Update on European Commission’s proposal to reform airline passenger rights [regulation 261]

15 March 2013

Almas Daud

Last week the European Commission published proposed revisions to Regulation 261 which would be the first change to the regulation since it was introduced 9 years ago.  The reforms, if approved, will come into force in early 2015.

As previously reported in ECJ rules delayed passengers have rights to compensation, the European Court of Justice (ECJ) recently ruled that, except where the delay is caused by ‘extraordinary circumstances’, passengers whose flights are delayed by 3 hours or more have a right to compensation in the form of a fixed amount from the airline (between €250 and €600 per passenger). This ruling upheld the controversial decision in Sturgeon and Others [2009].

Following the affirmation of the Sturgeon ruling, airlines have been inundated with compensation claims, which place a heavy administrative, and financial, burden on their operations.  For example, airlines have faced a bill of more than £1bn as a result of the delays caused by the eruption of the Eyjafjallajokull volcano in Iceland, in April 2010, alone.

The main proposed changes include the following:

  • Clarification as to what ‘extraordinary circumstances’ means;

  • The obligation on airlines to inform passengers as soon as possible that a flight has been delayed or cancelled.  Information must be given within 30 minutes after the scheduled departure time;

  • It is proposed that compensation will only be paid where flights have been delayed by at least 5 hours;

  • If a flight is delayed on the tarmac by more than an hour, passengers’ rights to care and assistance will be activated (use of the toilets, air conditioning, water etc); and

  • If an airline cannot ensure re-routing of the flight within 12 hours on one of its own flights, it must offer a replacement flight with another airline.

Further suggested changes are that airlines will only have to pay for hotel accommodation for a maximum of 3 nights; airlines will have to acknowledge complaints within a week and formally respond within 2 months; and passengers may request, free of charge, the correction of spelling mistakes in their name up to 48 hours before departure.

The measures are intended to clarify all the ‘grey areas’ in airline passenger rights and also to somewhat quell the backlash from the recent ECJ decisions and their impact on airlines. However, there remain serious areas of ambiguity and uncertainty which, if not resolved before the revisions are approved, will cause airlines and passengers to have to incur costs to seek clarity through the courts.

Although it appears that the reforms will, to a certain extent, reduce the current burden on airlines’, the airline association IATA has already indicated that it does not believe that the changes have gone far enough. Others have suggested that if the proposals are implemented and enforced it is likely to result in a rise in fares.

With the reforms yet to be approved by Member States and European Parliament, it remains to be seen how many of the proposed changes will make the final cut, and what impact these will have on airlines.

We will be providing further updates on this piece of legislation as it develops.

For enquiries or further information, please contact Simon de Broise or Stuart McGinn, Associates in Bird & Bird's International Aviation Group.

Partners in our International Aviation Group Robin Springthorpe or Paul Briggs.