EU Court of Justice pronounces itself on the control of Skeyes' obligations

Belgium
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On 2 June 2022, the Court of Justice of the EU has delivered its judgment on the obligations of Skeyes and the possibilities of recourse against its decisions in the context of a preliminary ruling procedure initiated by the Hainaut Enterprise Court (Belgium) in the context of a dispute initiated by Ryanair concerning Skeyes' decision in 2019 to close Belgian airspace several times due to a lack of personnel.

Brief recap of the relevant facts

Skeyes is an autonomous public company which, on the basis of a legal monopoly, is in charge of controlling Belgian air traffic and the operational and functional training of its staff, in accordance with Regulation (EC) No. 550/2004 of the European Parliament and of the Council of 10 March 2004 on the provision of air navigation services in the single European sky.

In 2019, Skeyes repeatedly decided to close Belgian airspace due to staff shortages caused by strikes conducted by Skeyes employees. In response to this, Ryanair, the Irish low-cost carrier, had initiated summary proceedings before the Hainaut Enterprise Court. Ryanair had requested interim measures based on grounds of extreme urgency following the closure of Belgian airspace. It was not the first time that Belgian airspace had been closed due to social unrest and a recurring lack of air traffic controllers.

The Hainaut Enterprise Court then decided that Belgian airspace had to be reopened by Skeyes subject to penalty payments in case of non-compliance. Skeyes challenged that decision, claiming that the Court lacked jurisdiction by way of third-party proceedings, since it was not a party to the summary proceedings brought by Ryanair.

According to Skeyes, it performs a public function as an air traffic controller and as an autonomous public undertaking subject to a specific legal framework, the Hainaut Enterprise Court had no jurisdiction. Skeyes further argued that it has the discretionary power to regulate Belgian airspace and that its decisions are therefore not subject to any judicial review. Ryanair therefore had no subjective right to bring its initial appeal.

The request for a preliminary ruling

On 31 July 2020, in the framework of this dispute, the Belgian Court submitted two preliminary questions to the Court of Justice of the EU:

1.     Must Regulation (EC) No. 550/2004 mentioned above be interpreted as meaning that it authorises the Member States to remove from review by the courts of that Member State any alleged failures to fulfil the obligation to provide services by the air traffic services provider, or must the provisions of that Regulation be interpreted as meaning that they require the Member States to provide an effective remedy against any such alleged breaches, account being taken of the nature of the services to be provided?

2.     Must Regulation (EC) No. 550/2004 mentioned above be interpreted as excluding not only the rules on competition per se, but also any other rules applicable to public undertakings active on a market for goods and services, which have an indirect effect on competition, such as those prohibiting hindrances to the freedom to conduct business and the freedom to provide services?

The judgment by the Court of Justice of the EU

In response to the first question referred for a preliminary ruling, the Court of Justice of the EU states that article 8 of Regulation (EC) No. 550/2004 of the European Parliament and of the Council of 10 March 2004 on the
provision of air navigation services in the single European sky and article 47 of the Charter of Fundamental Rights of the European Union confer on airspace users such as airlines a right to an effective remedy before the national courts against the provider of air traffic services in order to subject to judicial review the alleged failure to fulfil the duty to provide services.

Any person whose rights and freedoms guaranteed by EU law are infringed has, in principle, the right to an effective remedy before a court of law. Indeed, Skeyes' duty to provide services may give rise to rights which may be affected or even infringed in the event it decides to close the airspace. The Court of Justice of the EU further reasons that this judicial review can, if necessary, be tailored to the degree of discretion enjoyed by an autonomous public undertaking such as Skeyes and that, in the absence of a European harmonising regulation, Member States are free, in accordance with the principle of procedural autonomy, to assign this review power to an administrative or a civil court, as long as the exercise of rights granted by EU law remains effective.

As regards its answer to the second question referred for a preliminary ruling, the Court of Justice of the EU concludes that competition law does not apply to the provision of air traffic services since it is linked to the exercise of public powers as indicated in recital 5 of Regulation (EC) No. 550/2004 mentioned above and is therefore not of an economic nature. Recital 13 of said Regulation however states that the provision of communication, navigation and surveillance services, as well as aeronautical information services, should be organised under market conditions.

The application of the rights and freedoms connected with the freedom to provide transport services and the freedom to conduct a business, as provided for by article 16 of the Charter mentioned above and recognised generally under EU law and in national legislation and practices, is however not excluded in this context.

Conclusion

The ruling of the Court of Justice of the EU is not entirely unexpected and is in line with the Opinion of Advocate General Rantos on this matter.

 

It should be noted, however, that the Court of Justice of the EU did not go as far as the Advocate General did with regard to the actual content of Skeyes' continuity obligation. Indeed, in his Opinion, he had acknowledged that Skeyes was entitled to apply a zero-rate measure, which means that no aircraft may take off, land or even transit in Belgian airspace or in certain areas of it. In this sense, a closure of the airspace can indeed be justified for safety reasons. The Advocate General mentioned as examples extreme weather conditions, acts of terrorism, adaptations of air traffic control systems and facilities, etc. However, air safety cannot be invoked to justify a zero-rate measure when its origin is exclusively attributable to the air navigation service provider, such as, for example, organisational difficulties leading to a shortage of air traffic controllers.

 

The Court of Justice of the EU did not rule on this issue but it will be up to the Hainaut Enterprise Court to do so.

 

It is now clearly established that when an autonomous public undertaking such as Skeyes uses its discretionary power to close Belgian airspace, it must take into account the impact of its decision on the rights of airlines and the risk of having to justify it before the competent national court. On the basis of these elements, the Hainaut Enterprise Court will have to decide the dispute between Skeyes and Ryanair in the light of the Court of Justice of the EU's clarifications.