Mike Ambrose comments on the soon to be implemented flight compensation legislation in our monthly dissertation by a senior member of the air travel industry.
”ABTN”s On Tour of 9 February ”In the far north” concerning the Shetlands illustrates the point very clearly that the new European Union legislation on passengers who are bumped will make it much more expensive for Loganair to operate to the far north. The already expensive airfares will have to increase. Whilst only a tiny outpost of Europe, Loganair”s problems are a reflection of even greater difficulties for Europe”s small air carriers across the face of the Union.
Did I say legislation on passengers who are bumped? This is an inappropriate term for the most inept piece of EU air transport legislation that ERA has witnessed in its 24-year existence.
The new legislation, due to be implemented early in 2005, provides for compensation and assistance for air passengers in the event of denied boarding, cancellation or delays. Does this sound reasonable? Of course, which is why Europe”s ministers and Parliament were unable to reject out of hand the proposal that the Commission published in 2001.
On the surface, the new legislation simply updates the law on denied boarding compensation that has existed for 12 years. Whilst the Commission had initially proposed a five-fold increase in compensation, ministers and MEPs saw sense and made changes more in line with general inflation. There should be no complaints so far.
However, new complexity has been introduced. Instead of the existing three levels of compensation (EUR 75, 150, 300) depending on distance and by how long the passenger will be delayed, there are now six (EUR 125, 200, 250, 300, 400, 600). How complex can consumer protection legislation become and still be understood both by passengers and by the staff attempting to administer the rules?
But there is much more. Presently, if a passenger who is denied boarding chooses not to travel, he or she must be refunded the value of the ticket. A passenger travelling from the Shetlands to London should expect no less.
The new law moves into groundbreaking territory with its extension to delays and cancellations. It requires refunds to be offered to passengers if their flights are delayed by over five hours or cancelled. Reasonable? Not when you know that the refund relates also to travel on other airlines. The law makes Loganair (not British Airways) responsible for offering full refunds for full journeys.
Suppose bad weather causes a flight to be cancelled from Lerwick to the UK mainland. Not too difficult to imagine. A passenger making a round trip from Lerwick to Osaka using BA to London and Japan Airlines from London decides not to travel on a later flight. The ticket is non-refundable. Loganair is responsible for refunding the entire ticket. Is this fair to Loganair? Is this fair to Loganair”s other passengers who will have to foot the bill?
It gets worse. Suppose the passenger started the journey in Japan. The passenger claims that the delay to their trip to London has negated the whole purpose of the trip. Now Loganair must not only refund the passenger”s entire round trip but must also pay for a new one-way ticket to repatriate the passenger to Osaka.
And there is yet more. Whilst waiting for the weather to clear, Loganair (again not British Airways) must provide hotel accommodation and full meals for all passengers stuck at both ends of the route.
To add insult to injury, the European Commission rejected a formal request by ERA for a full evaluation of these proposals before they passed into law. They rejected the request even though no such legislation exists anywhere else in the world. ERA assesses the cost of the new law as at least E1.5bn per year to Europe”s airlines. These costs can only be recovered in higher fares.
Yes, it will certainly get more expensive to travel to and from the Shetlands! And for that matter anywhere else in Europe too!