The Queen, on the application of International Air Transport Association and European Low Fares Airline Association v Department for Transport.
Date: 2006-01-10
24. It is settled case-law that a reference from a national court may be refused only if it is quite obvious that the interpretation of Community law sought bears no relation to the actual facts of the main action or to its purpose, or where the problem is hypothetical or the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (see, inter alia, Case C-415/93 Bosman  [1995] ECR I-4921, paragraph 61; Case C‑105/94 Celestini  [1997] ECR I-2971, paragraph 22; and Case C-355/97 Beck and Bergdorf  [1999] ECR I-4977, paragraph 22). Save for such cases, the Court is, in principle, bound to give a preliminary ruling on questions concerning the interpretation of Community law (see Bosman , paragraph 59).
27. It is settled case-law that national courts do not have the power to declare acts of the Community institutions invalid. The main purpose of the jurisdiction conferred on the Court by Article 234 EC is to ensure that Community law is applied uniformly by national courts. That requirement of uniformity is particularly vital where the validity of a Community act is in question. Differences between courts of the Member States as to the validity of Community acts would be liable to jeopardise the very unity of the Community legal order and undermine the fundamental requirement of legal certainty (Case 314/85 Foto-Frost  [1987] ECR 4199, paragraph 15; Case C-27/95 Bakers of Nailsea  [1997] ECR I-1847, paragraph 20; and Case C-461/03 Gaston Schul Douane-expediteur  [2005] ECR I‑0000, paragraph 21). The Court of Justice alone therefore has jurisdiction to declare a Community act invalid (Joined Cases C-143/88 and C-92/89 Zuckerfabrik Süderdithmarschen and Zuckerfabrik Soest  [1991] ECR I-415, paragraph 17, and Case C-6/99 Greenpeace France and Others  [2000] ECR I‑1651, paragraph 54).
28. Article 234 EC does not constitute a means of redress available to the parties to a case pending before a national court and therefore the mere fact that a party contends that the dispute gives rise to a question concerning the validity of Community law does not mean that the court concerned is compelled to consider that a question has been raised within the meaning of Article 234 EC (see, to this effect, Case 283/81 Cilfit  [1982] ECR 3415, paragraph 9). Accordingly, the fact that the validity of a Community act is contested before a national court is not in itself sufficient to warrant referral of a question to the Court for a preliminary ruling.
29. The Court has held that courts against whose decisions there is a judicial remedy under national law may examine the validity of a Community act and, if they consider that the arguments put forward before them by the parties in support of invalidity are unfounded, they may reject them, concluding that the act is completely valid. In so doing, they are not calling into question the existence of the Community act ( Foto-Frost , paragraph 14).
30. On the other hand, where such a court considers that one or more arguments for invalidity, put forward by the parties or, as the case may be, raised by it of its own motion (see, to this effect, Case 126/80 Salonia  [1981] ECR 1563, paragraph 7), are well founded, it is incumbent upon it to stay proceedings and to make a reference to the Court for a preliminary ruling on the act’s validity.
31. In addition, the spirit of cooperation which must prevail in the operation of the preliminary reference procedure means that the national court is to set out in its order for reference the reasons why it considers such a reference to be necessary.
34. By its first question, the referring court essentially asks whether Article 6 of Regulation No 261/2004 is inconsistent with Articles 19, 22 and 29 of the Montreal Convention.
35. Article 300(7) EC provides that ‘agreements concluded under the conditions set out in this Article shall be binding on the institutions of the Community and on Member States’. In accordance with the Court’s case-law, those agreements prevail over provisions of secondary Community legislation (Case C-61/94 Commission  v Germany  [1996] ECR I-3989, paragraph 52, and Case C-286/02 Bellio F.lli  [2004] ECR I-3465, paragraph 33).
36. The Montreal Convention, signed by the Community on 9 December 1999 on the basis of Article 300(2) EC, was approved by Council decision of 5 April 2001 and entered into force, so far as concerns the Community, on 28 June 2004. Therefore from that last date the provisions of that Convention have, in accordance with settled case-law, been an integral part of the Community legal order (Case 181/73 Haegeman  [1974] ECR 449, paragraph 5, and Case 12/86 Demirel  [1987] ECR 3719, paragraph 7). It was after that date that, by decision of 14 July 2004, the High Court of Justice made the present order for reference in the judicial review proceedings before it.
37. Article 6 of Regulation No 261/2004 provides that, in the event of a long delay to a flight, the operating air carrier must offer to assist and take care of the passengers concerned. It does not provide that the carrier may escape such obligations in the event of extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken.
39. As to those submissions, Articles 19, 22 and 29 of the Montreal Convention are among the rules in the light of which the Court reviews the legality of acts of the Community institutions since, first, neither the nature nor the broad logic of the Convention precludes this and, second, those three articles appear, as regards their content, to be unconditional and sufficiently precise.
40. It is to be noted with regard to the interpretation of those articles that, in accordance with settled case-law, an international treaty must be interpreted by reference to the terms in which it is worded and in the light of its objectives. Article 31 of the Vienna Convention of 23 May 1969 on the Law of Treaties and Article 31 of the Vienna Convention of 21 March 1986 on the Law of Treaties between States and International Organisations or between International Organisations, which express, to this effect, general customary international law, state that a treaty is to be interpreted in good faith in accordance with the ordinary meaning to be given to its terms in their context and in the light of its object and purpose (see, to this effect, Case C-268/99 Jany and Others  [2001] ECR I-8615, paragraph 35).
43. Any delay in the carriage of passengers by air, and in particular a long delay, may, generally speaking, cause two types of damage. First, excessive delay will cause damage that is almost identical for every passenger, redress for which may take the form of standardised and immediate assistance or care for everybody concerned, through the provision, for example, of refreshments, meals and accommodation and of the opportunity to make telephone calls. Second, passengers are liable to suffer individual damage, inherent in the reason for travelling, redress for which requires a case-by-case assessment of the extent of the damage caused and can consequently only be the subject of compensation granted subsequently on an individual basis.
44. It is clear from Articles 19, 22 and 29 of the Montreal Convention that they merely govern the conditions under which, a fter a flight has been delayed, the passengers concerned may bring actions for damages by way of redress on an individual basis, that is to say for compensation, from the carriers liable for damage resulting from that delay.
45. It does not follow from these provisions, or from any other provision of the Montreal Convention, that the authors of the Convention intended to shield those carriers from any other form of intervention, in particular action which could be envisaged by the public authorities to redress, in a standardised and immediate manner, the damage that is constituted by the inconvenience that delay in the carriage of passengers by air causes, without the passengers having to suffer the inconvenience inherent in the bringing of actions for damages before the courts.
46. The Montreal Convention could not therefore prevent the action taken by the Community legislature to lay down, in exercise of the powers conferred on the Community in the fields of transport and consumer protection, the conditions under which damage linked to the abovementioned inconvenience should be redressed. Since the assistance and taking care of passengers envisaged by Article 6 of Regulation No 261/2004 in the event of a long delay to a flight constitute such standardised and immediate compensatory measures, they are not among those whose institution is regulated by the Convention. The system prescribed in Article 6 simply operates at an earlier stage than the system which results from the Montreal Convention.
47. The standardised and immediate assistance and care measures do not themselves prevent the passengers concerned, should the same delay also cause them damage conferring entitlement to compensation, from being able to bring in addition actions to redress that damage under the conditions laid down by the Montreal Convention.
48. Those measures, which enhance the protection afforded to passengers’ interests and improve the conditions under which the principle of restitution is applicable to passengers, cannot therefore be considered inconsistent with the Montreal Convention.
The validity of Article 5 of Regulation No 261/2004 in the light of Article 251 EC
66. It is to be remembered that, while the statement of reasons required by Article 253 EC must show clearly and unequivocally the reasoning of the Community authority which adopted the contested measure, so as to enable the persons concerned to ascertain the reasons for the measure and to enable the Court to exercise its powers of review, it is not required to go into every relevant point of fact and law (see, inter alia, Case C-122/94 Commission  v Council  [1996] ECR I‑881, paragraph 29; Case C-210/03 Swedish Match  [2004] ECR I-11893, paragraph 63; and Joined Cases C-154/04 and C-155/04 Alliance for Natural Health and Others [2005] ECR I-0000, paragraph 133).
67. In addition, the question whether a statement of reasons satisfies the requirements must be assessed with reference not only to the wording of the measure but also to its context and to the whole body of legal rules governing the matter in question. In the case of a measure intended to have general application, as in the main proceedings, the preamble may be limited to indicating the general situation which led to its adoption, on the one hand, and the general objectives which it is intended to achieve, on the other (see, inter alia, Case C-342/03 Spain  v Council  [2005] ECR I‑1975, paragraph 55). If the contested measure clearly discloses the essential objective pursued by the institutions, it would be excessive to require a specific statement of reasons for each of the technical choices made by them (see, inter alia, Case C-100/99 Italy  v Council and Commission  [2001] ECR I‑5217, paragraph 64, and Alliance for Natural Health , paragraph 134).
68. The principle of legal certainty is a fundamental principle of Community law which requires, in particular, that rules should be clear and precise, so that individuals may ascertain unequivocally what their rights and obligations are and may take steps accordingly (see Case 169/80 Gondrand Frères and Garancini  [1981] ECR 1931; Case C-143/93 Van Es Douane Agenten  [1996] ECR I-431, paragraph 27; and Case C-110/03 Belgium  v Commission  [2005] ECR I-2801, paragraph 30).
69. In light of the case-law cited above, it must be stated, first, that Articles 5 and 6 of Regulation No 261/2004 lay down precisely and clearly the obligations owed by an operating air carrier in the event of cancellation of, or a long delay to, a flight. The objective of those provisions is apparent, with equal clarity, from the first and second recitals in the preamble to the regulation, according to which action by the Community in the field of air transport should aim, among other things, at ensuring a high level of protection for passengers and take account of the requirements of consumer protection in general, inasmuch as cancellation of, or long delay to, flights causes serious inconvenience to passengers.
76. However, it must be stated with regard to those submissions, first, that while the preamble to a Community measure may explain the latter’s content (see Alliance for Natural Health , paragraph 91), it cannot be relied upon as a ground for derogating from the actual provisions of the measure in question (Case C-162/97 Nilsson and Others  [1998] ECR I‑7477, paragraph 54, and Case C-136/04 Deutsches Milch‑Kontor  [2005] ECR I-0000, paragraph 32). Second, the wording of those recitals indeed gives the impression that, generally, operating air carriers should be released from all their obligations in the event of extraordinary circumstances, and it accordingly gives rise to a certain ambiguity between the intention thus expressed by the Community legislature and the actual content of Articles 5 and 6 of Regulation No 261/2004 which do not make this defence to liability so general in character. However, such an ambiguity does not extend so far as to render incoherent the system set up by those two articles, which are themselves entirely unambiguous.
78. By its fifth and seventh questions, the referring court asks, in essence, whether Articles 5, 6 and 7 of Regulation No 261/2004 are invalid by reason of an infringement of the principle of proportionality.
79. The principle of proportionality, which is one of the general principles of Community law, requires that measures implemented through Community provisions should be appropriate for attaining the objective pursued and must not go beyond what is necessary to achieve it (see, inter alia, Case C-210/00 Käserei Champignon Hofmeister  [2002] ECR I-6453, paragraph 59; Case C-491/01 British American Tobacco (Investments) and Imperial Tobacco  [2002] ECR I-11453, paragraph 122; and Swedish Match , paragraph 47).
80. With regard to judicial review of the conditions referred to in the previous paragraph, the Community legislature must be allowed a broad discretion in areas which involve political, economic and social choices on its part, and in which it is called upon to undertake complex assessments. Consequently, the legality of a measure adopted in those fields can be affected only if the measure is manifestly inappropriate having regard to the objective which the competent institution is seeking to pursue (see, to this effect, Case C-84/94 United Kingdom  v Council  [1996] ECR I-5755, paragraph 58; Case C-233/94 Germany  v Parliament and Council  [1997] ECR I-2405, paragraphs 55 and 56; Case C-157/96 National Farmers’ Union and Others  [1998] ECR I-2211, paragraph 61; and British American Tobacco (Investments) and Imperial Tobacco , paragraph 123). That is so, in particular, in the field of the common transport policy (see, to this effect, in particular, Joined Cases C-248/95 and C-249/95 SAM Schiffahrt and Stapf  [1997] ECR I-4475, paragraph 23, and Joined Cases C‑27/00 and C-122/00 Omega Air and Others  [2002] ECR I-2569, paragraph 63).
81. The claimants in the main proceedings submit that the measures to assist, care for and compensate passengers that are prescribed by Articles 5, 6 and 7 of Regulation No 261/2004 in the event of cancellation of, or a long delay to, a flight do not enable the objective of reducing such instances of cancellation or delay to be achieved and are in any event, by reason of the considerable financial charges which they will impose on Community air carriers, totally disproportionate to the objective pursued.
82. In assessing whether the measures in question are necessary, it should be noted that the immediate objective pursued by the Community legislature, as apparent from the first four recitals in the preamble to Regulation No 261/2004, is to strengthen protection for passengers who suffer cancellation of, or long delays to, flights, by redressing, in an immediate and standardised manner, certain damage caused to passengers placed in such circumstances.
83. Admittedly, in addition to this direct objective explicitly set out by the Community legislature, the regulation, like any other generally applicable legislation, may implicitly involve other, secondary, objectives such as, as the claimants in the main proceedings submit, that of reducing, through preventive action, the number of flights that are cancelled or subject to a long delay. The Court has the task of assessing first of all whether the measures adopted are manifestly inappropriate in the light of the regulation’s explicit objective, that relating to strengthening protection for passengers, the legitimacy of which is not in itself contested.
84. It must be stated, first, that the measures prescribed by Articles 5 and 6 of Regulation No 261/2004 are in themselves capable of immediately redressing some of the damage suffered by passengers in the event of cancellation of, or a long delay to, a flight and therefore enable a high level of passenger protection, sought by the regulation, to be ensured.
85. Second, it is not in dispute that the extent of the various measures chosen by the Community legislature varies according to the significance of the damage suffered by the passengers, its significance being assessed by reference either to the length of the delay and the wait for the next flight or to the time taken to inform them of the flight’s cancellation. The criteria thus adopted for determining the passengers’ entitlement to those measures do not therefore appear in any way unrelated to the requirement for proportionality.
86. Third, the standardised and immediate compensatory measures such as the re-routing of passengers, the supply of refreshments, meals or accommodation or the making available of means of communication with third parties are designed to cater for passengers’ immediate needs on the spot, whatever the cause of the flight’s cancellation or delay. Given that these measures vary, as stated in the previous paragraph of this judgment, according to the significance of the damage suffered by the passengers, they likewise do not appear to be manifestly inappropriate merely because carriers cannot rely on the extraordinary circumstances defence.
87. Fourth, it has not been established that if, as advocated by ELFAA, passengers were to take out voluntary insurance to cover the risks inherent in flight delays and cancellations, that would in any event make it possible to remedy the damage suffered by passengers on the spot. Such a measure cannot, therefore, be regarded as being more appropriate to the objective pursued than those chosen by the Community legislature.
88. Fifth, the harmful consequences to which a delay gives rise and which Regulation No 261/2004 seeks to remedy are in no way related to the price paid for a ticket. Therefore, the argument that the measures chosen to alleviate those consequences should have been determined in proportion to the cost of the ticket cannot be upheld.
89. Sixth, while IATA and ELFAA contend that the abovementioned measures could well have significant consequences for carriers’ financial burdens and are not appropriate to the regulation’s secondary objective of reducing the number of flights that are cancelled or subject to a long delay, it must be stated that figures on the frequency of those delays and cancellations have not been given in the proceedings before the Court. Accordingly, the theoretical costs which those measures involve for airlines, as put forward by the parties concerned, do not in any event enable it to be regarded as established that those effects would be out of proportion to the interest in the measures.
90. Moreover, the discharge of obligations pursuant to Regulation No 261/2004 is without prejudice to air carrier’s rights to seek compensation from any person, including third parties, in accordance with national law, as Article 13 of the regulation provides. Such compensation accordingly may reduce or even remove the financial burden borne by the carriers in consequence of those obligations. Nor does it appear unreasonable for those obligations initially to be borne, subject to the abovementioned right to compensation, by the air carriers with which the passengers concerned have a contract of carriage that entitles them to a flight that should be neither cancelled nor delayed.
91. Seventh, so far as concerns the compensation prescribed in Article 7 of Regulation No 261/2004, which passengers may claim by virtue of Article 5 when they have been informed of a flight cancellation too late, air carriers can be exempted from payment of that compensation if they prove that the cancellation was caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken. Given the existence of such a ground for exemption and of the conditions restricting the application of this obligation to which air carriers are not subject if the information is provided sufficiently early or accompanied by offers of re-routing, the obligation does not appear manifestly inappropriate to the objective pursued. Furthermore, the amount of the compensation, set at EUR 250, 400 or 600 depending on the distance of the flights concerned, likewise does not appear excessive and indeed, as maintained by the Commission in its observations without being contradicted, essentially amounts to an update of the level of compensation laid down by Council Regulation (EEC) No 295/91 of 4 February 1991 establishing common rules for a denied-boarding compensation system in scheduled air transport (OJ 1991 L 36, p. 5), taking account of inflation since its entry into force.
92. It follows from the foregoing considerations that Articles 5, 6 and 7 of Regulation No 261/2004 are not invalid by reason of infringement of the principle of proportionality.
Observance of the principle of equal treatment
93. By its sixth and seventh questions, the referring court asks, in essence, whether Articles 5, 6 and 7 of Regulation No 261/2004 are invalid by reason of an infringement of the principle of equal treatment.
94. ELFAA submits that the low-fare airlines which it represents suffer discriminatory treatment since the measures prescribed in those articles impose the same obligations on all air carriers without distinction on the basis of their pricing policies and the services that they offer. Furthermore, Community law does not impose the same obligations on other means of transport.
95. It is settled case-law that the principle of equal treatment or non-discrimination requires that comparable situations must not be treated differently and that different situations must not be treated in the same way unless such treatment is objectively justified ( Swedish Match , paragraph 70).
96. First, having regard in particular to the manner in which they operate, the conditions governing their accessibility and the distribution of their networks, different modes of transport are not interchangeable as regards the conditions of their use (see, to this effect, SAM Schiffahrt and Stapf , paragraph 34). The situation of undertakings operating in each of those different transport sectors is accordingly not comparable.
97. Second, with regard to air transport, passengers whose flights are cancelled or subject to a long delay are in an objectively different situation from that experienced by passengers on other means of transport in the event of incidents of the same nature. Because, in particular, of the location of airports, which are generally outside urban centres, and of the particular procedures for checking-in and reclaiming baggage, the inconvenience suffered by passengers when such incidents occur is not comparable.
98. Finally, the damage suffered by passengers of air carriers in the event of cancellation of, or a long delay to, a flight is similar whatever the airline with which they have a contract and is unrelated to the pricing policies operated by the airline. Accordingly, if the Community legislature was not to infringe the principle of equality, having regard to the aim pursued by Regulation No 261/2004 of increasing protection for all passengers of air carriers, it was incumbent upon it to treat all airlines identically.
99. It follows that Articles 5, 6 and 7 of Regulation No 261/2004 are not invalid by reason of a breach of the principle of equal treatment.