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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Ryanair Ltd. v. Commission for Aviation Regulation [2006] IEHC 252 (3 July 2006) URL: http://www.bailii.org/ie/cases/IEHC/2006/H252.html Cite as: [2006] IEHC 252 |
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Neutral Citation Number: [2006] IEHC 252
[2005 No 620 J.R.]
BETWEEN
APPLICANT
RESPONDENT
JUDGMENT of Mr. Justice O'Higgins delivered on the 3rd July 2006.
Notice of motion dated 16th June, 2005, the applicant seeks:
1. A declaration that the decision (hereinafter "the April, 2005, decision") by the respondent made on 26th April, 2005, to alter the designation of Dublin Airport from "schedule facilitated" to "co-ordinated" for the purposes of Regulation (EC) No. 95/1993 as amended by Regulation (EC) No 793/2004 on Common Rules for the Allocations of Slots at Community Airports ("the Regulation") was ultra vires its powers under the said Regulation and under the Aviation Regulation Act 2001 ("the 2001 Act").
2. A declaration that the April, 2005, decision was unreasonable and/or was taken without taking into consideration relevant factors and/or was taken after taking into account irrelevant factors.
3. A declaration that the April, 2005, decision was disproportionate and/or was lacking in transparency.
4. An order of certiorari quashing the April, 2005, decision.
5. Such further or other order as this Honourable Court shall deem fair (or necessary) and just.
6. An order for the costs of the application.
The facts
The facts may be briefly stated as follows:
1. The Respondent ("the Commission") is the body established pursuant to the 2001 Act for the purposes of certain regulatory functions in connection with aviation and certain airports in the State. By virtue of section 8 (1) of the 2001 Act, the Commission's functions include acting as the competent authority for the purposes of the Regulation. One of the Commission's duties is the designation of airports in Ireland either as "schedules facilitated" or "coordinated" with regard to the allocation of airport "slots". A "slot" is, in effect, the right of an airline to avail of the airport's facilities (particularly the runways and kerbside facilities) for the purposes of landing and taking off aircraft.
2. A "schedules facilitated" airport is one where the various requirements of airlines operating at the airport can be met through a broad measure of consensus as to the allocation of slots. A "co-ordinated" airport is, in effect, one where slots are allocated on a prescriptive basis and the relevant airport authority can impose sanctions where airlines do not meet the requirements of the airport authority allocating the slots. The allocation of slots is carried out by a facilitator independent of the managing body of the airport and the airlines ("the Schedules Facilitator"). In general, air carriers prefer to operate under a "schedules facilitated" rather than a "coordinated" regime because this offers them greater flexibility in scheduling. There are also airports with no designation status.
3. Dublin Airport was designated as a "schedules facilitated" in and around September, 2000.
4. In September 2002, the then manager of Dublin Airport (Aer Rianta CPT , now Dublin Airport Authority, ("DAA")) requested the Commission to re-designate Dublin Airport from being a "schedules facilitated" airport to being a "co-ordinated" airport.
5. Following that request the respondent (as he was obliged to do) ensured that a thorough capacity analysis was carried out to meet the requirements of the Regulation. The report was carried out by Alan Stratford and Associates (The ASA Report). An interim report was provided in June, 2004, and a final report in July, 2004. The report recommended that there be no change in status from "scheduled facilitated" to "co-ordinated" at that time. The following reasons are given in the executive summary to the report:
"XV In general, the current system of (voluntary) co-ordination appears to be operable and we recommend that it continues in place for the next three years. This conclusion is based on our assessment that there is sufficient terminal and aeronautical capacity, provided that this is managed appropriately. This is also the view of the majority of airlines, although we accept that Aer Rianta takes a different standpoint."
Following the receipt of the report and the carrying out of consultations as required by s. 3 of the Regulation, in the decision dated 13th October, 2004, the respondents decided that "there are no grounds at present time to designate Dublin Airport as a co-ordinated airport under the Regulation". However the ASA Report did state that there may be grounds for altering Dublin Airport's status in the future should certain defined circumstances take place. The respondent noted this at p. 3 of its decision when it stated:
"However, the ASA report set out two circumstances which, were they to occur singly or in combination to a significant degree, would justify an immediate change in the designation status of Dublin Airport from schedules facilitated (co-ordinated) to co-ordinated (fully co-ordinated):-
'The first scenario is the possible effect on an increase in transatlantic flights from Dublin following the potential relaxation of the Shannon stopover under the U.S. – Eire bilateral.
The second scenario concerns the level of refusals to flight changes requested by the Co-ordinator. Should there be a significant increase in the scale of refusals (as indicated, for example, in an annual review of the system), then this may compromise 'the efficiency of existing arrangements and justify a change in the airports co-ordination status'"
Although the respondent decided not to redesignate the airport it did indicate that it would monitor the capacity of the airport to ascertain if either of the two circumstances adverted to in the ASA Report occurred. Page 6 of the decision is also of relevance:
"Future Monitoring
The Commission will, in accordance with the provisions of Article 3 of Council Regulation (EEC) No. 95/93, as amended, update the capacity analysis periodically and will, in particular, monitor the capacity position of Dublin Airport to ascertain if either of the two short term circumstances identified by ASA materialise.
If either circumstance occurs, and, on investigation by the Commission is shown to (a) have significant implications for the ability of the airport to cater for current or planned traffic and/or (b) compromises the efficiency of existing arrangements, Dublin airport will be designated as co-ordinated."
7. Without any update of the capacity analysis or consultation with the interested parties, on 26 April, 2005, the Commission issued Commission Notice 3/2005 which purported to be a "Decision to designate Dublin Airport as a co-ordinated airport in accordance with the Regulation ("the Decision"). The Commission took this step after receiving information from the schedules facilitator that the scale of refusals at Dublin Airport had increased for the Summer 2005 season.
8. The regulation requires the appointment of a co-ordinator to administer the regime and on 21st March, 2006, Airport Co-ordinator Limited (ACL) was appointed to carry out those functions. The new regime commenced on 26th March, 2006.
9. In response to complaints from the applicant to the Directorate for Energy and Transport of the European Commissioner in Brussels by letter dated 10th February, 2006, the European Commissioner stated:
"… I cannot conclude that the Irish Authorities have not complied in one way or another with a slot Regulation." (Although not binding on this court, the respondent urges that this court have regard to that decision and argues that this court should reach the same conclusion)."
Although the grounds for relief include a contention that the decision was lacking in transparency and also that it was disproportionate the applicant is no longer relying on these grounds. The applicant's challenge to the validity of the decision is essentially based on the contention that the respondent did not adhere to the requirements of the Regulation in making its decision.
The Regulation
The E.U. Slots Regulation (Regulation (E.C.) No. 95/1993 as amended by Regulation (E.C.) No. 793/2004) sets out the legal framework for the management and operation of slots at airports in the European Community. The preamble to the Regulation provides as follows:
"Whereas under certain conditions, in order to facilitate operations, it is desirable that a Member State should be able to designate an airport as coordinated provided that principles of transparency, neutrality and non-discrimination are met"
8. The key definitions in Article 2 of the Regulation include the following:
• " "slot" shall mean the permission given by a coordinator in accordance with this Regulation to use the full range of airport infrastructure necessary to operate an air service at a coordinated airport on a specific date and time for the purpose of landing or takeoff as allocated by a coordinator in accordance with this Regulation" [Definition (a)];
• " "coordinated airport" shall mean any airport where, in order to land or to take off, it is necessary for an air carrier or any other aircraft operator to have been allocated a slot by a coordinator, with the exception of State flights, emergency landings and humanitarian flights" [Definition (g)];
• " "schedules facilitated airport" shall mean an airport where there is potential for congestion at some periods of the day, week or year which is amenable to resolution by voluntary cooperation between air carriers and where a schedules facilitator has been appointed to facilitate the operations of air carriers operating services or intending to operate services at that airport" [Definition (i)];
• " "managing body of an airport" shall mean the body which, in conjunction with other activities or otherwise, has the task under national laws or regulations of administering and managing the airport facilities and coordinating and controlling the activities of the various operators present at the airport or within the airport system concerned" [Definition (j)].
Article 3
9. Article 3 (1) of the Regulation provides as follows with regard to the conditions for designating an airport to be a coordinated airport:
"(a) A Member State shall be under no obligation to designate any airport as schedules facilitated or coordinated save in accordance with the provisions of this Article.
(b) A Member State shall not designate an airport as coordinated save in accordance with the provisions of paragraph 3. "[emphasis added]
"The Member State responsible shall ensure that a thorough capacity analysis is carried out at an airport with no designation status or at a schedules facilitated airport by the managing body of that airport or by any other competent body when that Member State considers it necessary, or within six months:
(i) following a written request from air carriers representing more than half of the operations at an airport or from the managing body of the airport when either considers that capacity is insufficient for actual or planned operations at certain periods; or
(ii) upon request from the Commission, in particular where an airport is in reality accessible only for air carriers that have been allocated slots or where air carriers and in particular new entrants encounter serious problems in securing landing and take off possibilities at the airport in question.
This analysis, based on commonly recognised methods, shall determine any shortfall in capacity, taking into account environmental constraints at the airport in question. The analysis shall consider the possibilities of overcoming such shortfall through new or modified infrastructure, operational changes, or any other change, and the time frame envisaged to resolve the problems. It shall be updated if paragraph 5 has been invoked, or when there are changes at the airport influencing significantly its capacity and capacity usage. Both the analysis and the method used shall be made available to the parties having requested the analysis and, upon request, to other interested parties. The analysis shall be communicated to the Commission at the same time." [emphasis added]
"On the basis of the analysis, the Member State shall consult on the capacity situation at the airport with the managing body of the airport, the air carriers using the airport regularly, their representative organisations, representatives of general aviation using the airport regularly and air traffic control authorities."
"Where capacity problems occur for at least one scheduling period, the member state shall ensure that the airport is designated as coordinated for the relevant periods only if,
(a) the shortfall is of such a serious nature that significant delays cannot avoided at the airport, and
(b) there are no possibilities of resolving these problems in the short term."[emphasis added].
It is clear from the Regulation that it is prerequisite to designating an airport as a co-ordinated airport that the following steps should be taken:
1. A thorough capacity analysis (using commonly recognised methods) must be undertaken.
2. Any shortfall in capacity must be verified by a thorough capacity analysis.
3. There must be consultation with the airport stakeholders to ensure their views with regard to the proposed decision to alter the airport status are taken into account.
The applicant takes no issue with the respondents actions up to the time of its decision not to redesignate the airport as "co-ordinated" on 13th October, 2003. However it maintains that the respondent was not entitled to change that designation from "schedules facilitated" to "co-ordinated" in April, 2005, and asserts that the purported change in designation was not in compliance with the procedures mandated by Article 3 of the Regulation. In particular the applicant urges that prior to the decision in April, 2005, to change the status of the airport:
(a) It was necessary for the respondent to update the capacity analysis that had been carried out by ASA in 2004.
(b) It was necessary to carry out a consultation process with certain interested parties.
(c) It was necessary to ascertain whether these problems caused by a shortfall in capacity could be resolved in the manner set out in the Regulation.
In support of its contentions the applicant submitted that the structure and content of the Regulation underlined the fact that co-ordinated status should not be resorted to unless necessary. This was evident from the wording itself. Article 3(b) for example states that:
"A Member State shall not designate an airport as co-ordinated save in accordance with the provisions of s. 3." [emphasis added]
Article 3(5) of the Regulation makes the consultation process mandatory: "the Member State shall consult". [emphasis added]
Article 3(5) provides for the designation of an airport as "co-ordinated" for the relevant period only if:
"(a) The shortfall is of such a serious nature that significant delays cannot be avoided at the airport, and
(b) There are no possibilities of resolving these problems in the short term."
Article 3(7) states that:
"When a capacity sufficient to meet actual or planned operations is provided at a co-ordinated airport, its designation as a fully co-ordinated airport shall be lifted."
The respondent does not dispute the necessity of complying with the requirements of Article 3 of the Regulation, in fact it asserts that it did comply with them.
Firstly it points out that a capacity analysis as required by Article 3 was undertaken by ASA in June, 2004. (This is not in dispute).
Secondly a consultation with the relevant interests as required by the provisions of Article 3 ensued (this is not in dispute). The decision made in October, 2004, was based on that analysis and after the relevant consultation.
Thirdly the respondent submits that the contents of the ASA report and its analysis mandated it to change the designated status of the airport in compliance with the requirements of Article 3 should either of the "scenarios" mentioned in the report occur. It is not in dispute that one of the scenarios envisaged in the ASA analysis did in fact occur. There is no dispute that there was a very significant rise in the scale of refusals to co-operate with the voluntary system. The increase in refusals appears to have been in the order of over 100 percent.
The respondent submitted that the analysis provided in June, 2004, and the consultation that followed were the basis of the decision in October of that year. In that decision it was clearly stated that the status of the airport would remain unchanged but that the respondent would change the designation if there should be a significant increase in the number of refusals.
The decision itself stated under the heading of future monitoring:
"The Commission will, in accordance with the provisions of article 3 of the Council Regulation (EEC) No. 95/93 as amended update the capacity analysis periodically and will in particular ascertain if either of the two short term circumstances identified by ASA materialise.
....
If either circumstance occurs, and on investigation by the Commission is shown to:
(a) have significant implications for the ability of the airport to cater for current or planned traffic and/or (b) compromises the efficiency of existing arrangements, Dublin Airport will be designated as co-ordinated."
Accordingly the respondent submits that the requirements of the Regulation were complied with, and that, because the ASA report had implicitly found that there was a shortfall in capacity, an updated analysis was not necessary.
The net issue to be decided is whether prior to the re-designation of the airport as "co-ordinated", it was necessary to update the capacity analysis, renew the consultation and examine possible solutions as the applicant contends for or whether the respondent is correct in his contention that the steps taken prior to the decision in October, were sufficient to warrant re-designation in March, 2005.
In my view there was a necessity to carry out an updated capacity analysis prior to the re-designation of the status of the airport.
I cannot accept the contention of the respondent that there was an implicit finding in the ASA report of a lack of capacity that was only being managed because of co-operation of the parties. Firstly the report states in its conclusion:
"…we believe that the existing infrastructure is sufficient to cater for the expected traffic demand over the next three years, provided the existing scheduling constraints are applied and the level of flights operated at unco-ordinated times is maintained at close to current levels."
If the report intended to convey the message that there was at present over capacity which was being managed only by present levels of co-operation, it is reasonable to expect that this would have been stated in a report running to some 62 pages (excluding appendices). Furthermore the ASA analysis was obliged under the Regulation to consider the possibilities of overcoming a capacity shortfall had it found such. The absence of any such consideration by acknowledged experts in the field supports their finding that there was no shortfall and runs counter to the position argued for by the respondent that it was implicit in the report that there was indeed a shortfall in capacity which was only being dealt with because of the co operation of the parties.
Secondly in my view the report does not state that an increase in refusals would be sufficient to cause a shortfall in capacity or to justify a change in status. I cannot agree with the statement contained in the decision as follows:
"However the ASA report set out two circumstances which, were they to occur singly or in combination to a significant degree, would justify an immediate change in the designation status of Dublin airport from schedules facilitated (coordinated) to coordinated (fully coordinated)."
In my view that conclusion was not justified by the contents of the report. When referring to the "second scenario" the report stated should there be a significant increase in the scale of refusals (as indicated, for example, in an annual review of the system) then this "may" compromise the efficiency of existing arrangements and "could" justify a change to the airport co-ordination status. In my view that is quite different than a statement such as that contended for in the decision.
Thirdly in the decision itself the respondent, in the context of the two circumstances which might lead to a redesignation of status of the airport (which included the consequences of an increase in the number of refusals), recognised that there was an obligation to update the capacity analysis.
Under the heading Future Monitoring the report states:
"The Commission will in accordance with the provisions of Article 3 of the Council Regulation (EEC) No. 95/93 as amended, update the capacity analysis periodically, and will in particular monitor the capacity position of Dublin Airport to ascertain if either of the two short term circumstances identified by ASA materialise."
The respondent now agrees that this was not done but contends that it was unnecessary in view of the ASA report and what it contends was its "implicit" finding of over capacity. It is hard to reconcile this position, with the statement above concerning future monitoring. It is true that the respondent also submitted that the information about increased refusals furnished by the schedules facilitator when taken in the context of the ASA report constituted an update. However in the course of argument counsel for the respondent conceded that the provision of the information by the schedules facilitator was not the capacity analysis. In any event I cannot agree that the mere supply of information, even taken against the background of the report, subsequent consultation and analysis, could properly constitute an updating of the capacity analysis, as required by the Regulation. In my view it was necessary that not only the analysis but any updating thereof be "through". It is noteworthy also that while the ASA report envisaged a three year period of scheduled facilitated designation subject to annual review – the decision to change the designation in March, 2004, was merely six months after the decision.
Although the ASA report envisaged a period of three years and was prospective in the sense – and it did not specifically refer to the need to carryout an updated analysis – in my view the Regulation itself provided for the necessity of such an update prior to any new decision on designation. The report found that there was adequate capacity and recommended no change in status. It did envisage new circumstances arising which might have an impact on that situation. It did not however purport to dispense with the updated analysis requirement under the Regulation. The decision to change the designation of the airport was based on information supplied by the schedules facilitator to the respondent in March and April, 2005. In circumstances where it was concluded that these significantly influenced the capacity and capacity usage of the airport, an updated capacity analysis was a prerequisite for a change in designation. It was also necessary that the undated analysis should consider the possibility of surmounting any difficulties through new and modified infrastructure, operational changes, or any other changes.
In the present case neither an updated capacity analysis was carried out nor was any consideration given to the possibility of dealing with these problems other than by re-designation of the airport. In my view both of these steps are made obligatory by the Regulation and a designation of an airport as fully co-ordinated without the taking of such steps is invalid.
The respondent submits that even if it did not comply with the Regulation the plaintiff should not be granted the relief sought and that the court should exercise its discretion to refuse the relief on a number of grounds. I will deal with each of the grounds raised individually:
(a) The applicant did not consult with the respondent following the ASA report and thereby could be held to have acquiesced in the actions of the respondent.
Following the receipt of the ASA report the respondent entered into consultation with the interested parties as he was obliged to do under the Regulation. The applicant did not participate in that consultation process nor did it object to the conclusions of the ASA report. It is contended that the applicant should be denied relief on the basis that its failure to voice its objections earlier amounted to acquiescence in the decision. I cannot accept that proposition. The ASA report recommended that the schedules facilitated designation of the airport continue for a period of three years. The applicant was happy with that. Furthermore the decision of the respondent was that there were no grounds at that time to redesignate Dublin Airport as a co-ordinated airport under the Regulation. Although it is true to say that under the heading "Future Monitoring" the respondent stated its intention to change the designation should certain circumstances occur, the applicants were entitled to act on the basis that such change would be made in accordance with the Regulations. The applicant was also entitled to rely on the statement contained in the decision that in accordance with the provisions of Article 3 of Council Regulation (EEC) No. 95/93 as amended the capacity analysis would be updated periodically. I do not consider that the applicants should be entitled to relief on the grounds of acquiescence in the decision.
(b) The conduct of the applicant was such that relief should be denied. The applicant itself was responsible for a large proportion of refusal of slots offered by the airport co-ordinator. It was this increase in refusals that was the basis of the respondent's decision to change the designation of the airport. The respondent contends that this fact should preclude the applicant from obtaining relief. I cannot agree with that contention. The applicant as a commercial enterprise was quite entitled to refuse slots in accordance with the "schedules facilitated" designation of the airport and it cannot be penalised for exercising its right of refusal. As a consequence of such refusal Ryanair was no doubt aware that there was at least a possibility that the designation of the airport might be reviewed. However it was entitled to act on the basis that such review would be in compliance with the requirements of the relevant Regulation.
(c) The respondent points out that the quashing of its decision would lead to serious consequences, additional difficulties and possibly more congestion in the airport. Such difficulties have not been the subject of detailed analysis in this court and although I am prepared to accept that the quashing of the order would pose difficulties and cause inconvenience I am not satisfied that these consequences constitute adequate grounds for refusing relief.
(d) The respondent submits that the quashing of the decision of this court "risks being" moot having regard to the fact that it was anticipated that Dublin Airport will be changed to co-ordinated status from the Summer 2007 scheduling period. It may well be that the designation of the airport will be changed in 2007 following the procedures laid down in the Regulation. It would be wrong for this court however to act on the presumption that such change in designation will take place and accordingly I do not consider that the possible future designation is a grounds for refusing relief to the applicant.
In view of the findings of the court as set out above the decision of the respondent must be quashed.
Approved: O'Higgins J.
