Airlines are less than happy with EU legislation compensating passengers for delayed or cancelled flights. Are they right or are changes called for? Colin Ellson investigates The European Union’s one-size-fits-all philosophy has standardised everything from the shape of a banana to the dimensions of a sausage, attracting grumbles but no rioting on the streets. When they issued EC Regulation 61/04, however, unifying compensation for airline passengers denied boarding, the bureaucrats of Brussels might have bitten off more than they could chew.
In essence, the legislation seems fair and equitable, an attempt to sort out a thorny subject which has caused anger ever since a growing aviation industry made it possible for the world and his wife to fly – or not if a flight were overbooked. Applying to passengers flying from an airport in an EU member state or from a third country to Europe, the regulation sets down travellers’ rights if they are denied boarding or their flight is cancelled or delayed. For cancellations or denied boarding, individuals are entitled to reimbursement of the ticket cost, a return flight to the first departure point or re-routing to the final destination, together with refreshments, meals, hotel accommodation, transport, phone calls and e-mails. Those left behind in the terminal can also claim €250 ($299) for flights of 1,500km or less, €400 ($479) for intra-community flights of more than 1,500km or a non-intra EU trip of between 1,500km and 3,000km, and €600 ($719) for all other flights. In addition, the airline must provide free meals and refreshments for delays of two hours or more, options such as refund of the ticket cost when they spiral up to five hours, and accommodation and transport when a service is postponed to the next day. And travellers who are downgraded qualify for a cash refund based on distance flown. For passengers, the legislation sounds like an amalgamation of Magna Carta and the American Constitution. Not so for the airlines. Almost to a carrier, they have voiced concern that compensation must in some cases be paid for circumstances beyond their control, and is based on the duration of proposed flights rather than the price paid for the ticket, which mitigates against low-cost carriers charging peppercorn fares. Heading the stand-off, easyJet, one of Europe’s leading low-fares airlines, has called on the European Commission to review the rules following the recent failure by the European Court of Justice to strike down what the International Air Transport Association describes as “deeply flawed regulations”. IATA maintains the regulation conflicts with the Montreal Convention, the global standard for passenger compensation, by making airlines liable to provide assistance even in cases completely outside their control, such as delays due to bad weather, strikes by air traffic controllers, or capacity limitations. Says the association’s director general and CEO Giovanni Bisignani: Penalising airlines in such cases does nothing to address these important issues. It only adds US$700 million in costs that will have to be recuperated. Higher costs for air transport with no added value does not pass the good regulation test, let alone the common sense test. “Moreover, by ignoring the Montreal Convention, Europe’s short-sighted regional approach leaves the door open for other jurisdictions to do the same. Instead of a global standard universally applied, we could end up with nothing more than chaos.” Toby Nicol, easyJet director of communications, gets to the nub of the budget airlines’ case in financial terms. “I simply do not understand why easyJet should pay €250/$299 in compensation when our passengers pay on average €60/$72,” he says, “or why easyJet should pay for hotels when a government decides to close airspace for a big event. The majority of delays are due to air traffic control, something the EU actually governs and yet airlines cannot seek any form of compensation…” EasyJet says it will work with other airlines to seek serious improvements to “one of the EU’s worst pieces of legislation”. But, like most fellow carriers, it supports the need to provide passengers with assistance and compensation where due and to respect their statutory rights. The EU’s new regulation has already been put to the test by an Oxford don who brought a case against Thomas Cook Airlines in the UK’s small claims court. He held that the carrier had broken European law by moving a Vancouver flight from London Stansted to Manchester and then overnighting passengers before departing the following morning. The airline counter claimed that the move was made for technical reasons beyond its control and that the flight had been delayed, not cancelled, as the replacement aircraft carried the original flight number. The district judge dismissed this argument, ruling that the fact the same flight number was used had no bearing on the issue. The time differential of 24 hours was more indicative of cancellation than delay, he said, awarding in favour of the plaintiff. So the first shots have been fired in what could become a litigation nightmare for the carriers, although Thomas Cook Airlines has said it is unlikely to take the case to a higher court as this would set a legal precedent. The new legislation, says Giovanni Bisignani, was the final piece of the previous European Commission’s legacy of failure with respect to air transport policy. Now, IATA would approach the current Commission to seek remedies to the regulation’s many flaws, continuing to lobby for a common sense approach by regulators to the air transport industry. A vain hope, perhaps, given Brussels common sense approach to sausages.
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