12 OCTOBER 2015


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Article from BTNews 12 OCTOBER 2015

COMMENT: The real cost of the new compensation ruling?

Perish the thought that  BTN  should be seen to be political, but Europe has been at it again, this time with a ruling from the Court of Justice.

The mandarins who brought us human rights legislation that everybody duly applauded until someone pointed out there were elements to it that didn’t quite gel with what happened in real life have now divested themselves of a judgment on airline compensation. Again, initial approval has subsided rapidly, at least in the industry, as the implications sink in.

That old saying about babies and bathwater springs to mind as experts in the field take a cold hard look. Among them is aviation lawyer Arthur Flieger, who says the "absurd" use of compensation rulings for air travellers "will mean higher ticket prices."

In a no-holds-barred statement, Flieger said: "With its recent judgement of 17 September, the European Court of Justice has unjustly made things particularly difficult for airlines and has completely ignored reality in an industry which is in any case going through a difficult period.

"The fact is that anyone with a little bit of luck may be able to collect up to €600 in compensation for a delay or cancellation, even with an air ticket of a few euros. 

"Carriers are increasingly being forced by courts to cough up compensations. Eventually, passengers will be footing the bill for the absurd use of passenger rights. In the long term, compensation payments will mean higher ticket prices."

In a nutshell, the judgment by the Court said even unforeseen technical problems do not discharge airline companies of their duty to pay the prescribed compensation. In the case concerned, two vital aeroplane components broke down unexpectedly and new components had to be flown out, resulting in a delay of 29 hours. The airline appealed to unusual circumstances and refused to pay compensation.

Flieger said the ruling meant the European Court now prescribes as a general rule that "technical problems can certainly give rise to unusual circumstances, but only if it is a matter of elements such as concealed manufacturing faults, sabotage, or terrorism." In this case, as in many others, it was a matter of a technical flaw, which, according to the Court, is inherent to the normal exercise of the airline company, i.e. not a circumstance beyond its control.

"Some people are branding the Court’s judgement as a heavy defeat for the airlines and a fantastic victory for travellers," Flieger went on. "(But) anyone who stops to think realises that this is sheer nonsense. 

"Passengers will eventually pay the price for the compensation awarded because this will certainly lead to higher ticket prices. 

"Won’t those higher air travel prices, which include all a carrier’s costs, discriminate against passengers who have not suffered any delays and have therefore received no compensation?"

The lawyer’s summary: "In the event of cancellations, transfers, or delays of over three hours, air passengers are entitled to these substantial ‘remunerations’ in the form of financial compensation, which can run up to €600. 

"This gives joy at travel misfortune and possibly has an adverse effect on safety." 

And one more interesting point – what about other forms of transport? No comparable and similar ruling there, because air passengers, unlike train, ferry, or car travellers, are pampered much more. 

Car travellers who encounter lengthy motorway traffic jams caused by the weather or roadworks just have to put up with it since they are not entitled to any form of compensation. 

So far.

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OUR READERS' FINEST WORDS (All times and dates are GMT)

All comments are filtered to exclude any excesses but the Editor does not have to agree with what is being said. 100 words maximum

Alan Bowen, Harrow

The airlines have spent millions of pounds trying to deny the law but both the UK Supreme Court and now the European Court have sided with consumers. The truth is most will never make claims if only the airlines would treat customers fairly and keep them informed at the time of the delay. The EU Commission estimates the cost to be between 50 cents and 2 Euros and some airlines, Ryanair for example, have been charging customers £2.50 per ticket to go into a war chest since 2010 so fares will not rise as a result. If the airlines had spent a quarter of the cost of defending the indefensible in employing a lobbyist to talk to the Commission about changing the law, they wouldn't be in the alleged mess they claim to be in.

mike carrivick, Berkshire

The ruling is intrinsically wrong. It is penalising airlines for adherence to the mandated safety regime. Airlines are, rightly, obliged to offer care/assistance under these circumstances but 'fining'them for every technical delay is a judgement made form outside the world of reality.

Peter Evans, Cheshire

Over the years, airline dod themselves no favours. They had plenty of opportunity to acknowledge responsibility and compensate passengers but their failure to do so led to the imposition of much more rigourous and damaging legislation. Look at how the rail industry in the UK introduced their own version of a compensation payments scheme and thus deferred regulation, which was also less significant when it arrived. The airlines have also been in competent dealing with the regulators . Instead of bleating about the unfairness of it they should have focused on the competitive disadvantage that EU261/2004 creates between aviation and other transport modes. Whilst I agree that the regulation is entirely unfair to airlines, airline are getting just reward for their ignorance, arrogance and incompetence.

Mike A Ambrose, Windsor Road, ASCOT, England

It would be unfair to blame solely the incompetents within the ECJ and the EC. Some time ago there was a public admission by the European Parliament that an early judgement from the ECJ on Regulation 261 went directly against the intention and will of the European Parliament. In practice, the EP admitted that the ECJ had, by its judgment, changed the law. Yet, although previous instances in other industries were cited as similar examples of ECJ manipulation, what should have been a howl of protest from our democratic EP was not even a squeak.

Rian van der Borgt, Leuven

You may want to check Regulation 1371/2007 on Rail passengers\'rights and obligations. Compensation for delay must also be paid in case of force majeure, which has been confirmed by the European court of Justice.