Passenger compensation for denied boarding: the limits to standard compensation, and an airline's obligations when re-routing under Regulation 261

By Simon Phippard, Sandra Nicolle

10-2019

Preliminary ruling for case C‑354/18

The Court of Justice of the European Union has clarified the scope of standard compensation provided under Regulation 261/2004, ruling that it does not cover losses that are unique to a claimant as a result of their personal circumstances. Such losses can be further compensated, where certain conditions are met, as appropriate under national or international law. The CJEU also clarified the duty of assistance of airlines in case of denied boarding: airlines are under an obligation to provide passengers with re-routing options at the earliest possible time to their final destination, and it is the airline's responsibility to prove they have set out the best options available if this becomes relevant before the courts.

Background

The claimants had booked tickets with Blue Air, to fly from Romania to England, where the claimants worked. The claimants were denied boarding, and rebooked on a flight which arrived in England five days later. The claimants did not request an earlier flight when this alternative flight was offered.
Blue Air offered the claimants the standard €400 under Regulation 261/2004. The claimants believed that this only compensated the nonpecuniary harm suffered, and that it was insufficient in their circumstances. They sought to increase that compensation before the courts, as well as obtain extra compensation for their pecuniary losses incurred in relation to lost wages, as "further compensation" under the Regulation. Blue Air argued that the claimants should not be entitled to compensation beyond the €400 offered as they never asked to be re-routed on an earlier flight. The court asked the CJEU to provide guidance in the interpretation of the articles surrounding further compensation and denied boarding in the Regulation. 

Referral to the CJEU

First, the CJEU was asked whether compensation under Article 7 of Regulation 261/2004 aims to compensate passengers for losses such as loss of wages, or if such losses can be compensated as "further compensation" under Article 12 of the Regulation; the CJEU was further asked how to assess such losses under the Regulation. 

Second, the referring Court asked whether the national judge may choose to deduct the standard compensation given under Article 7 from any further compensation granted under Article 12; and what criteria should be taken into account when deciding whether to make the deduction.
Third, the referring Court wanted to know whether pursuant to Article 4 and Article 8 the airline alone is responsible for providing the passenger with information on all options for re-routing under comparable transport conditions, to their final destination at the earliest opportunity, or whether the passenger is required to actively contribute to this search.

Fourth, the CJEU was asked who, of the airline and the passenger, must prove that re-routing was done under the minimum delay possible.

Preliminary Ruling

In the first part of the ruling, the CJEU stated that the standard and immediate compensation under Article 7 is granted to all passengers suffering from denied boarding, delays and cancellations, to save them the trouble of bringing a claim to national courts. As this compensation is identical for all these passengers, the CJEU held that it is only meant to cover the identical harm suffered. Neither Article 7, nor the rest of the Regulation, seeks to compensate individual losses inherently linked to the passenger's reason for travel. A loss of wages is a loss related to a passenger's personal circumstances, and requires a case by case review by the courts. The CJEU therefore concluded that such losses are not covered by the standard compensation provided for under Article 7 of Regulation 261/2004. 

The CJEU then set out the cumulative conditions under which a loss may be remedied by "further compensation" as permitted by Article 12 of Regulation 261/2004. A passenger is entitled to compensation for a harm individually suffered, where national or international law gives them this right, and where the harm is rooted in the denied boarding/delay/cancellation giving rise to a right to compensation. Loss of wages of the claimants in the underlying case met these conditions. Therefore, a loss of wages under such circumstances can be compensated under Article 12 of the Regulation.

As stated above, Regulation 261/2004 does not set out compensation for individual losses, and therefore does not set out how to quantify these either.  The CJEU therefore ruled that it was up to the national courts to identify and value the different elements of harm under the appropriate legal regime.

In the second part of the ruling, the CJEU replied that Article 12 does not impose a deduction of the standard compensation from any further compensation; and it does not forbid one either. National or international law governs the granting of further compensation. The first limb of Article 12 paragraph 1 means that the Regulation shall not interfere with a national judge's ability to grant passenger rights to further compensation – a compulsory deduction would be contradictory to that section.

In the third part of the ruling, the CJEU reasserted that where airlines deny boarding to a passenger, they have the obligation to provide the passenger with assistance under Article 8 of Regulation 261/2004. Under the Regulation, as summed up by recital 10, passengers must be provided with the choice of reimbursement or re-routing under satisfactory conditions; and as set out in recital 20, passengers need to be informed of their rights in order to exercise them effectively. The CJEU ruled that in light of these sections, airlines must present to passengers who have been denied boarding exhaustive information on all the possibilities of re-routing at the earliest opportunity. Passengers have no obligation to contribute to the search for information.

In their reply to the final question, the CJEU began by listing criteria that the airline must take into consideration when making re-routing proposals to their passengers. An airline may be expected to take into account the time of arrival at final destination, the conditions under which the re-routing would be carried out, and whether the airline can handle the passengers itself or whether it will require the help of another air carrier. This responsibility to propose and organise alternate routes to destination naturally implies that the burden of proving re-routing with minimal delay lies with the airline.

Key points for Airlines

On the one hand, compensation under Regulation 261/2004 only serves to compensate passengers for the "standard" harm they all suffer; and on the other, national judges remain free to grant passengers further compensation for their own individual harm, as appropriate under the applicable laws. What is more, passengers are not expected to mitigate their losses where their arrival at destination is delayed for denied boarding or cancellation. It therefore appears unlikely that the referring court will take into account that the claimants did not ask to be re-routed on an earlier flight. The wording of Article 8.1.(b) of Regulation 261/2004 does give passengers the right to be re-routed at "the earliest" opportunity. This judgment appears to impose strict obligations on airlines while emphasizing that "further compensation" is a matter of national law. It will be of interest to see whether domestic courts prove more sympathetic to an airline in circumstances where local law ordinarily imposes a duty on a claimant to mitigate, particularly if simple steps might have reduced the loss.