In this preliminary reference case coming from Germany, the Court of Justice (“CoJ”) applied the principle of non-discrimination on grounds of nationality enshrined in Article 18 TFEU to an interesting set of facts.

International Jet Management (“IJM”) is an airline company with its seat in Austria. It operates charter flights within the European Union (“EU”) but it also uses its fleet for flights from third countries to the EU. At the material time, the company held an operating licence and an air operator certificate (“AOC”) issued in Austria. Between December 2008 and March 2009,  IJM operated private flights to Germany from Moscow, on six occasions, and Ankara, on one occasion.

IJM however did not have for any of those flights the authorisation to enter the German airspace as it should pursuant to the relevant German legislation. In three occasions the competent German authority (the Luftfahrtbundesamt) had refused it the authorisation on the ground that IJM had not produced a “non-availability declaration”, namely a declaration that the air carriers holding an operating licence issued by the German authorities were either nor willing to operate the flight in question or were prevented from operating it. In the other cases, the Luftfahrtbundesamt had not given a decision on the application for authorisation at the time of the flights. For the reason of operating those flights, IJM had to pay several fines for infringement of the legislation in force.

On that basis, IJM contested the imposed fines claiming that, pursuant to Regulation No 1008/2008, it is entitled to fly aircraft freely in European airspace and that the market is free for airline companies established in Member States and wishing to operate air transport services. The German authorities however did not share the same view… This gave rise to the dispute at issue before the German court which decided to refer a number of questions to the CoJ.

The first question referred is whether Article 18 TFEU, i.e. the principle of non-discrimination on grounds of nationality, is applicable to a situation in which a first Member State requires an air carrier holding an operation licence issued by a second Member State to obtain an authorisation to enter the airspace of the first Member State to operate flights in non-scheduled traffic from a third-country to that first Member State, although such an authorisation is not required for air carriers holding an operating licence issued by that first Member State.

The CoJ started its reasoning by examining the special legal regime governing air transport in the TFEU. Pursuant to Article 58(1) TFEU, the freedom to provide services in the field of transport is governed by Title VI TFEU. However, air transport, together with sea transport, is distinguished from other modes of transport, in the sense that, unless the EU legislature has decided otherwise, air transport is not subject to the provisions of Title VI TFEU (see Article 100(1) and (2) TFEU). Measures liberalising air transport services may be adopted under Article 100(2) TFEU. The CoJ continues that, no such liberalising measures have been adopted by the EU legislature to date. However, Article 18 TFEU may still be applicable to such services provided that they fall within the scope of application of the Treaties.

In this respect, the CoJ reformulates the question: is Article 18 TFEU applicable to the situation of an air carrier, holding an operating licence by the authorities of one Member State in accordance with Regulation No 1008/2008 and offering air transport services to another Member State when the services at issue are provided from a third country?

In the respect, the CoJ observes that no undertaking established in the EU is permitted to carry by air passengers, mail and/or cargo unless it has been granted the operating licence according to Regulation No 1008/2008. This Regulation does not exclude from its scope air carriers established in the EU which carry out air transport of passengers from third countries to Member States.

Thus, in the present case, IJM, which is an air carrier with its principal place of business in one Member State, providing air transport services in another Member State, including air transport from a third country, must possess an operating license granted by the competent authority of the former Member State, in accordance with Regulation No 1008/2008. This Regulation harmonises the conditions for the issue of such licence and guarantees its recognition by the authorities of the other Member States. The Regulation contains also an express reference to the obligation for the Member States to comply with the principle of non-discrimination on grounds of nationality with regard to Community air carriers (see Article 15(5) and 22(2) of the Regulation). The German authority issuing the authorisation to enter German airspace examines, prior to the grant of that authorisation to an air carrier, which holds an operating licence issued by the competent authority of another Member State, various matters which must be checked by that latter authority in accordance with Regulation No 1008/2008.

In view of the above, air transport services provided between a third country and a Member State by an air carrier holding an operating licence issued by another Member State in accordance with said Regulation does fall within the scope of application of the Treaties in the meaning of Article 18 TFEU. Thus, the latter Article applies to the situation in the main proceedings.

In view of the answer to the first question, the CoJ continued to the second and third questions: is national legislation requiring, on pain of a fine, an carrier holding an operating licence issued by a second Member State to obtain an authorisation to enter the airspace of the first Member State from a third country, although such authorisation is not required for air carriers holding an operating licence issued by that first Member State, and which makes the grant of that authorisation subject to production of a declaration confirming that the air carriers holding an operating licence issued by that first Member State are either not willing to operate those flights or prevented from operating them (non-availability declaration), contrary to Article 18 TFEU?

The answer is yes: such national legislation is contrary to Artilce 18 TFEU. First, national legislation requiring such additional authorisation by the first Member States establishes a distinguishing criterion equivalent to a criterion based on nationality. Thus, it is discriminatory and in violation of Article 18 TFEU, said the CoJ. Second, a fortiori, same goes for the requirement to produce a non-availability declaration in order to be granted such licence.

The protection of national economy and safety invoked by the German Government as justifications to such restriction were not accepted by the CoJ. The former is a purely economic objective which cannot justify the difference in treatment and the latter, which is indeed a legitimate objective, cannot reasonably be relied upon in the case at issue.