2001/163/EC: Commission Decision of 21 December 2000 on a procedure relating to the application of Council Regulation (EEC) No 2408/92 (Case TREN/AMA/12/00 — Italian traffic distribution rules for the airport system of Milan) (Text with EEA relevance) (notified under document number C(2000) 4121)
Date: 2000-12-21
Institutions: European Commission
Subjects: Lombardy, air traffic, air transport, airport, intra-EU transport, transport capacity

28.2.2001

EN

Official Journal of the European Communities

L 58/29

COMMISSION DECISION

of 21 December 2000

on a procedure relating to the application of Council Regulation (EEC) No 2408/92 (Case
TREN/AMA/12/00 — Italian traffic distribution rules for the airport system of Milan)

(notified under document number C(2000) 4121)

(Only the Italian text is authentic)

(Text with EEA relevance)

(2001/163/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EEC) No 2408/92 of 23
July 1992 on access for Community air carriers to intra-
Community air routes (1), as amended by the Act of Accession
of Austria, Finland and Sweden, and in particular Article 8(3)
thereof,

effective hub as well. To achieve this there has to be a
large volume of traffic at Malpensa in order to maintain
a critical mass between the waves of aircraft arrivals and
departures, and this inevitably means transferring traffic
to Malpensa. However, such a
from Linate airport
transfer could not be left to market forces alone, since
passengers generally prefer to use Linate because it is
closer to Milan city centre. The Italian authorities there-
fore decided to adopt mandatory traffic distribution
rules so as to secure the transfer of traffic from Linate to
Malpensa needed to achieve this objective.

After consulting the Advisory Committee established pursuant
to Article 11 of that Regulation,

Whereas:

(3)

BACKGROUND

I

(1)

(2)

The airport system of Milan comprises the airports of
Linate, Malpensa and Orio al Serio (Bergamo). Up to
1998 technical and economic reasons had prevented any
of the three Milan airports from becoming a major hub
airport for national,
international and intercontinental
flights. Most of the intra-Community traffic was concen-
trated at Linate airport. As a result the available airport
capacity was used inefficiently, Linate airport being over-
used and Malpensa underused.

To meet the needs of the city of Milan and northern
Italy, the Italian authorities decided to reorganise Milan's
airport system so as to make Malpensa the main airport
of the system and provide adequate airport capacity for
to be achieved by
the future. That objective was
enlarging and upgrading Malpensa airport, and the
project was given the name Malpensa 2000. This project
was one of the 14 priority projects of the Trans-Euro-
pean Transport Network under Decision No 1692/96/
EC of the European Parliament and of the Council (2).
The original plan was to turn Malpensa into a major
into an
airport, and it was later decided to turn it

Accordingly, by Decrees No 46-T of 5 July 1996 (here-
inafter referred to as ‘Decree of 5 July 1996’) and No
70-T of 13 October 1997 (hereinafter referred to as
the Italian authorities
‘Decree of 13 October 1997’)
provided that from 25 October 1998 onwards all air
services to and from Milan would be operated from
either Malpensa airport or Orio al Serio airport, apart
from general aviation services and flights on routes
serving Milan in which total passenger numbers
amounted to at least 2 million during the previous year
or reached an annual average of 1,75 million over the
previous three years. In practice, the only route reaching
those thresholds was Milan-Rome, so it was no longer
possible to allow any other scheduled air services at
Linate.

(4)

The Commission decided on 16 September 1998 that
Italy could not apply the traffic distribution rules in the
Decrees of 5 July 1996 and 13 October 1997 (3). In its
Decision, after recalling among other things the general
background to the case, the Commission said that the
rules would in practice produce discriminatory effects
favouring Alitalia, since:

‘the criteria set out in Decree No 46-T, by permitting
only Alitalia to serve its Rome-Fiumicino hub from
Linate airport while other Community air carriers
will be obliged to serve their respective hubs from
in fact afford Alitalia a
Malpensa airport, will

(1) OJ L 240, 24.8.1992, p. 8.
(2) OJ L 228, 9.9.1996, p. 1.

(3) OJ L 337, 12.12.1998, p. 42.

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competitive advantage. This competitive advantage
will exist as long as Malpensa airport does not enjoy
a level of access infrastructures such as to overcome
the present situation which leads to consumer reluc-
tance to use Malpensa airport’ (recital 45).

It also considered that the rules at issue were incompat-
ible with the principle of proportionality inasmuch as:

‘a fully viable and operational hub does not neces-
sarily presuppose the transfer of 11,7 million
passengers on 25 October 1998. A postponement of
the transfer or a gradual transfer of that volume
from 25 October 1998 onwards would be better
suited to that objective and would also reduce the
effect on freedom to provide air services to and from
Milan. Therefore, the Italian rules are not indispens-
able to secure the objective pursued by the Italian
authorities which could be attained with rules less
restrictive of the freedom to provide air services’
(recital 50).

The conclusion of
follows:

the Commission Decision was as

‘In conclusion, the Commission considers that the
traffic distribution rules set out in Decree No 46-T
and Decree No 70-T are not compatible with Article
8(1) of Regulation (EEC) No 2408/92 in so far as
their application is contrary to both the principle of
non-discrimination and the principle of proportion-
ality. It is therefore appropriate to decide, pursuant
to Article 8(3) of Regulation (EEC) No 2408/92, that
Italy may not apply these rules.

This Decision in no way calls into question the right
of Italy to pursue an active airport policy and, more
specifically, the objective of creating a fully viable
and operational hub at Malpensa airport. However,
the traffic distribution rules necessary in order to
achieve that objective must comply with the princi-
ples of Community law as set out above.

the

framework of

Nor is this Decision incompatible with the fact that
the Malpensa 2000 project is a project of common
interest and has been identified as a priority project
trans-European
within the
networks. In this regard, the Commission recalls that
actions by Member States in support of priority
projects in the framework of
the trans-European
networks or designed to create the conditions for the
the objectives pursued by such
achievement of
projects must be fully compatible with Community
law’ (recitals 53, 54 and 55).

(5)

On 9 October 1998, taking into account the Commis-
sion Decision of 16 September 1998 the Italian Minister
for Transport and Shipping adopted a Decree No 101-T
(hereinafter referred to as ‘Decree of 9 October 1998’)
the
laying down transitional measures

regarding

distribution of traffic between the airports forming the
Milan airport system. This Decree provided that:

— Malpensa 2000 would open on 25 October 1998,

— the Decree of 5 July 1996 concerning the distribu-
tion of traffic would not enter fully into force until
after the work on improving the access infrastruc-
tures to Malpensa airport had been completed,

— from 25 October 1998 up to the date of completion
of the work, the Community carriers at Linate would
be able to continue operating there 34 % of the
flights they had operated in the previous season with
a guaranteed minimum of 18 flights per week,
provided that they used aircraft of similar capacity
on the same routes,

— scheduled and non-scheduled intercontinental, inter-
national,
intra-Community, national and regional
services could be operated at Malpensa and Orio al
Serio airports.

(6)

The Decree of 9 October 1998 has entered into force
and has been put into effect.

(7)

(8)

The original plan was for the work on improving the
access infrastructure to be completed by the end of
2000 and that was to be the end of the transitional
period. However, considering that the access infrastruc-
ture for Malpensa airport was about to be completed,
the Italian authorities decided on 12 October 1999 to
transfer the flights concerned from Linate to Malpensa in
two stages: the first was to take place on 15 December
1999 and concerned 236 weekly flights; the second, on
15 January 2000, concerned the 230 weekly flights
remaining.

On 25 November 1999 the Italian Minister for the
Environment issued a Decree (hereinafter referred to as
‘Decree of 25 November 1999’) on assessment of the
impact of Malpensa airport on the environment. From
this Decree it can be seen in particular that the noise
standards are not being complied with in the municipali-
ties adjacent to the airport and that this situation would
be exacerbated by the increased traffic caused by the
proposed transfers of flights. Accordingly the Decree
provides for various measures to reduce noise pollution,
such as traffic restrictions, new procedures for runway
use or prohibiting the use of certain types of aircraft. At
the same time, the Italian authorities, in line with the
wishes of the city of Milan and the Lombardy region,
expressed an interest in Linate airport acting as a city-
airport
in the future, which would eventually mean
bringing back flights from Malpensa to Linate.

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(9)

On 13 December 1999 the Italian Prime Minister
adopted a Decree (hereinafter referred to as ‘Decree of
13 December 1999’), expressly referring to the Decree of
25 November 1999,
in which on the one hand he
confirmed the transfer of flights planned to take place as
from 15 December 1999 and on the other hand he
decided to implement a set of measures to reduce the
environmental pollution caused by Malpensa airport.
These measures are described in detail
in Annexes A
(Immediate measures regarding operating conditions), B
(Immediate reduction and control measures), C (Later
reduction and control measures) and D (Medium-term
measures) to the Decree.

(10) On 14 December 1999 the Italian Government decided

to suspend the transfer operations sine die.

II

(11) On 3 March 2000, the Italian Minister for Transport and
Shipping adopted a Decree (hereinafter called ‘Decree of
3 March 2000’) determining the distribution of traffic
between the airports belonging to the airport system of
Milan.

(12)

the Minister then considers that

In the Decree,
‘the
[Italian] Council of Ministers, at the same meeting on 25
February 2000, reaffirmed the strategic importance of
Malpensa's hub infrastructure’ and that ‘at the aforesaid
meeting of
the [Italian] Council of Ministers on 25
February 2000, and during the conclusion of the afore-
said programme framework agreement, the requirements
set out in points A, B and C of the Annex to the
13
aforementioned
December 1999 were endorsed’. He also considers that it
is ‘expedient to realise the full development potential of
the Milan Malpensa hub, and to identify Milan Linate as
an infrastructure for point-to-point connections, by
virtue of which Ministerial Decree No 46-T, which
currently governs the distribution of traffic between the
airports belonging to Milan's airport system, needs to be
supplemented and amended’.

Prime Ministerial Decree

of

(13)

The operative provisions of the Decree of 3 March 2000
therefore read as follows:

‘Article 1

1.
The provisions of this Decree on the distribu-
tion of air traffic within the airport system of Milan,
following the endorsement of the requirements set
out in points A, B and C of the Annex to the Prime
Ministerial Decree of 13 December 1999 referred to
in the preamble, shall be applicable as from 20 April
2000.

Article 2

Intercontinental,

1.
intra-
Community, national and regional connections, both
scheduled and non-scheduled, may be operated from

international,

the airports of Malpensa, Linate and Bergamo Orio
al Serio, which belong to Milan's airport system,
within the limits of those airports' individual oper-
ating capacity and in accordance with the provisions
of Articles 3 and 4.

Article 3

Connections may be operated from Milan
1.
Malpensa taking into account the airport's operating
arrangements as indicated in the preamble.

Article 4

1.
From Linate, Community carriers may, using
narrow-body (single-aisle) aircraft, operate point-to-
point scheduled connections with other airports in
the European Union identified on the basis of
passenger
and
departing, registered within Milan's airport system in
the calendar year 1999, and not exceeding the limits
set out below:

both arriving

volumes,

traffic

(a) one daily return service per carrier, using two
time slots,
individual
exceeding
airports with
350 000 units and not exceeding 700 000 units;

systems or
traffic

to airport

passenger

(b) two daily return services per carrier, using four
individual
time slots,
airports with
exceeding
700 000 units and not exceeding 1 400 000
units;

systems or
traffic

to airport

passenger

(c) three daily return services per carrier, using six
individual
time slots,
airports with
exceeding
1 400 000 units and not exceeding 2 800 000
units;

systems or
traffic

to airport

passenger

(d) no limit for connections to airport systems or
traffic in

individual airports with passenger
excess of 2 800 000 units.

2.
From Linate, Community carriers may, with
the arrangements set out in paragraph 1, operate a
daily return service using two time slots to airport
systems or individual airports located in “Objective
1” regions which in the course of the calendar year
1999 registered passenger
than
350 000 units in Milan's airport system.

traffic of

fewer

Linate

3.
aviation.’

airport may be used for general

(14)

It is important to point out that the maximum handling
capacity of the Milan region air traffic control centre at
the time that the Decree was adopted amounted to 83
movements per hour for Malpensa and Linate airports
together.

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III

(15) On 16 March 2000 the carriers Air France, Aer Lingus,
British Airways, Finnair, Iberia, Lufthansa, Maersk Air,
Olympic Airways, Sabena, Scandinavian Airlines System
(SAS) and TAP Air Portugal (hereinafter referred to as
‘the carriers’) submitted to the Commission a joint
request asking it to:

gates to deal with peak-time departures and arrivals.
Also, the number of aircraft parking areas available
is low compared with the airport's claimed capacity
of 70 movements per hour. In addition, most of the
non-Community carriers previously assigned to
Malpensa Terminal 2 to prevent congestion in
Terminal 1 have been reassigned to Terminal 1,
which can only add to the congestion.

— oppose the implementation of

the Decree of 3

March 2000 by the Italian authorities,

(18)

— declare that all European air carriers must be allowed
to operate at Linate airport without restriction,

The carriers conclude that the measures restricting the
freedom to provide air transport services laid down in
the Decree of 3 March 2000 are not necessary to attain
the Decree's objective, i.e. ‘to realise the full development
potential of the Milan Malpensa hub’, for one thing
because this potential itself is uncertain and disputed and
for another because Malpensa airport is already being
operated to its maximum capacity.

(19)

The carriers claim that the principle of proportionality is
being disregarded secondly in that
the objective of
promoting Malpensa airport clashes with the criteria set
out in the Decree of 3 March 2000. The Decree limits
the number of flights operated by each carrier on a
particular route, but not the total number of flights on
the route. The Decree is therefore unlikely to change the
total volume of traffic at Linate airport, as is clear from
the flood of requests for slots at that airport. The carriers
add that in any case the restrictions on operating at
Linate airport, in particular the limit to one flight per
day and per carrier on certain routes and to use of
single-aisle aircraft, are disproportionate to the objective
since they are tantamount
to a ban on non-Italian
companies from operating air services profitably at
Linate. The objective could be achieved by rules which
take better account of carriers' rights.

(20) With regard to the principle of non-discrimination, the
carriers maintain that the disputed distribution rules are
designed to allow Alitalia to continue operating the
connection between Linate airport and its Fiumicino hub
without restriction.

(21) As regards, secondly, the Decision of 15 July 1997, the
carriers recall that the Decree of 3 March 2000,
in
granting Alitalia priority at Linate airport, infringes the
provisions of that Decision whereby Alitalia may not be
given priority in any way over other Community
carriers, in particular as regards traffic rights, slot alloca-
tion, ground-handling assistance and access to airport
facilities.

— in the alternative, require the Italian authorities to
apply traffic distribution rules guaranteeing each
to operate at
European carrier at
Linate airport, the possibility of carrying out a suffi-
cient number of flights there to be able to pursue a
profitable economic activity, and the freedom to
choose those routes on which it wishes to operate
the number of flights allowed.

the right

least

(16)

In support of their complaint the carriers maintain that
the Decree of 3 March 2000 infringes both Article 8(1)
of Regulation (EEC) No 2408/92 and the Decision of 15
July 1997 by which the Commission authorised the
recapitalisation of Alitalia (4).

(17) As regards,

first, Regulation (EEC) No 2408/92,

the
carriers assert that the principles of proportionality and
non-discrimination are being ignored by the Italian
authorities, claiming that the proportionality principle is
being disregarded primarily due to Malpensa airport's
inability to absorb all of the traffic assigned to it by the
Decree of 3 March 2000. In short, they emphasise that:

— it is still unknown what impact the environmental
restrictions
the Decree of 25
November 1999 and the Decree of 13 December
1999 will have on the present and future capacity of
Malpensa airport,

introduced by

— even before the Decree of 25 November 1999
imposed environmental restrictions, the Italian Asso-
ciation of Air Traffic Controllers (LICTA) had put the
true capacity of Malpensa airport at 58 movements
per hour, taking into account safety restrictions. The
‘Ente Nazionale per l'Aviazone Civile’
(ENAC) and
the ‘Ente Nazionale di Assistenza al Volo’ (ENAV),
themselves bodies belonging to the Italian adminis-
tration, also stated that a capacity of 70 movements
per hour depended on a number of conditions being
met,

— besides the impact of environmental measures, there
are other factors which raise doubts as to Malpensa
airport's ability to absorb future traffic volumes. For
example, the airport does not have enough boarding

(4) OJ L 322, 25.11.1997, p. 44.

(22)

The Commission formally acknowledged receipt of this
joint request on 29 March 2000.

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IV

(27)

The Commission acknowledged receipt of this request
on 29 March 2000.

(23) On 16 March 2000, Austrian Airlines submitted a sepa-

rate request to the Commission asking it to:

V

— declare that the rules of traffic distribution between
Milan's airports as laid down in the Decree of 3
March 2000 are incompatible with Community law,
in particular with Regulation (EEC) No 2408/92,

— decide that the Italian authorities cannot apply these
rules in respect of Austrian Airlines and must adopt
other rules compatible with Community law,

— order the Italian authorities not to apply these rules
in respect of Austrian Airlines at any rate until the
Commission had pronounced on the merits of its
complaint.

(24)

In support of its request, Austrian Airlines claims that
the principles of non-discrimination and proportionality
are being flouted by the Italian authorities.

(28) On 11 April 2000, the Italian authorities decided to give
priority to Malpensa airport for the allocation of slots.
For summer 2000 and winter 2000/2001 the capacity
at Malpensa declared by the Assoclearance association,
acting as coordinator for Italian airports, was 70 move-
ments per hour. Moreover, as the Italian authorities
stated in their letter to the Commission of 5 December
2000, the coordination committee of Linate airport has
set the capacity of that airport at 13 movements per
hour at peak times and up to 20 movements per hour at
other times. In view of the restriction to 83 movements
per hour maximum for air traffic in the Milan area and
the maximum capacity of 70 movements per hour
adopted by the Italian authorities for Malpensa airport,
as well as the priority given to the latter airport, the
number of slots available at Linate airport is reduced to
13 at peak times.

for

(25) As regards discrimination first of all, Austrian Airlines
asserts that the rules of distribution laid down in the
Decree of 3 March 2000, based on annual passenger
thresholds
each destination, actually introduce
discrimination between Community carriers. Thus, due
to the minimum threshold of 350 000 passengers
annually and although it has operated at Linate airport
for more than 40 years, Austrian Airlines, together with
the carrier SAS, will be the only Community company
which can no longer connect Linate to one of its hubs.
This is discrimination on grounds of identity of the
carrier.

(29)

(30)

VI

By letter dated 20 April 2000, the German authorities
requested the Commission pursuant to Article 8(3) of
Regulation (EEC) No 2408/92 to define its position with
regard to the traffic distribution rules laid down in the
Decree of 3 March 2000.

The Austrian, Danish and Swedish authorities addressed
similar requests to the Commission on 26 April, 9 May
and 11 May 2000 respectively. By letter dated 18 May
2000, received by the Commission on the 26 May
2000, the Norwegian authorities stated that they shared
the concerns of the Danish and Swedish authorities.

(26)

Then as regards proportionality, Austrian Airlines main-
tains that the thresholds laid down by the Decree of 3
March 2000 lack objectivity and are disproportionate.
For example, connections with more than 2,8 million
passengers annually can be operated without any restric-
tion on the numbers of flights, with no flights at all
allowed on routes with less than 350 000 passengers a
year. The criterion favouring Objective 1 regions also
lacks objectivity. The disproportionality is aggravated by
the fact that the restrictions are fixed by carrier so that
the number of flights on a route is potentially higher the
more carriers there are present. Incidentally, it is ques-
tionable whether,
the environmental
in the light of
measures provided for in the Decrees of 25 November
and 13 December 1999, Malpensa airport has sufficient
capacity to receive the additional traffic. The proposed
reduction in the number of slots available at Linate will
cause even more carriers to transfer their operations to
Malpensa. In reality there is sufficient room at Linate
airport for the traffic to be distributed fairly among all
the carriers.

(31)

Finally, on 12 July 2000 the Belgian authorities asked
the Commission to comment as soon as possible on the
complaints lodged by the airline companies.

VII

(32) As part of its examination of this case pursuant to the
procedure laid down in Article 8(3) of Regulation (EEC)
No 2408/92 and in order to safeguard the rights of
defence, on 21 March 2000 the Commission sent the
Italian authorities the complaints lodged by the carriers
on 16 March 2000, asking them for their comments.
For the same purpose, on 14 June 2000 the Commis-
sion sent the Italian authorities the requests made by
Germany, Austria, Sweden and Norway.

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Official Journal of the European Communities

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(33)

By letter dated 5 April 2000, the Italian authorities sent
the Commission their comments on the complaints
lodged by the carriers on 16 March 2000. These
comments include the following:

— within the framework of

its powers pursuant

to
Article 8(3) of Regulation (EEC) No 2408/92, the
Commission may not penalise a failure to comply
with the principle of proportionality which is not
referred to in paragraph 1 of that Article,

— the arguments developed by the carriers to call into
question the capacity of Malpensa airport are
unfounded. Thus:

— the model devised for utilisation of Malpensa
airport is flexible enough to allow that airport to
offer sufficient capacity to cope with the traffic
envisaged by the Decree of 3 March 2000. The
model may also be gradually improved, espe-
cially during the period from 26 March to 20
April 2000,

— the text itself of the Decree of 3 March 2000
indicates that the Decree was adopted after an
initial positive examination of the impact of the
environmental measures on the capacity of the
airport. As regards noise in particular, a powerful
mathematical forecast model was prepared,

— introducing the non-specialised use of runways
and changing the take-off paths do not adversely
affect the capacity of Malpensa airport. There are
restrictions on using reverse thrust at most Euro-
pean airports,

— with the new equipment, especially the radar,
and the new procedures applicable at Malpensa it
will be possible to achieve the target capacity for
utilisation of the airport,

— only an insignificant number of

flights are
affected by the curfew measure imposed at
Malpensa and the curfew has no effect on the
capacity of the airport,

(34)

— the capacity of an airport has to be assessed over
a whole day (24 hours) and not by referring to
its peak-time capacity. The transfer of certain
non-Community companies from Terminal 1 to
Terminal 2 does not make the situation any
worse since it takes account of the fact that the
Decree of 3 March 2000 keeps more traffic at
Linate than that of 5 July 1996.

According to the Italian authorities, the principle of
proportionality has not been disregarded, especially
since there can be no doubt that the traffic distribution
measure at issue is indispensable to the development of
the Malpensa hub and that it is more favourable to all

the air carriers than that previously envisaged by the
Decree of 5 July 1996.

to the

airport had not

— In its Decision of 16 December 1998 concerning the
Decree of 5 July 1996, the Commission considered
the principle of proportionality to have been
infringed solely because the road and rail access
infrastructures
been
completed. This matter has now been resolved and
the limitations to market access arising out of the
Decree of 3 March 2000 are less severe than those
imposed by the Decree of 5 July 1996. The Commis-
sion has, incidentally, never criticised the distribution
criteria based on traffic thresholds.
the
distribution rules in the Decree of 3 March 2000
ensure that an optimum balance is kept between the
imperative of developing the Malpensa hub and
better utilisation of Linate airport for all European
carriers.

In fact,

— The traffic distribution measure at issue here is not
discriminatory at all since the Community carriers
enjoy better access to Linate airport than with the
previous distribution rules, the work on improving
the airport's road and rail access infrastructures has
been completed and Alitalia has made Malpensa
airport the centre of gravity of its international and
intercontinental operations.

— The Commission Decision of 15 July 1997 is not
infringed by the distribution rules laid down in the
Decree of 3 March 2000 since this Decree does not
deal with slot allocation and the Commission has
based on
never
passenger traffic thresholds.

distribution criteria

disputed

VIII

To enable it to decide on this case in full knowledge of
the facts, on 13 June 2000 the Commission sought the
assistance of an expert, having previously verified his
independence in respect of all the parties to the case.
The expert's brief was on the one hand to determine the
capacity of Malpensa airport taking into account the
impact of the environmental measures resulting from
the Decree of 13 December 1999, and on the other
hand to ascertain whether the airport capacity so deter-
mined was compatible with the likely traffic growth. The
expert submitted his report on 26 July 2000. The report
basically shows that:

— several of the environmental measures laid down in
the Decree of 13 December 1999, such as reducing
the take-off thrust of aircraft, restricting the use of
reverse thrust of engines and using runways alter-
nately, are not or only partially being complied with
in practice,

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— reducing the take-off thrust of aircraft, though it may
have safety implications, and excluding Chapter 3
aircraft have no effect whatever on the capacity of
the airport,

— works to make possible better utilisation of
in particular

the
Malpensa airport
the
infrastructure,
terminal building and air-side infrastructures, are
planned at Malpensa over the next four years.

— when no restrictions are placed on it by the environ-
mental measures, in normal weather the capacity of
Malpensa airport does not exceed 65 movements per
hour during a three-hour period. A threshold of 70
movements per hour may be reached for one hour
on one or two days during the summer peak period,

— the theoretical maximum capacity of Linate airport is
32 slots per hour and 8 million passengers annually
considering the amount of space available at the
airport. Capacity there is currently restricted to 13
movements per hour, due partly to the restrictions
affecting the Milan region air traffic control centre
and partly to the limited capacity of the terminal
building,

— due to the range of choice and the cost of using the
terrestrial access infrastructures to Malpensa airport,
the location of this airport in relation to the centre
of Milan can no longer be considered a handicap or
a reason why users should prefer Linate airport,

— the capacity of the Milan region air traffic control
centre should increase from 83 to 90/95 movements
per hour in the next 12 months.

(35)

In order to safeguard the rights of the defence (5), on 27
July 2000 the consultant's report was sent
to Italy.
Those Member States which had requested the Commis-
sion to take action and the carriers that had lodged a
complaint also received a copy.

(36)

By letter dated 4 August 2000, the Italian authorities
sent the Commission their comments on the expert's
report. These can be summarised as follows:

— in spite of the anti-noise measures taken at Malpensa
airport, the delays recorded there are still compatible
with those at the other Community airports,

— the present traffic at Malpensa is compatible with the
minimum acoustic impact scenario as presented to
the Italian Council of Ministers on 25 February
is constantly
2000. The airport utilisation model
changing to maintain an optimum balance between
maximum capacity of the airport and compliance
with the anti-noise measures. Other major airports
use an alternating runway utilisation model like that
at Malpensa. Neither the prohibition of night flights
nor the reduction of
is affecting
airport capacity,

take-off

thrust

(5) Case T-260/94 Air Inter v Commission [1997] ECR II-997, paragraph

63.

(37)

By letter dated 31 August 2000, the carriers Air France,
Aer Lingus, British Airways, Finnair, Iberia, Lufthansa,
Maersk Air, Olympic Airways, Sabena, Scandinavian
Airlines System (SAS) and TAP Air Portugal sent the
Commission their comments on the expert's report. On
14 September 2000, Austrian Airlines also communi-
cated to the Commission its comments on the expert's
report.

IX

(38) After examining the preceding points and following
contact between the Commission and the Italian author-
ities, the latter informed the Commission, by letter of 4
December 2000, of their intention to instruct the ENAC
to increase the capacity at Linate airport to 18 move-
ments per hour, given the increase in processing
capacity of the air traffic control centre for the Milan
area. The additional frequencies allocated as a result can
In that same
be subject of code-sharing agreements.
letter, the Italian authorities also indicated that they were
about to adopt a new decree on air traffic distribution
between the airports that make up the Milan airport
system. This new decree will amend the decree of 3
March 2000 as follows:

— all European capitals will now have at least one

return trip connection per day with Linate,

— Community airports with annual traffic of more than
40 million passengers in 1999 will be connected to
Linate by at least two return trips per day,

— by the end of 2001 Italy will check the functioning
the traffic distribution rules within the Milan

of
airport system.

LEGAL ASSESSMENT

X

(39) As regards the distribution of traffic between airports in
an airport system, the Commission holds the powers
conferred upon it by Article 8(3) of Regulation (EEC) No
2408/92, which reads as follows:

‘At the request of a Member State or on its own
initiative the Commission shall examine the applica-
tion of paragraphs 1 and 2 and, within one month
of receipt of a request and after consulting the
Committee referred to in Article 11, decide whether
the Member State may continue to apply the
measure …’.

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(40)

For the purpose of applying these provisions, the letters
addressed to the Commission on 20 April, 26 April, 9
May, 11 May and 12 July 2000 by the German,
Austrian, Belgian, Danish and Swedish authorities have
to be considered as requests from Member States.
the Commission is obliged to examine
Accordingly,
these requests and to decide whether Italy can be author-
ised to continue applying the Decree of 3 March 2000
regulating the distribution of traffic within the airport
system of Milan.

(41) Moreover, irrespective of the requests submitted by these
five Member States, the Commission considers it neces-
sary to use those powers for the same purposes. Where
the Commission does so on its own initiative, as expli-
citly provided for in Article 8(3) of Regulation (EEC) No
2408/92,
its examination is no way limited to the
requests of the carriers.

(42)

Because Regulation (EEC) No 2408/92 was brought
within the scope of the EEA Agreement with effect from
1 July 1994 (6) by Decision of the EEA Joint Committee
No 7/94 (7), the Commission's decision must cover all
the countries of the European Economic Area. Norway
has in any event approached the Commission.

XI

(43)

The principle of freedom to operate air services within
the Community provided for in Article 3(1) of Regula-
tion (EEC) No 2408/92 generally means the right of
Community air carriers to choose between the different
airports of an airport system. Member States may,
however, restrict the abovementioned freedom on the
basis of Article 8(1) of Regulation (EEC) No 2408/92,
which reads as follows:

‘This Regulation shall not affect a Member State's
right to regulate without discrimination on grounds
of nationality or identity of
the
distribution of traffic between the airports within an
airport system.’

the air carrier,

(44) As the Commission has already indicated in Decisions
98/710/EC, 95/259/EC and 94/290/EC (8) any restriction
adopted under that provision must comply with the
principle of non-discrimination and the general princi-
ples on the freedom to provide services.

‘By allowing Member States to distribute traffic
between the airports of an airport system, Article
8(1) of Regulation (EEC) No 2408/92 recognises in
principle the legitimacy of an active airport planning
policy which complies with the general principles of
Community law [...]. Such a planning policy may
have regard to a large range of factors considered by
the competent authorities to have priority. The
concrete measures which must be taken for the
implementation of airport planning policy may also
differ from one airport system to another. All those
implementing measures will, if they are to be effec-
tive, restrict to some extent access to the individual
airports of the system. It would be inconsistent with
those considerations if the scope of Article 8(1) were
determined in such a way as to exclude a priori the
possibility of pursuing a specific airport policy for a
given airport system. For example, a Member State
may legitimately wish to promote the development
of one airport of an airport system at the expense of
the other airports located therein. In such a case, the
imposition of restrictions on access to those other
airports alone may constitute a reasonable means of
pursuing that objective.’

(46)

the Council considered that

The principle of non-discrimination as
explicitly
mentioned in Article 8(1) not only prohibits any form of
discrimination based on the air carrier's nationality, thus
reflecting the principle laid down by Article 6 of the
Treaty, but also any form of discrimination on grounds
In adopting Regulation
of identity of the air carrier.
(EEC) No 2408/92,
the
absence of discrimination on grounds of the carrier's
nationality was not sufficient, in view of the structure of
air transport in the Community, to ensure the satisfac-
tory working of the internal market in civil air transport
and to ensure compliance with the principle of free
access to the market laid down in Article 3(1) of that
Regulation. Consequently,
it added the prohibition of
discrimination on grounds of the air carrier's identity,
which was expressly referred to by the Court of First
Instance of the European Communities in the judgment
it delivered on 19 June 1997 (Air Inter v Commission) (9).

XII

(45)

In this context, the Commission has already had occa-
sion to define the scope of Article 8(1) of Regulation
(EEC) No 2408/92, stating in its Decision 95/259/EC
that:

(6) OJ C 208, 28.7.1994, p. 7.
(7) OJ L 160, 28.6.1994, p. 1.
(8) OJ L 337, 12.12.1998, p. 42 (51-52), OJ L 162, 13.7.1995, p. 25

(30-31) and OJ L 127, 19.5.1994, p. 22 (28-31).

(47)

Consequently, for the purposes of verifying whether the
traffic distribution rules laid down in the Decree of 3
March 2000 comply with Article 8(1) of Regulation
it falls first and foremost to the
(EEC) No 2408/92,
Commission to assess their compatibility with the prin-
ciple of non-discrimination and with the principle of
proportionality.

(9) Case T-260/94 cited in footnote 5, paragraph 112.

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(48)

The Commission considers that the criteria set out in
Article 4 of the Decree of 3 March 2000, based on
traffic volumes, are objective criteria which do not
distinguish carriers by reference to their nationality or
identity since they apply in the same way to all
intra-Community
Community air
connections concerned are open to all Community
carriers without restriction pursuant to Article 3(1) of
Regulation (EEC) No 2408/92. The same applies to the
obligation to use only single-aisle aircraft for operating
at Linate airport and the exception made by Article 4(2)
of the Decree to the benefit of Objective 1 regions.

and the

carriers

(49) However, as already stated by the Commission in
Decisions 95/259/EC (10) and 98/710/EC (11), the prin-
ciple of non-discrimination set out in Article 8(1) also
precludes any measure which, even without explicitly
making reference to the carrier's nationality or identity,
in practice nonetheless produces discriminatory effects,
even indirectly.

(50)

(51)

(52)

In order to determine whether the criteria set out in the
Decree of 3 March 2000 produce discriminatory effects
in practice, it is necessary to examine the effects which
will be produced by their application from 20 April
2000 onwards.

In its Decision 98/710/EC (12), the Commission consid-
ered that the criteria laid down in the Decree of 5 July
1996 gave Alitalia a competitive advantage as the only
company able to serve its hub at Rome-Fiumicino from
Linate airport due to the differences in access conditions
between Linate and Malpensa airports. From that
it
concluded that the measure at issue would continue to
be discriminatory as long as the access infrastructures to
Malpensa airport were not
to overcome
passengers' reluctance to use Malpensa airport.

sufficient

The Commission considers that with the road and
railway works completed in recent years it can be said
that access to Malpensa airport is no longer a handicap
for users trying to reach Malpensa. The expert appointed
by the Commission also stresses the fact that Linate
airport is poorly served by the public transport networks
and considers that Malpensa airport's location in relation
to Milan city centre is no longer to be regarded as a
reason for users to prefer Linate airport. Given the
assessment it already made of the situation with the two
airports
the
Commission has no new reasons to justify concluding
that conditions for access to Linate airport offer an
advantage compared with those for Malpensa.

in its previous Decision 98/710/EC,

(10) OJ L 162, 13.7.1995, p. 25.
(11) OJ L 337, 12.12.1998, p. 52, recital 30.
(12) OJ L 337, 12.12.1998, p. 55, recital 45.

(53)

Therefore, the Commission considers that the applica-
tion of the criteria set out in the Decree of 3 March
2000 should not in practice produce any discriminatory
effects and that these criteria are compatible with the
principle of prohibiting discrimination on grounds of
nationality or identity of the air carrier as provided for
in Article 8(1) of Regulation (EEC) No 2408/92.

In this respect,

(54) Nonetheless, the proportionality of the measure adopted
by the Italian authorities on 3 March 2000 should still
be verified.
it has to be ensured in
accordance with settled case law that the provisions at
issue are appropriate to ensure achievement of
the
intended aims and do not go beyond that which is
necessary in order to achieve those objectives; in other
words, it must not be possible to obtain the same results
by less restrictive rules.

(55)

It is therefore important to recall the objectives pursued
by the rules at issue. In adopting the Decree of 3 March
2000, the Italian authorities, having affirmed ‘the stra-
tegic importance of Malpensa's hub infrastructure’,
wished both to ‘realise the full development potential of
the Milan Malpensa hub, and to identify Milan Linate as
an infrastructure for point-to-point connections’. They
therefore deemed it necessary to amend the rules laid
down in the Decree of 5 July 1996, the sole purpose of
which was to ensure the viability of the Malpensa hub in
the framework of the Malpensa 2000 project.

(56) As recalled above, the Commission recognised in its
Decision 95/259/EC of 14 March 1995, that Article 8(1)
of Regulation (EEC) No 2408/92 confirms the legitimacy
of an active airport planning policy. Such a planning
policy may have regard to a large range of
factors
considered by the competent authorities to have priority.
The transformation of Malpensa airport
into a fully
operational and viable hub (13) and the promotion of
Linate airport as a privileged infrastructure for point-to-
point connections are certainly objectives which can
legitimise traffic distribution rules. This principle needs
to be examined in the light of the two objectives in turn.

(57) As a preliminary, rules establishing access thresholds
based on traffic volumes may be needed to reduce the
level of traffic at Linate and thus to meet the objective of
promoting Malpensa as an economically viable hub
while allowing Linate to be converted into an airport
specialising in ‘point-to-point’ connections. As stated
in its
above, the Commission has already recognised,
Decision 95/259/EC,
such an
approach with Regulation (EEC) No 2408/92.

the compatibility of

(13) On this point, see Decision 98/710/EC,

(OJ L 337, 12.12.1998,

p. 57).

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(58) As regards, first of all, the transformation of Malpensa
airport into a fully operational and viable hub, there is a
need to look at whether the measures laid down in the
Decree of 3 March 2000 are necessary for realising this
objective on account of the restrictions on the number
of slots available imposed at Linate airport. For the
summer 2000 and winter 2000/2001 seasons,
the
maximum capacity of Linate is set at 20 movements per
hour and even reduced to 13 at peak times. The number
of slots used per hour at Malpensa airport is currently
around 60 on average, and could rise to 70 at peak
times. The disproportion between the number of slots
used at Linate and Malpensa respectively, together with
the preference given to Malpensa with regard to peak-
time slots, could at first sight be sufficient to guarantee
the development of Malpensa airport. In addition, if it is
true that the study carried out by the independent expert
appointed by the Commission indicates that the limita-
tion in frequencies at Linate foreseen by the Decree of 3
March 2000 bears the risk that Malpensa airport will
reach saturation point, the Italian authorities in their
letter of 4 December 2000 confirmed that the capacity
at Malpensa was established at 70 movements per hour
in the current phase of the development of the hub.

(59)

Following the modifications to which the Italian authori-
ties made reference in their letter to the Commission of
4 December 2000, the new draft rules modify this first
appreciation. In fact, 18 slots an hour will be guaranteed
from now at Linate, including peak periods. This makes
it necessary to establish criteria for the distribution of
traffic because this increase in traffic would put the
development of the Malpensa hub in jeopardy if this
increase was not accompanied by other forms of restric-
tions.

(60)

It follows from the above that the restrictions on the
freedom to provide services imposed on Linate airport
by the measure at issue will respond to the objective of
exploiting fully the potential for the development of
Malpensa hub when they have been modified in the
manner indicated by the Italian authorities in their letter
of 4 December 2000.

(63) On a first examination, those criteria do not appear to
the Commission, on the basis of their practical applica-
tion, to be wholly adequate for achieving this objective.
As the complaining carriers point out, the minimum
traffic threshold of 350 000 passengers laid down in
Article 4 of the Decree of 3 March 2000 does not allow
arrivals or departures from Community airports as large
as Vienna or Copenhagen to be handled at Linate
airport. In addition, such an important airport as Frank-
furt is only linked by one flight a day per carrier while
no limit on the number of frequencies per carrier is
foreseen on liaisons where traffic exceeds 2,8 million
passengers.

(64) However, the modifications to which the Italian authori-
ties refer in their letter of 4 December 2000 have the
effect of lifting the previous obstacles and are now in
proportion to the objective of making Linate a destina-
tion for point-to-point traffic since the increase in the
number of slots available will favour services to destina-
tions other than Rome. In addition, these modifications
will also mean that Vienna and Copenhagen will, from
now on, be linked to Linate and the number of daily
liaisons to Community airports with annual traffic of
more than 40 million passengers in 1999 will be at least
two. They therefore make the measure in question
appreciably more adequate to satisfy the objective of
making Linate a point-to-point destination linked to the
principal destinations. Finally, the fact that the traffic
distribution rules will be re-examined before the end of
2001 would allow account to be taken of the evolution
of the situation at Linate and at Malpensa, and especially
the future increase in the handling of capacity at the air
traffic control centre in the Milan area. This makes the
whole of the package proportionate to this evolution.

(65)

In these conditions, the Commission considers that the
traffic distribution rules within the airport system of
Milan, as amended in accordance with the measures
announced by the Italian authorities in their letter of 4
December 2000, can be regarded as proportionate to the
objectives sought. The Commission takes note of the
commitment by Italy to reevaluate the situation before
the end of 2001.

(61)

Independently of this observation, nothing prevents the
Italian authorities from wanting to reserve Linate airport
mainly for certain categories of
in particular
point-to-point traffic, and laying down distribution rules
accordingly.

traffic,

XIII

Conclusion

(62) As regards, secondly, promoting Linate airport as a priv-
ileged infrastructure for point-to-point connections, the
Commission accepts that to reach this objective there
may have to be criteria limiting the number of flights
per route on the basis of traffic thresholds, such as those
laid down in the Decree of 3 March 2000.

(66)

In conclusion, the Commission considers that the traffic
distribution rules set out in the Decree of 3 March 2000,
if they are amended as indicated in the Italian authori-
ties'
letter of 4 December 2000, are compatible with
Article 8(1) of Council Regulation (EEC) No 2408/92. It
is therefore appropriate to decide, pursuant to Article
8(3) of Regulation (EEC) No 2408/92, that Italy may
apply those rules as thus amended,

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HAS ADOPTED THIS DECISION:

Article 2

Article 1

This Decision is addressed to the Italian Republic.

Italy may apply the traffic distribution rules for the airport
system of Milan set out in the Decree of the Italian Minister for
Transport and Shipping of 3 March 2000 on condition that
these rules are modified, within fifteen days following the
notification of this Decision, as indicated in the letter of 4
December 2000 from the Italian authorities to the Commis-
sion.

Done at Brussels, 21 December 2000.

For the Commission

Loyola DE PALACIO

Vice-President