EBACE Convention News

EU Court Strikes Down German Foreign Charter Provision

 - May 18, 2014, 11:00 AM

After a five-year fight for justice, Vienna, Austria-based aviation services provider International Jet Management (IJM) has prevailed against German authorities in a precedent-setting ruling by the European Court of Justice (ECJ).

The ECJ, Europe’s highest court, was asked by a German court whether fines against IJM and others by German authorities were contrary to European law. The result that they are will almost certainly mean that IJM wins its long-running battle over non-discrimination.

At issue was a German regulation that forced foreign operators of inbound flights from a non-EU country departure point to apply for permission three days before arrival, as well as provide proof that no Germany-based competitor would make that flight. In absence of such evidence, which often could not be gathered in the suggested time frame, even if the flight provider wanted to do so, the authorities would impose fines against the operator if the flight were conducted. “We guarantee our customers that we will be ready for departure within two hours after they book a flight,” said Robert Schmölzer, IJM’s managing director, “This is precisely what makes business jets attractive to the customers.”

In the presence of such regulations IJM, which operates many such charter flights from locations including Moscow and Ankara, was eventually served with fines of up to €2,200 ($3,000) per flight for failure to comply with the permission process for inbound flights. “For us, this authorization requirement presented an obvious discrimination against competitors from Germany, prohibiting us from exercising our traffic rights,” said Schmölzer. “It is unacceptable that the activities of a service provider that is established in another member state and legally provides similar services there are prevented or rendered less attractive by such restrictions.”

In 2009, IJM launched a protest against the penalties, and in 2011 the High Regional Court of Braunschweig referred the case to the ECJ, the highest court in the European Union in matters of European Union law, for a preliminary ruling. During the proceedings, representatives from seven EU member governments issued statements, demonstrating the breadth of the case.

On March 18, the court ruled that EU law supercedes the German regulations requiring authorization for an established business in another member state to provide services in Germany. In its arguments, the court established that the authorization requirement was established to protect German companies and did not recognize an operating license granted under EU legislation by another member state–and therefore the fines imposed on IJM and others were not justified under its interpretation of article 18 of the Treaty on the Functioning of the European Union, which is a prohibition of discrimination on the basis of nationality.

“This is a huge success that benefits not only our company, but all European air carriers flying into Germany from a non-EU country,” said Schmölzer. “This is another important and right step toward the liberalization of European air traffic.”