SVENSKA FLYGFORETAGENS RIKSFORBUND AND SKYWAYS EXPRESS AB v. SWEDEN
Inadmissible
The first applicant, Svenska Flygföretagens Riksförbund (the National Association of Swedish Airlines), is a nationwide non-profit association open for membership to all serious, commercial airline companies. The second applicant, Skyways Express AB, is a private limited airline company based in Sweden and is a member of the applicant association. The applicants are represented before the Court by Mr J. Thörnhammar, a lawyer practising in Stockholm. The Swedish Government (“the Government”) are represented by their Agent, Mr C.H. Ehrenkrona, Ministry for Foreign Affairs. The facts of the case, as submitted by the parties, may be summarised as follows. The Swedish Civil Aviation Administration (Luftfartsverket, hereinafter “the CAA”) is a public utility, wholly-owned by the Swedish State. The activities of the CAA are directed by the Government and subject to their decisions. The CAA operates 19 airports in Sweden and is responsible for, inter alia, air traffic services and air safety in the country. The aviation infrastructure is financed through charges levied by the CAA on the airline companies wanting to use State airports. About two-thirds of the CAA’s budget is financed by these traffic charges. The Government specify the economic goals and restrictions applicable to State authorities, such as the CAA, through so-called letters of regulation (regleringsbrev), which are binding. The letter of regulation relevant to the instant case was issued by a Government decision dated 18 December 1997. It stipulated guidelines for, inter alia, the overall targets and the financial conditions of the CAA and specifically fixed the financial targets of the CAA for the period between 1999 and 2001. The letter also stipulated the following limitation on permissible increases in traffic charges: “As a restriction on price increases, the traffic charges, excluding land routing charges, security charges and noise charges, must not increase on average over the years more than the net price index, calculated as of 1993.” Following consultations with Swedish and foreign airline companies, the CAA, on 10 December 1998, decided to adopt a regulation which established new norms for air traffic charges at State airports (the Code of Statutes of the CAA – Luftfartsverkets författningssamling – LFS 1998:83). The regulation was published on 22 December 1998 and entered into force on 1 January 1999. By a letter of 10 January 1999, the first applicant, on behalf of its members, filed an appeal with the Government against the decision of the CAA. It argued that the increase in air traffic charges amounted to 5%, which was too high having regard to the situation in the country with hardly any inflation and low interest rates. It also pointed out that the new charges heavily disadvantaged smaller aircraft, imposing on them relatively high price increases compared to heavier aircraft. The first applicant also stated that the airline companies had not had sufficient time to alter their customer prices in line with the increase since the decision had been made by the CAA on 10 December 1998 and had come into force already on 1 January 1999. The CAA submitted its comments to the Government in a letter dated 15 January 1999. The CAA initially stated that the appeal had been received on 12 December 1998 and had thus been made in time. (The stated date is obviously incorrect; the correct date appears to have been 12 January 1999.) However, the CAA opposed the appeal since the increase in the charges was necessary to fulfil the financial demands imposed on the CAA. It stated that the total increase in charges amounted to 4.2%, which corresponded to an annual increase in its income of approximately 115,000,000 Swedish kronor (SEK). The main increases had been made in relation to passenger charges, charges for local air flight services and the minimum charges for landing. The increase of the two latter charges in relation to smaller aircraft had been compensated by introducing a new annual landing card and by increasing the weight-limit for aircraft having to pay the local air flight charge. Furthermore, the lighter aircraft had experienced very little price increases between 1993 and 1998 compared to the heavier aircraft. The CAA further reiterated that the Government had imposed a limit on the charge increase corresponding to the net price index calculated from 1993. The increase in charges previously made between 1993 and 1998 had, however, been below this limit; the CAA had in fact lowered prices by 5% during this period. The current increase was therefore well within the scope of possible increases accumulated over the years. In a letter dated 29 April 1999, the first applicant submitted to the Government its comments on the CAA’s position. It stated that the introduction of the annual landing card for the lighter aircraft, whilst commendable, was of minor importance since only three or four aircraft in the country could benefit from it. It conceded that, in previous years, the CAA had charged less than the authorised price increases. However, it found it remarkable that the CAA relied on the cumulative effect of the price ceiling’s shortfall over the years to justify a steep increase in the charges now. On 11 May 2000 the first applicant further submitted that the net price index had fallen heavily since 1995 and had, during certain periods, almost reached the 1993 level. The scope for increasing the charges had thus gradually been reduced. Furthermore, a large part of the increase concerned charges restricted by the Government’s letter of regulation, and the increase in those charges clearly exceeded the development of the net price index. The first applicant also stated that the real increase in charges was in fact greater than that mentioned by the CAA, since infrastructure costs should also be considered a traffic charge. The CAA submitted to the Government on 26 June 2000 that it had not overstepped the price ceiling set by the Government and that the infrastructure charges were to be excluded from the calculation of the increases complying with the price ceiling. The first applicant responded, in submissions to the Government on 21 August 2000, that the Government’s letter of regulation did not provide for the possibility of accumulating the annual increases, as the CAA had done, and that the increase in air traffic charges clearly exceeded the development of the net price index during the given period. On 28 February 2002 the Government dismissed the first applicant’s appeal for the following reasons: “Under section 35 of the Ordinance (1988:78) with Instructions for the CAA, the decisions of the CAA in matters other than personnel issues are subject to appeal only if expressly stated. The instant appeal concerns a decision on the issue of regulations, as provided for in chapter 8 of the Instrument of Government [Regeringsformen]. There is no provision stating that an appeal lies against such a decision of the CAA. The appeal will not therefore be examined.” The CAA is a public utility and part of the State administration. It does not own its assets but merely administers them for the State. As opposed to other public authorities, a utility is a self-financing unit conducting business, and is run on principles of corporate finance. Under section 1 of the Ordinance with Instructions for the CAA (Förordningen med instruktion för Luftfartsverket, 1988:78, hereinafter “the CAA Ordinance”), applicable at the material time, the CAA is defined as a central public authority with the overall responsibility for civil aviation. The Government decide upon the conditions for the individual State authorities through ordinances and annual letters of regulation. The letters of regulation set out, inter alia, the goals to be achieved by the authority, the funding at the authority’s disposal and the way that funding should be distributed among its different activities. Chapter 6, section 13 of the Aviation Act (Luftfartslagen, 1957:297) provides that the Government, or an authority designated by the Government, may issue regulations concerning charges for the use of public airports or other public facilities or services for air traffic. While the air traffic charges originally were set by the Government, the competence to do so was, of 1 January 1993, delegated to the CAA through an amendment (section 75) to the Aviation Ordinance (Luftfartsförordningen, 1986:171). These two provisions constituted the legal basis for the CAA’s decision of 10 December 1998 to adopt its regulation on new air traffic charges. As regards the right to appeal, section 35 of the CAA Ordinance provided the following: “The decisions of the CAA in personnel matters are subject to appeal to the Government, [unless otherwise stated] ... The decisions of the CAA concerning the enrolment for education in the air traffic control service are not subject to appeal. The decisions of the CAA in other matters are subject to appeal only if 1. this follows from a provision other than section 22(a) of the Public Administration Act [Förvaltningslagen, 1986:223], or 2. a provision specifically refers to section 22 (a) of the Public Administration Act. If the matter concerns the exercise of public authority in respect of an individual and there are no specific provisions on appeal, the decision is nevertheless subject to appeal to the Government.” The Public Administration Act applies to the handling of matters by the administrative public authorities and to the courts’ handling of administrative matters (section 1). Under section 22 of the Act, a decision may be appealed by the person whom the decision concerns, provided that it has affected him or her adversely and is subject to an appeal. Under section 22 (a), appeals lie to the administrative courts. However, this does not apply to decisions in administrative matters or in matters concerning the adoption of regulations (normgivningsärenden), as provided for in chapter 8 of the Instrument of Government (Regeringsformen). If there is a specific provision in another Act providing for an appeal, that provision will have precedence. Section 23 provides that an appeal shall be made, within three weeks, to the authority which issued the impugned decision. According to section 24, that authority shall examine whether the appeal has been submitted in time. If it has been submitted in time, the appeal and the case-file are forwarded to the authority empowered to examine the appeal. Chapter 8 of the Instrument of Government contains provisions on laws and other regulations, stating the areas which may be regulated only by law and the areas which may also be regulated by other provisions, as well as the competence of Parliament or the Government to delegate the power to issue regulations to the authorities or the municipalities. The term “exercise of public authority” (myndighetsutövning) is used in many laws and regulations, including the Instrument of Government, the Public Administration Act, the Criminal Code (Brottsbalken) and the Tort Liability Act (Skadeståndslagen, 1972:207). According to the preparatory works of the Instrument of Government (prop. 1973:90, p. 397) and the Public Administration Act (prop. 1985/86:80, p. 55), the term has the same meaning as section 3 of the repealed 1971 Public Administration Act (1971:290). That section gave the following definition: “the exercise of authority to decide on a benefit, right, obligation, disciplinary sanction, dismissal or other comparable issue in respect of an individual” (“utövning av befogenhet att för enskild bestämma om förmån, rättighet, skyldighet, disciplinpåföljd, avskedande eller annat jämförbart förhållande”).