FIFTH SECTION
DECISION
Application no. 1400/24
AIR EUROPA LÍNEAS AÉREAS, S.A.U
against Spain
The European Court of Human Rights (Fifth Section), sitting on 18 September 2025 as a Committee composed of:
Andreas Zünd, President,
María Elósegui,
Mykola Gnatovskyy, judges,
and Martina Keller, Deputy Section Registrar,
Having regard to:
the application (no. 1400/24) against the Kingdom of Spain lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) on 4 January 2024 by a Spanish company, Air Europa Líneas Aéreas, S.A.U. (“the applicant company”), which was represented by Mr I. Salama Salama, a lawyer practising in Madrid;
Having deliberated, decides as follows:
SUBJECT MATTER OF THE CASE
1. The application concerns the reimbursement of some of the subsidies received by the applicant company, an airline, under a subsidy scheme for the transport of residents of Spanish territories outside of peninsular Spain (namely the Canary Islands, the Balearic Islands, Ceuta and Melilla). The applicant company alleged a violation of Article 1 of Protocol No. 1 to the Convention, in relation to Articles 6 and 7 of the Convention.
2. The subsidy scheme was regulated by Royal Decree no. 1316/2001 of 30 November 2001, which established a discount on air and boat fares for residents of the above-mentioned territories when travelling to the rest of Spain or between islands.
3. The applicant company acted as a “collaborating entity” within the subsidy scheme: it applied the discount (at the relevant time, 50% of the fare) when issuing tickets to passengers and subsequently claimed for the disbursement of the relevant amount from the competent domestic authorities.
4. On 30 October 2015 the Directorate General of Civil Aviation (hereinafter “the DGCA”) ordered the applicant company to reimburse some of the subsidies received between 2009 and 2012 in respect of flight tickets issued under private contracts between the applicant company and other entities, by which the applicant company had provided flight tickets in exchange for publicity services.
5. The DGCA held that the subsidy had not been applicable to flight tickets issued under those contracts as there had been no evidence of the value of the publicity services provided in exchange for the flight tickets and, in any event, the value of payments in kind could not be objectively determined. Accordingly, there had been no “price paid”, nor had proper justification been provided in accordance with Royal Decree no. 1316/2001 and the General Law on Subsidies, which required the amount to be subsidised to be established with certainty. On the contrary, for the subsidies in question, the expenses to be subsidised had been calculated on the basis of a valuation made by the parties in their private contracts. Furthermore, the DGCA observed that the applicant company had provided misleading information when claiming the subsidy, as the fares indicated had been higher than the prices of the flight tickets it had in fact issued.
6. The DGCA concluded that the relevant subsidies should be reimbursed in accordance with section 37 of the General Law on Subsidies[1]. The applicant company was therefore asked to reimburse 11 million euros (EUR) in respect of subsidies unduly received and EUR 2 million in interest (that is, EUR 13,595,891.88 in total), as per section 40 of the same Law[2].
7. An administrative appeal lodged by the applicant company was dismissed on 17 April 2017. It subsequently lodged a judicial claim against the administrative decisions.
8. On 16 March 2020 the Madrid High Court dismissed the applicant company’s claim. It stated at the outset that the reimbursement of a subsidy in the event of the non-fulfilment of its conditions was not a sanction, since the purpose was to recover the sums awarded for the fulfilment of public‑interest objectives that had either not been achieved or had not been fully achieved. It further reiterated that subsidies were granted on condition of strict compliance with the obligations imposed on the recipient. The High Court noted that, in the present case, no price had been paid for the flights, either by the passengers or by the relevant entities, as the applicant company had not charged a sum for the flight tickets but had instead benefited from publicity services. Nevertheless, the applicant company had asked the domestic authorities to disburse the subsidy as if the flight tickets had indeed been paid for and it had borne the cost of the discount on their price. The High Court considered that there had not been a payment in money, but rather a payment in kind, whose exact value could not be determined. The reimbursement had thus been ordered on the basis of the applicant company’s non-compliance with the essential conditions of the subsidy. Furthermore, that non-compliance had encompassed the provision of misleading information, an action which had not been in the public interest, but in the interests of the applicant company and the relevant entities. In those circumstances, the proportionality principle could not be applied. Lastly, as the applicant company had indicated higher fares than it had in fact charged, the value of the actual fares had not been established and the exact amount of eligible expenditure had therefore not been clearly demonstrated, contrary to the regulations governing the subsidies.
9. On 21 June 2022 the Supreme Court dismissed an appeal on points of law lodged by the applicant company. It reiterated the necessity of strictly complying with the conditions of the subsidy, since the correct use of public funds, in accordance with the strict terms under which they had been granted, was of great importance for the general interest. It observed that neither the specific rules on the subsidy in question nor the general rules on subsidies allowed for the subsidisation of flight tickets issued in exchange for publicity services. On the contrary, the Royal Decree referred to “prices” and “fares”[3], which in the court’s view amounted to a cash payment and not to a payment in kind. The Supreme Court further noted that, although not applicable ratione temporis to the applicant company’s case, Royal Decree no. 1/2014 of 24 January 2014 imposed an obligation to register contracts that could be connected with the issuance of subsidised tickets, and that in the absence of such registration the relevant subsidies could not be claimed. Lastly, the Supreme Court confirmed that the proportionality principle was not applicable given the applicant company’s practice of providing misleading information and overcharging, and that the company had not shown that it had “acted unequivocally towards the fulfilment of its commitments”, as required by section 37 of the General Law on Subsidies in order to apply the proportionality principle.
10. The applicant company lodged an action for annulment with the Supreme Court, which was dismissed. The court stated that the action had been lodged only to reopen the debate on the matters which had already been decided in its previous judgment.
11. The Constitutional Court declared an amparo appeal lodged by the applicant company inadmissible for lack of constitutional relevance.
THE COURT’S ASSESSMENT
12. The applicant company complained that the reimbursement of the subsidies had amounted to a penalty and submitted that it could not have foreseen that it would be asked to reimburse the subsidies after having fulfilled the objective of transporting persons living outside of mainland Spain. It argued that the reimbursement had been ordered on the basis of a condition not included in the relevant rules, that it constituted retrospective application of a 2014 regulation, and that the reasoning of the domestic courts had therefore been arbitrary. Lastly, it argued that the order to reimburse all subsidies received in connection with the tickets in question had been disproportionate. The applicant company relied on Articles 6 and 7 of the Convention and Article 1 of Protocol No. 1.
13. The Court will start by examining the complaint under Article 1 of Protocol No. 1.
14. The Court notes at the outset that the reimbursement of the subsidy was ordered on the basis of the domestic authorities’ conclusions regarding the applicant company’s failure to meet its conditions. It must therefore analyse whether Article 1 of Protocol No. 1 is applicable ratione materiae by considering whether the applicant company can be said to have had a legitimate expectation of being able to retain the subsidies already received without its entitlement to those disbursements being called into question retrospectively (see Čakarević v. Croatia, no. 48921/13, § 54, 26 April 2018, and BCR Banca pentru Locuinţe S.A. v. Romania (dec.), no. 4558/20, § 127, 5 December 2023).
15. The Court has held that, as a rule, a legitimate expectation of being able to continue having peaceful enjoyment of a possession must have a “sufficient basis in national law”. It has also stated that an individual should in principle be entitled to rely on the validity of a final, or otherwise enforceable, administrative decision in his or her favour, and on the implementing measures already taken pursuant to it, provided that neither the beneficiary nor anyone on his or her behalf has contributed to such a decision having been wrongly made or wrongly implemented. Thus, while an administrative decision may be subject to revocation in the future, an expectation that it should not be called into question retrospectively should usually be recognised as being legitimate, at least unless there are weighty reasons to the contrary in the general interest or in the interest of third parties (see Čakarević, cited above, §§ 56-57, and BCR Banca pentru Locuinţe S.A., cited above, §§129-30).
16. The Court observes that, under sections 37 and 40 of the General Law on Subsidies, the beneficiaries of a subsidy and the collaborating entities must reimburse the sums received and the relevant interest accrued in the event of non-compliance with the conditions attached to the subsidy, its objectives, or the related obligations deriving from its receipt (see paragraph 6 above).
17. Thus, the Court considers that the applicant company must have been aware that its ability to receive the subsidies in question depended on the fulfilment of the relevant conditions and obligations, in the absence of which their payment could have been called into question retrospectively (see BCR Banca pentru Locuinţe S.A., cited above, §§ 132-34).
18. The applicant company did not submit any argument as to how the circumstances of the present case were capable of leading it to believe that it was entitled to receive the relevant subsidies (contrast Čakarević, cited above, § 63). Nor did it dispute that the authorities could review the subsidies already granted and demand their reimbursement should the relevant conditions not have been met. In the Court’s opinion, the domestic courts’ interpretation of the domestic law provisions regulating the subsidy conditions does not appear to have been arbitrary, manifestly unreasonable or unforeseeable, as argued by the applicant company (see BCR Banca pentru Locuinţe S.A., cited above, § 136). It observes in that regard that the applicant company did not provide any examples of domestic law or practice to support its assertion that the relevant rules had previously been interpreted as allowing transport services not actually paid for by a specific sum of money to be subsidised. Furthermore, the Supreme Court explicitly stated that the rules adopted in 2014 were not applicable to the applicant company’s case (see paragraph 9 above), so those rules were not retrospectively applied in respect of it.
19. The Court further notes that the domestic courts stressed that strict compliance with the subsidy conditions was in the general interest (see paragraphs 8 and 9 above), with which the Court agrees. Lastly, given that the domestic authorities considered the applicant company to be responsible for the situation as it had provided inaccurate information in order to receive those subsidies (see paragraphs 5, 8 and 9 above), it could be questioned whether the company acted in good faith (see, mutatis mutandis, UAB Profarma and UAB Bona Diagnosis v. Lithuania, nos. 46264/22 and 50184/22, §§ 219 and 230, 7 January 2025, and Agro Frigo OOD v. Bulgaria, no. 39814/12, § 51, 5 September 2019).
20. In the light of the above, the Court finds that, in the particular circumstances of the applicant company’s case, it could not have expected that its ability to continue to enjoy the subsidies unduly received would not be called into question retrospectively.
21. It follows that the applicant company’s complaint is incompatible ratione materiae with the provisions of Article 1 of Protocol No. 1.
22. Concerning the applicant company’s claim under Article 6 that the domestic courts’ interpretation of domestic law had been arbitrary, having regard to its previous findings (see paragraph 18 above), the Court finds no reason to consider that that interpretation was arbitrary or unreasonable or that the proceedings were otherwise unfair. It follows that this part of the application is manifestly ill-founded within the meaning of Article 35 § 3 and must be rejected pursuant to Article 35 § 4 of the Convention.
23. With regard to the complaint under Article 7 – namely, that the reimbursement had been a penalty and that it had lacked foreseeability – the Court notes that the domestic authorities stated that reimbursement was not a sanction and its only purpose was to recover public funds unduly allocated (see paragraph 8 above). The Court further observes that the applicant company was only ordered to reimburse the amounts unduly received and the relevant interest accrued and that no sanctions were imposed in the domestic proceedings, despite the range of sanctions that could be imposed under the General Law on Subsidies. In view of the foregoing, the Court finds that the nature of the contested measure was restorative and therefore did not constitute a “penalty” within the meaning of Article 7 of the Convention (see Longo v. Italy (dec.), no. 35780/18, § 68, 27 August 2024). It follows that this part of the complaint is incompatible ratione materiae with the provisions of the Convention within the meaning of Article 35 § 3 and must be rejected pursuant to Article 35 § 4.
For these reasons, the Court, unanimously,
Declares the application inadmissible.
Done in English and notified in writing on 16 October 2025.
Martina Keller Andreas Zünd
Deputy Registrar President
[1] The relevant parts of section 37 of the General Law on Subsidies read as follows:
“1. The sums received shall also be reimbursed and interest shall be charged … in the following cases:
(a) Obtaining the subsidy by falsifying the conditions required for it or concealing the conditions that would have precluded it.
(b) Total or partial non-fulfilment of the objective, the activity or the project, or failure to adopt the conduct on the basis of which the subsidy was granted.
(c) Non-compliance with the obligation to provide justification or provision of insufficient justification, under the terms established in section 30 of this Law and, where appropriate, in the rules governing the subsidy.
…
(f) Non-compliance with the obligations imposed by the administrative authorities on the collaborating entities and beneficiaries, [in relation to] the way in which the objectives are to be achieved, the activity is to be carried out, the project is to be executed or the conduct on the basis of which the subsidy was awarded is to be adopted.
(g) Non-compliance with the obligations imposed by the administrative authorities on the collaborating entities and beneficiaries, … when this makes it impossible to verify the use made of the funds received, compliance with the objective, [or] whether the subsidised activities have actually taken place and were carried out correctly …”
[2] The relevant part of section 40 of the General Law on Subsidies reads as follows:
“The beneficiaries and collaborating entities, in the cases referred to in section 37 of this Law, must reimburse all or part of the amounts received, plus the corresponding interest for late payment …”
[3] Section 2 of Royal Decree no. 1316/2001 states that, for its purposes, “fares for regular domestic air transport services shall mean the prices to be paid by passengers to airlines or their agents for their transport and that of their luggage”, as well as some supplementary charges and taxes. In accordance with Annex IV to the Royal Decree, the information to be reported by airlines to claim for the payment of the subsidy should include the exact amount charged for the fare and the amount of the subsidy, calculated on the basis of the legally established discount on the fare charged.