launching new routes, and the measure has an incentive effect. — The measure is granted in a transparent and non-discriminatory way. — It provides for penalties if the airline fails to comply with its obligations. — It does not affect competition in a manner contrary to the common interest.

(119) The Commission expressed doubts as to whether these criteria were met and also whether this potential operating aid was compatible with the internal market.

(120) In terms of the compatibility of the measures post-dating the entry into force of the 2005 Guidelines, the Commission mainly referred to the criteria set out in these guidelines for start-up aid to airlines. The Commission expressed doubts as to whether these criteria were met.

(121) With regard to the equipment subsidies to the CCIPB, the Commission wondered whether the public authorities had acted as a prudent investor in granting these subsidies. The Commission indicated that it could not therefore rule out the possibility of these subsidies constituting State aid.

(122) As regards the compatibility of this potential aid with the internal market, the Commission referred to the criteria set out in the 2005 Guidelines on investment aid to airports. The Commission expressed doubts as to whether this potential aid was compatible with the internal market.

6. COMMENTS FROM INTERESTED PARTIES

6.1. COMMENTS SUBMITTED BY INTERESTED THIRD PARTIES FOLLOWING THE OPENING OF THE FORMAL INVESTIGATION PROCEDURE

(123) The Commission received comments from five interested third parties:

6.1.1. CHAMBER OF COMMERCE AND INDUSTRY OF PAU-BÉARN (CCIPB)

6.1.1.1. Airport services agreement signed with Ryanair

(124) According to the CCIPB, given the objective and non-discriminatory conditions under which the airport charges are applied to Ryanair and all the other airlines using Pau airport, the airport services agreement does not contain any element of State aid.

(125) The CCIPB notes that Pau airport self-finances its operation through its income and takes the view that it does not receive any State aid or financing to balance its operating accounts.

(126) As regards the airport charges applied to Ryanair, the CCIPB confirms that these stem from the application of rates applicable as much to Ryanair as to any other airline.

(127) The CCIPB notes that there are three categories of airport charges: — regulated airport charges, — non-regulated groundhandling charges, — state taxes.

(128) Firstly, the CCIPB confirms that it applies the regulated airport charges (of which there are four: landing charge, parking charge, runway lighting charge and passenger charge) to airlines in an objective and non-discriminatory way. Their amount is determined by a joint committee comprising the operators and the airlines, as well as the supervisory authority.

(129) The CCIPB indicates that it does not exempt Ryanair from parking and runway lighting charges, but that the agreement simply states that ‘Ryanair will not normally have to pay’ these charges. The CCIPB notes that, with regard to the parking charge, this becomes payable only after the aircraft has been parked for more than two hours at the airport, whereas Ryanair’s turnaround time is normally limited to 25 minutes. The CCIPB notes that, with regard to the runway lighting charge, Ryanair’s flights operate only in the daytime, which reduces the likelihood of Ryanair having to pay a lighting charge.

(130) Secondly, with regard to the non-regulated groundhandling charges (for example, groundhandling services or aircraft docking), the CCIPB notes that the rates are commercially negotiated with each airline according to its specific situation. In practice, any purely arithmetic comparison between airlines is not necessarily relevant given that, despite the identical size of aircraft, many other criteria need to be taken into account, such as the annual volume and frequency of the airline’s flights, the daytime period (off-peak or peak) during which flights are operated, additional charges for night flights, delays, de-icing operations, aircraft cleaning operations, and so on.

(131) Thirdly, the CCIPB stresses that, with regard to state taxes (of which there are two: airport tax and civil aviation tax), these are applied in a strictly identical manner to all airlines. The CCIPB is not involved in determining their amount, which is set by the regulatory authority.

6.1.1.2. Marketing services agreement signed with AMS

(132) According to the CCIPB, the sums paid by the CCIPB to AMS do not constitute State aid. The CCIPB notes that, as the concession-holder for Pau airport, it decided in line with the 2005 Guidelines to publish, in the Air & Cosmos magazine for December 2007, a call for proposals in order to find one or more airlines ready to offer new destinations in Europe from Pau in return for financial aid (eight lots were envisaged). However, by 31 January 2008, which was the deadline for receiving proposals, no offers had been made by any airlines.

(133) Furthermore, the CCIPB considers that its decision to sign the marketing services agreement with Ryanair is not attributable to the State. According to the CCIPB, no public or administrative authorities were involved at any stage in the negotiations with Ryanair or in the conclusion of the commercial partnership with this company.

(134) The CCIPB takes the view that chambers of commerce and industry (‘CCIs’) operate airport facilities ‘under the rules of private law’.

(135) According to the CCIPB, CCIs constitute ‘a very specific category of public body ... whose object is to freely represent the commercial and industrial interests of their area before public authorities’. The CCIPB adds that ‘the fact that they are linked to the State ... does not in itself imply any subordination’. When operating the airport and, as a result, when concluding a partnership with Ryanair, the CCIPB is therefore operating entirely independently of its supervisory authority and without any direct or indirect state intervention.

6.1.1.3. Criterion of a private investor in a market economy

(136) The CCIPB indicates that it received an offer from Ryanair to operate the Pau-London Stansted route after the agreement of 28 January 2003 was declared void by Pau Administrative Court on 3 May 2005.

(137) As regards the operational aspect of the route, the CCIPB signed with Ryanair an airport services agreement that, according to the CCIPB, did not result in any substantial difference in treatment between Ryanair and other airlines operating from Pau airport. The CCIPB adds that, in order to commercially develop the airport, it signed a web marketing services agreement with a wholly-owned subsidiary of Ryanair, namely AMS. With regard to this agreement, the CCIPB takes the view that it acted as a private investor in a market economy for five reasons, which are set out in recitals 138 to 142.

(138) Firstly, in return for the price paid by the CCIPB, AMS would provide genuine commercial services, including numerous weblinks on the ryanair.com website, enabling internet users to be directed straight to the websites of the CCIPB, the airport, the region’s infrastructure (buses, trains, taxis), the Béarn Tourism Office, and so on.

(139) Secondly, the ryanair.com website is currently and indisputably the leading travel reservation website in Europe, and by far one of the websites most Googled by internet users. Using the ryanair.com website to advertise Pau airport represents a real opportunity for the airport and the local communities that it serves. Airports and other third parties (car rental companies, hotels, regions, etc.) are ready to pay the prices indicated in the rate card published on the AMS website. Some wholly private airports have also agreed to pay these amounts. The CCIPB stresses the added value of advertising on the ryanair.com website, citing a study by the company Planet-Work that indicated that advertising purchased on the ryanair.com website offered greater visibility, for Pau airport and its region, in terms of the number of clicks by internet users, than advertising on the voyages-sncf.com website. The CCIPB therefore concludes that, for the services provided, the prices applied by AMS and paid by the CCIPB are ‘market prices’.

(140) Thirdly, in the CCIPB’s opinion, it does not seem that the one-off nature of the price paid for the services provided is a criterion for determining the existence of State aid.

(141) Fourthly, the sums paid under the Pau-Charleroi agreement resulted in different services from those that the CCIPB received under the Pau-London agreement. Accordingly, the CCIPB has not paid twice for the same service, which helps to prove that the sums paid are not subsidies for the launch of a route. The CCIPB also asserts that, if the sum had been intended to support the route’s structural operating deficit, it would have clearly been insufficient.

(142) Fifthly, the CCIPB considers that it is very difficult for a non-profit-making public body to prove that the sum of EUR […] paid to AMS has enabled the CCIPB to ‘make a profit’ of EUR […]. However, the CCIPB is certain that, in terms of image and/or attractiveness, the link on the ryanair.com website (and the absence of short-haul destinations on this website) made this investment worthwhile.

6.1.1.4. Distortion of competition

(143) The CCIPB takes the view that the sums that it paid in return for the marketing services provided by AMS do not affect competition.

(144) The Pau destination did not spontaneously interest any airline other than Air France and, despite the airport’s efforts, only Ryanair for London and Transavia for Amsterdam submitted proposals.

(145) The CCIPB notes that the arrival of low-fare routes did not affect the Air France routes, which saw their traffic from Pau increase from 2003.

6.1.2. ASSOCIATION OF EUROPEAN AIRLINES (‘AEA’)

(146) The AEA considers itself to be an interested party in this case. Firstly, it has one member airline operating at Pau airport (Air France). More generally, however, the AEA, which represents the interests of European ‘network’ carriers, considers that it has a natural interest in monitoring the implementation of the 2005 Guidelines. According to the AEA, carriers that unlawfully benefit from certain reductions in their charges contribute to creating distortions of competition within the common market, to the detriment of other carriers that have to bear the costs of their operations.

(147) The AEA considers that the two agreements that the CCIPB signed with Ryanair and its wholly-owned subsidiary AMS, namely (1) the airport services agreement for the London Stansted-Pau route and (2) the web marketing services agreement under which AMS receives a one-off sum of EUR 4 37 000 per year, raise serious concerns.

(148) In its opinion, the fact that Ryanair is the only airport user to benefit from a special airport services agreement is a more than questionable practice. Furthermore, it considers that Ryanair should not be exempt from parking and lighting charges and that, when Ryanair’s turnarounds exceed two hours, it should be subject to the same charges as other airlines.

(149) The AEA claims that it has been broadly acknowledged by various French courts that the marketing services agreement signed with AMS created conditions that were excessively favourable to Ryanair (31). It notes that expressions such as ‘imbalance’ were also used by Pau Administrative Court in a May 2005 judgment, which could only conclude that this type of agreement constituted financial aid to Ryanair. The AEA does not question the practice of marketing services per se, but doubts that normal market conditions have been respected in these particular contractual arrangements.

6.1.3. RYANAIR

(150) Ryanair argues that the terms and conditions of the 2005 airport services agreement correspond to market conditions and that the agreement does not confer any selective advantage on Ryanair and does not therefore distort competition or affect trade between Member States.

(151) Ryanair points out that it is paying the standard airport charges and taxes applicable at Pau airport, in addition to commission on ticket sales and excess baggage. It notes that these charges are similar to those applied at other comparable airports, as well as to other airlines operating at Pau airport. To its knowledge, the CCIPB is not treating Ryanair more favourably than other airlines.

(152) According to Ryanair, the conditional reductions in the parking and lighting charges and in the handling charges provided for in Articles 7.1.3 and 7.2 of the 2005 airport services agreement are based on objective criteria set out in the agreement, namely the absence of daytime lighting and parking or heavy handling given Ryanair’s 25-minute turnaround time and ‘no frills’ service offered to its passengers. Ryanair notes that these exemptions also apply to other similar airlines, and that Article 3 of the 2005 airport services agreement expressly notes the CCIPB’s obligation to apply the conditions granted to Ryanair to other comparable airlines (32).

(153) Ryanair stresses that the terms and conditions offered to it are not secret and that, contrary to standard industry practice, the 2005 airport services agreement expressly authorises the CCIPB to reveal its contents to other airlines.

(154) Ryanair maintains that it did not receive any unlawful advantage from the CCIPB under the 2005 airport services agreement and that the transparent relationship covered by the agreement lacks the selectivity that is an essential condition (although not sufficient by itself) for classifying a measure as State aid. It also asserts that the other conditions necessary for State aid to exist (effect on trade between Member States and distortions of competition, for example) are not met by the measures in question.

6.1.4. AIRPORT MARKETING SERVICES (AMS)

(155) AMS indicates that it offers advertising space on the Ryanair website under standard market conditions at prices based on a rate card published on its own website.

(156) AMS considers that the web marketing services (WMS) agreement with the CCIPB falls outside the scope of EU transport rules, since it is a standard commercial advertising agreement, similar to those routinely entered into with newspapers, television and radio broadcasters, outdoor media providers, and so on.

(157) According to AMS, the conditions for the purchase of advertising space on the Ryanair website by the CCIPB reflect and correspond to market conditions. With regard to the value of advertising space on the Ryanair website, AMS stresses that its pricing of this space reflects the increasing commercial success of this website and its unique ability to address advertising to a highly targeted audience.

(158) AMS argues that the Ryanair website is much more desirable as an advertising space than any other travel site of any general portal used as a benchmark by the Commission. It stresses that the Ryanair website records in excess of 300 million page views per month.

(159) AMS claims that the CCIPB purchased advertising space under the same conditions as private customers. According to AMS, the prices set out in the web marketing services agreement were the standard prices in the AMS rate card at the time of the agreement and were the same for all customers, whether public or private. It indicates that private airport operators ([…] and […], for example) signed agreements with AMS that were similar to the agreement entered into with the CCIPB.

(160) AMS argues that it is irrelevant whether or not the agreement in question was needed, as raised by the Commission in the opening decision: ‘… the Commission wonders whether the CCIPB needs the marketing services in question and whether the marketing services agreement was not concluded solely in order to subsidise the Pau-London Stansted route’ (33).

(161) According to AMS, this type of transaction carried out under market conditions precludes the existence of aid and there is no legal precedent for the assessment of this ‘need’. However, if the Commission insists on questioning this need, AMS points out that the CCIPB is responsible for both promoting the Pau-Béarn region and operating Pau airport. It considers that advertising on the Ryanair website makes commercial sense in terms of both these objectives.

(162) With regard to purchasing advertising space to promote the region, AMS stresses that French CCIs are in competition with each other and have to use ‘territorial marketing’ so that their region comes out ahead of competing regions.

(163) AMS considers that advertising space purchased on the Ryanair website increases the visibility of Pau airport. In its opinion, the CCIPB has a direct commercial interest in taking this approach because the resulting increase in passengers attracts ancillary businesses to the airport and increases airport revenue.

(164) AMS claims that the CCIPB is not advertising on the Ryanair website in order to subsidise the Pau-London route, rather that the space on the Ryanair website that AMS is making available to the CCIPB constitutes a valuable resource for which there is proven alternative demand, including from the private sector. It would therefore be inaccurate to describe the sale of such space as a mere pretext for the payment of subsidies.

(165) According to AMS, the web marketing services agreement does not constitute aid because its conditions correspond to those of a standard commercial agreement and do not confer any advantage on AMS (or Ryanair). It considers that this agreement does not therefore distort competition or affect trade between Member States.

6.1.5. AIR FRANCE

(166) From Pau airport, Air France offers around five daily flights to Paris Orly airport, three daily flights to Paris Roissy Charles de Gaulle airport, and four daily flights to Lyon airport (through a subsidiary).

(167) Air France states that the advantages granted to Ryanair and its subsidiary AMS, from which Air France does not benefit, have the effect of significantly reducing Ryanair’s operating costs. According to Air France, this not only affects the direct competition between Ryanair and Air France for flights offered to and from Pau airport, but also the competition for all intra-Community routes. Trade between Member States is therefore directly affected.

6.1.5.1. Airport charges

(168) Air France notes that, according to the 2007 price brochure published by the CCIPB, the public rate for the parking charge is set at EUR 0,16 tonne/hour. This charge applies when an aircraft is parked for at least two hours on the tarmac. Air France does not find it odd that Ryanair does not pay this charge for a 25-minute turnaround, but, when a turnaround exceeds two hours, Ryanair should be required to pay this charge.

(169) Air France notes that, according to the 2007 price brochure published by the CCIPB, the public rate for the lighting charge is set at EUR 35,18 per aircraft movement. This charge is payable when lighting equipment is used for an ‘aircraft movement’, namely a landing or takeoff, both during the day and at night. Not applying this charge to Ryanair on the pretext that it operates only daytime flights does not therefore comply with the general conditions for the application of this charge.

(170) Air France stresses that these public charges are usually reviewed over time and it considers that Ryanair — like other carriers flying to and from Pau airport — should be subject to any variations in these charges.

6.1.5.2. Groundhandling services

(171) Air France indicates that the groundhandling service provided to it at Pau airport is the subject of a formal contract. Air France notes that, according to the 2005 Guidelines, ‘An airport operator acting as a provider of groundhandling services may charge different rates for the groundhandling charges invoiced to airlines if these different rates reflect cost differences linked to the nature or scale of the services provided’. Air France stresses that Pau Administrative Court, in its judgment of 3 May 2005, found that an unjustified discount granted to Ryanair on the groundhandling charges constituted State aid that, due to not having been notified, should be regarded as unlawful.

(172) Air France notes that it offers significantly more services to and from Pau airport than Ryanair. Under these circumstances, Air France believes that the charges applied by the CCIPB to Ryanair for groundhandling services should not be more advantageous than those offered to Air France.

6.1.5.3. Marketing services agreement signed with AMS

(173) Air France notes that this type of agreement between the airport operator and the Ryanair subsidiary AMS seems to be a common practice for Ryanair at airports from which it decides to launch routes. Air France indicates that the French administrative courts have already rejected this type of measure where the alleged promotional services have not been provided or have been provided under conditions that are excessively favourable to Ryanair.

(174) Air France cites the ‘imbalance’ highlighted by Pau Administrative Court in its judgment of 3 May 2005 between the reciprocal undertakings of the parties to the agreement signed between the CCIPB and Ryanair in 2003. Air France considers that it is questionable whether a balance exists between the obligations of the parties to the 2005 agreement with AMS. According to Air France, there is nothing to indicate that all or part of this sum may be refunded by Ryanair if either the route in question is withdrawn or the promotional objectives that may be set are not achieved.

(175) Air France does not dispute the fact that certain ‘marketing’ aid may be acceptable under the Community rules. However, Air France considers it unlikely that the ‘marketing services’ agreement meets the conditions required to be compatible with the internal market under Article 107(3)(c) TFEU.

6.1.5.4. Conclusion

(176) Air France asks for an end to the payments that, in its opinion, are undue and that Ryanair has received from Pau airport since 2005, and that the recovery of the unlawful aid received by Ryanair be ordered.

6.2. COMMENTS SUBMITTED BY INTERESTED THIRD PARTIES FOLLOWING THE EXTENSION OF THE FORMAL INVESTIGATION PROCEDURE

6.2.1. CHAMBER OF COMMERCE AND INDUSTRY OF PAU-BÉARN (CCIPB)

(177) The CCIPB believes that the marketing services agreements and airport services agreements that it has signed with the airlines and/or their subsidiaries do not contain any element of State aid.

(178) The CCIPB notes that the nature and purpose of these agreements are radically different and must be analysed separately. It is irrelevant that these agreements may have been signed on the same date as they each have a different purpose. The airport services agreement is intended to determine the conditions under which Pau airport makes its airport facilities available to airlines and provides them with various airport services in return for remuneration. On the other hand, the marketing services agreement is intended to define the conditions under which, in return for remuneration, an airline must promote Pau airport and the tourist and business attractions of the Pau-Béarn region on its website. The two types of agreement are not therefore intrinsically linked. In the same way, even though the terms and conditions for airport services provided by the airport and marketing services provided by an airline or one of its subsidiaries may appear in one and the same agreement, this does not mean, however, that the legal analysis of the existence of State aid must cover both these types of service where they do not ‘balance out each other’.

(179) As regards the conduct of the CCIPB and that of other public entities, the CCIPB takes the view that they should not be assessed together, at the very least in terms of the marketing services agreements (which further justifies the separate assessment of the agreements), as these agreements are negotiated and concluded by the CCIPB in a strictly independent manner, without the intervention of other public entities.

6.2.1.1. Marketing services agreements signed by the CCIPB

Imputability

(180) According to the CCIPB, the payments made under the marketing services agreements are not imputable to the State because the CCIPB is fully independent of its supervisory authorities with regard to the airport’s operation. The decisions to pay the sums to Ryanair and AMS, on the one hand, and to Transavia, on the other hand, for marketing services were taken by the CCIPB individually and independently, without any direct or indirect intervention by the State.

Economic advantage granted to airlines

(181) The CCIPB considers that it has clearly acted like a prudent private investor in a market economy. In particular, AMS and Transavia have provided genuine commercial services, including links on their websites allowing internet users to be directed straight to the CCIPB’s website, for which the remuneration corresponds to the market price. The CCIPB stresses in this respect the large number of visitors to the Ryanair and Transavia websites.

(182) The CCIPB also notes that the prices applied by AMS are as set in a public rate card available on its website. These prices are therefore applied to all airport customers of AMS without distinction, including certain fully privatised British airports. For its part, Transavia provides marketing services to a private airport in Italy.

(183) In addition, according to the CCIPB, certain French airports operated by private companies (as public service licensees) appear to have signed a marketing services agreement with AMS, including Tarbes-Lourdes-Pyrénées airport managed by the Canadian company SNC-Lavalin. The CCIPB regards this as evidence that its conduct corresponds to that of a private operator.

(184) The CCIPB also notes that the one-off nature of the price paid for the services provided does not appear to be a criterion for determining the existence of State aid, and that the sums paid under the Pau-Charleroi agreement resulted in different services from those that the CCIPB received under the Pau-London agreement, as a result of which the CCIPB has not paid twice for the same service. The CCIPB also considers that the sums paid are insufficient to launch a route.

(185) The CCIPB considers that, by purchasing these marketing services at the prices stated in the agreements, it has benefited from indisputable economic consideration in two respects. Firstly, the marketing services have had a favourable impact on the airport’s operating revenue, in particular by encouraging an increased flow of passengers within the airport. Secondly, and furthermore, this consideration has also benefited the entire town of Pau and its region.

(186) The CCIPB does not agree with the consultant’s view that Ryanair’s strategy underlying the signature of marketing services agreements is to obtain a subsidy from the airport to keep its prices low. Unlike the consultant, the CCIPB takes the view that there is significant commercial interest in purchasing such services as Pau airport is a regional airport without a natural flow of passengers in a sufficient volume to balance its operating accounts. The CCIPB indicates that, since Ryanair’s arrival at the airport and the promotional efforts made on its website, Pau airport has substantially increased its traffic.

(187) Lastly, the CCIPB indicates that it refused to renew the marketing services agreement with AMS because the new prices being negotiated were too high. This decision confirms that it was not ready to accommodate Ryanair at any cost.

Distortion of competition

(188) According to the CCIPB, the sums paid in return for marketing services have in no way affected competition between either airlines or airports. The CCIPB stresses that it must make promotional efforts as it has extreme difficulty in attracting airlines because they prefer to operate from local airports that are more attractive in terms of leisure tourism. The CCIPB cites Biarritz-Anglet-Bayonne airport, which serves a region renowned for its beaches, and Tarbes-Lourdes airport, which benefits from the religious site at Lourdes.

(189) The CCIPB notes that, at Pau airport, the competition from low-fare airlines has in no way affected Air France’s operations, which continued to grow until 2008 when the financial crisis broke. Furthermore, the CCIPB stresses that, prior to Ryanair’s arrival in 2003, no airline operated any international routes from Pau airport, and that this arrival therefore did not affect competition for existing routes.

6.2.1.2. Airport services agreements

(190) The CCIPB points out that all the airport charges are strictly applied in identical fashion to all users and all airlines at Pau airport. The CCIPB refutes in this respect that any discriminatory practices exist.

(191) Furthermore, the CCIPB does not agree with the consultant’s view that the non-regulated charges vary from one airline to another without just cause. According to the CCIPB, the charges for non-regulated services are negotiated with each airline according to its specific situation. The CCIPB concludes from these arguments that none of the airport services agreements examined by the Commission contains any element of State aid.

6.2.1.3. Subsidies to the airport

(192) The CCIPB takes the view that none of the ‘subsidies’ received by Pau airport over the 2000-2010 period and examined in the formal investigation procedure contains any element of State aid.

Sovereign task subsidies

(193) According to the CCIPB, the subsidies of EUR 3 5 21 000 mentioned in Section 4.3.1 were intended to finance tasks entrusted by law to airport operators, but that normally fall under State responsibility in the exercise of its official powers as a public authority. Accordingly, these tasks are not economic in nature and the subsidies in question therefore do not fall within the scope of State aid rules.

Equipment subsidies

(194) The CCIPB takes the view that the equipment subsidies granted by the syndicat mixte and local authorities do not contain any element of State aid. These sums have been used to finance investments made by the owners of the airport infrastructure in maintaining and improving that infrastructure, or, in other words, developing their own assets. These investments have therefore been made solely for the benefit of their owners. These sums have not, however, conferred any economic advantage on the CCIPB because they have not reduced the operating costs that it must normally bear as airport operator. These sums have simply ‘passed through’ the CCIPB given that, in its capacity as operator of the public equipment, it is responsible for carrying out this maintenance, upgrading and improvement work.

(195) As a result, according to the CCIPB, in paying equipment subsidies, the concession authority and local authorities have acted quite naturally, in their capacity as owners of the airport infrastructure and under the public equipment concession, to ensure that work to maintain, upgrade and improve the airport public service is carried out with a view to developing their assets. These are therefore investments that are naturally the responsibility of the public equipment owner and not its operator.

(196) The CCIPB further notes that, at the end of the concession (end of 2015), it must return this airport infrastructure to its owners, together with the investments made.

(197) In addition, the subsidies in question have in no way distorted competition with other neighbouring airports (Tarbes-Lourdes-Pyrénées and Biarritz-Anglet-Bayonne) because these have also received similar subsidies from their concession authorities.

(198) With regard to the sum of EUR 38 000 received from Gaz de France in 2003, the CCIPB notes that this measure is not imputable to the State, but was taken independently by Gaz de France. In addition, this decision has not conferred any economic advantage on Pau airport because Gaz de France has acted as a prudent private investor in a market economy. Gaz de France in fact suggested to the CCIPB that a cogeneration plant be installed so that the airport could make energy savings on its heating and air-conditioning and so that Gaz de France could supply the gas needed for its operation.

Compatibility based on Commission Decision 2005/842/EC

(199) The CCIPB notes that Commission Decision 2005/842/EC (34) (hereinafter the ‘2005 SGEI Decision’) applies to the measures in question. The CCIPB stresses that the scope of this Decision includes ‘public service compensation for airports … for which average annual traffic during the two financial years preceding that in which the service of general economic interest was assigned does not exceed 1 0 00 000 passengers, in the case of airports’ and ‘which receive annual compensation for the service in question of less than EUR 30 million’ (Article 2). As a result, according to the CCIPB, which takes the view that it has been entrusted with providing an airport public service, if the subsidies paid to the airport do constitute aid, this aid is compatible and exempt from the prior notification obligation based on the 2005 SGEI Decision.

Compatibility based on the 2005 Guidelines

(200) The CCIPB argues, in the alternative, that the subsidies received by Pau airport and the CCIPB meet the compatibility criteria laid down by the 2005 Guidelines.

6.2.2. RYANAIR

(201) Ryanair argues that the Commission has wrongly fused AMS’s and Ryanair’s separate agreements with the CCIPB into a single alleged State aid case. Ryanair further states that the investigation into the relationship between AMS and Pau airport flies in the face of the commercial success of the Ryanair offering, and that AMS has a large range of customers, not just airports, and its model is increasingly being replicated on other airline websites.

6.2.2.1. Consultant’s report of 30 March 2011

(202) Ryanair disputes some of the findings in the consultant’s report, in particular the following three claims (35): (a) ‘The Ryanair website therefore primarily seems to be comparable to the websites of other airlines that generally host only a limited amount of paid advertising, with airports not featuring among the advertisers.’ Ryanair states that it is wrong to claim that other airlines do not offer paid advertising on their websites. It argues that this practice is increasingly widespread and that regional airports, which suffer from low demand, are increasingly seeing the websites of their low-fare airline customers as the best place to advertise. Ryanair is also an example of an airline advertising parking services, on its website, for a hub airport from which it operates. (b) Ryanair maintains that it is incorrect to argue that airports are not comparable to other advertisers on its website, in so far as the airport services provided to Ryanair’s passengers cannot be dissociated from the services provided to passengers by Ryanair itself. Ryanair argues that potential passengers seeing an advertisement for an airport on its website will generate income for the airport whether or not they fly with Ryanair. It therefore maintains that the position of airports advertising on its website is, contrary to the Commission’s opinion, similar to that of other advertisers such as hotels and car rental companies. (c) According to Ryanair, the consultant wrongly questions whether it is rational behaviour for airports to spend their own money with airlines in order to attract customers on flights to and from the airport, when these extra passengers will directly benefit said airlines. According to Ryanair, the fact that the provision of marketing services would benefit the provider of the advertising space, namely Ryanair, does not mean that it would not also benefit the airport purchasing those services. Ryanair is indifferent as to whether or not an airport advertises on its website since its load factors are similar on routes to those airports with an AMS advertising agreement to those without. Ryanair adds that regional airports generally have no entrenched market position, so advertising is a necessity. It also claims that the Commission is misguided in focusing on the benefits to the airline, since the MEO test does not require a measure to generate no benefit for a third party, including the provider of the advertising space. Ryanair stresses that the AMS marketing agreements with airports are separate from Ryanair’s agreements with airports, and are not contingent upon the alleged ‘benefit’ that Ryanair may receive from the airport’s advertising on ryanair.com.

6.2.2.2. AMS and Ryanair as a single beneficiary

(203) Ryanair takes the view that the CCIPB’s airport services agreement with Ryanair and its marketing agreement with AMS are separate and independent and concern different services, and that there is no link between them justifying their consideration as a single source of ‘measures’. In Ryanair’s view, the AMS agreements have benefited the CCIPB as the purchaser of advertising services and are not intended to improve Ryanair’s load factors or performance on its routes.

6.2.2.3. State resources and lack of imputability

(204) Ryanair disputes that the decisions made by the CCIPB are imputable to the State, and claims that the CCIPB’s agreements with Ryanair and AMS have involved no transfer of resources from the French State.

(205) Ryanair claims that the CCIPB is not just another facet of the French State and that imputability cannot be established solely on the basis that the CCIPB is a public undertaking and therefore under the control of the French State. Ryanair considers that the Commission must examine the role of public authorities in the CCIPB’s decisions in relation to Ryanair and AMS.

(206) In addition, Ryanair refers to the case-law of the French courts, based on which it takes the view that the chambers of commerce and industry are original entities characterised by their dual nature and that they should be categorised as ‘public economic bodies’.

(207) As regards the involvement of the State in the decision-making process, Ryanair argues that the State has to be informed only about certain types of decision, and only ex post.

6.2.2.4. Business plan

(208) Ryanair maintains that the absence of a business plan when the 2005 agreements were signed cannot be used as evidence that the agreements did not satisfy the MEO test.

6.2.2.5. Ryanair’s comments of 10 April 2013

(209) On 10 April 2013 Ryanair submitted two notes prepared by the company Oxera and an analysis prepared by Professor Damien P. McLoughlin.

First Oxera note — Definition of the market benchmark in the comparative analysis for the MEO test. Ryanair state aid cases, note prepared for Ryanair by Oxera, 9 April 2013

(210) Oxera takes the view that the Commission’s approach of accepting only comparator airports in the same catchment area as the airport under investigation is flawed.

(211) Oxera argues that market benchmark prices obtained from comparator airports are not affected by State aid granted to surrounding airports. It is therefore possible to robustly estimate a market benchmark when applying the MEO test.

(212) In fact: (a) comparator analyses are widely used when applying the MEO test outside the field of State aid; (b) companies influence each other’s decisions only to the extent that their products are substitutable or complementary; (c) airports in the same catchment area do not necessarily compete with each other, and the comparator airports used in the reports submitted face limited competition from public airports in their catchment area (less than one-third of the commercial airports in the catchment area of the comparator airports are fully state-owned, and none of the airports in the same catchment area as the comparator airports was the subject of a State aid procedure (in April 2013)); (d) even where the comparator airports face competition from public airports in the same catchment area, there is reason to believe that their conduct satisfies the MEO test (for example, where the private sector holds a large stake or where the airport is privately operated); (e) airports that satisfy the MEO test will not set prices below the marginal cost.

Second Oxera note — Principles underlying the profitability analysis for the MEO test. Ryanair state aid cases, note prepared for Ryanair by Oxera, 9 April 2013

(213) Oxera argues that its profitability analysis in its reports submitted to the Commission uses the principles that would be adopted by a rational private sector investor and reflects the approach taken in previous Commission decisions.

(214) The principles underlying the profitability analysis are as follows: (a) the assessment is undertake