12 December 2022, etc.venues Monument, London
Business Travel Show Europe, presented by The BTN
21 November, London Hilton Metropole
Industry fears allayed by suspension of flight-delay compensation claims.
IN 2009, A EUROPEAN COURT OF JUSTICE (ECJ) ruling about passengers' rights left the airline sector in a state of shock. Carriers said the ECJ judgment had extended travellers' rights regarding flight delays so much that it was causing economic hardship to the airline community, which was never what the regulations intended. The High Court, pending a further interpretation from the ECJ, has now suspended the decision.
In effect since 2005, EC Regulation 261/2004 established rules for compensation and assistance that airlines were obliged to give to passengers in the event of denied boarding, cancellation of flights or long flight delays. Since its introduction, the regulation has become a battleground between lobby groups and politicians seeking to extend passengers rights, and airlines seeking to preserve those areas where liability has traditionally been excluded. A particular area of contention for airlines relates to compensation for cancelled flights caused by technical difficulties with aircraft. The courts are regularly asked to determine whether a particular technical fault occurring on an aircraft is sufficiently outside the scope of its usual operations so as to justify an exemption to passenger compensation due to extraordinary circumstances. Another point of disagreement, following the huge number of claims arising from the volcanic ash disruption, has been the right to care and overnight accommodation during an extended flight delay. These two areas currently generate hundreds of legal claims in the small claims court.
To these can be added a third area of conflict, which comes under the parts of Regulation 261/2004 dealing with extended flight delays. At present, Articles 6 and 9 oblige airlines to offer care to passengers experiencing a delay, including meals and refreshments, and hotel accommodation where appropriate (this is what arose during the volcanic ash episodes). However, where a flight is cancelled, Article 5 of the regulations obliges the airline to pay compensation of €250 per passenger for flights up to 1,500km, €400 for flights up to 3,500km, and €600 for flights of a longer duration. One only needs to imagine the numbers of passengers involved with cancelled flights to understand what a big-budget item this might be.
November 2009 saw the joint judgment on Sturgeon v Condor and Bock v Air France being published to the horror of the airline community. Both cases had been referred to the ECJ for a preliminary ruling on Articles 5, 6 and 7, where passengers were asking for financial compensation for cancelled flights when their delays amounted to, respectively, 25 and 22 hours.
Having considered all of the facts of the case and the legal arguments, the ECJ extended the scope of the regulations by interpreting them to mean that passengers whose flights were delayed may be treated in the same way as passengers whose flights are cancelled, when the delay is three hours or more, unless the airline can prove that the delay was caused by extraordinary circumstances that could not have been avoided even if it had taken all reasonable measures (that is, circumstances beyond the actual control of the airline).
This means that passengers who are delayed by three hours or more may get the compensation mentioned above in the same way as if the flight was cancelled completely. This ECJ decision has resulted in severe financial consequences for airlines, and seems to go far beyond what the regulations were initially intended to achieve. Flight delays of three hours are not uncommon, and are often the result of a series of events, such as the late arrival of the inbound aircraft, other aircraft missing their take-off slots, congestion at the airport, bad weather (not necessarily around the airport itself) and general airport problems. To saddle airlines with substantial liability for short delays, often out of their control, puts increased financial pressure on an already struggling sector.
In August 2010, British Airways, TUI UK and Easyjet, along with the International Air Transport Association (IATA), applied to the High Court for a judicial review relating to compensation claims in respect of delays of three hours and more, and sought to suspend the ECJ judgment in the Sturgeon case. Having heard the arguments from the airlines, the High Court has referred the matter back to the ECJ for a further ruling. This process is likely to take until the spring of 2012 before any changed view emerges. Meanwhile, claims in the English courts for compensation relating to three-hour-plus delays are suspended.
Most of the business travel community acknowledges the difficulties of operating flights to a strict timetable - one only has to travel through London Heathrow to recognise that it is the M25 of the world's airports, and where departure times are inevitably optimistic. However, to punish airlines to such a degree (just imagine an A380 with 600 passengers delayed beyond three hours - that would result in compensation up to €360,000) is simply a step too far for passenger rights.
There have been other airline victories to celebrate in recent months. Screen scraping - the practice whereby an unauthorised company copies information (for example, tickets prices and other travel products on offer) from a legitimate site for use by a third party website - has been the subject of much debate and litigation. Airline website terms usually prohibit unauthorised trade sales, and airlines argue that scraping results in the loss of control of distribution and gives rise to unacceptable pricing. However, this September Ryanair succeeded in the Commercial Court of Barcelona in halting the actions of Spanish screen-scraping website Atrapalo, on the basis that Ryanair alone could exclusively distribute its fares on its own website.