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					      Compensation & Assistance
                 or
        Chaos and Ambiguity?
       (A review of EU Regulation 261/2004)

WACRA (World Airline Customer Relations Association)
               26 September 2005


                     Andy Clarke
             Director Air Transport Policy
Regulation 261/2004 solves
passengers’ problems?

XXX Airline passengers are forced to hire bus to get
home after their flight is cancelled

Stranded XXX airline passengers were forced to hire a bus
and drive 600 miles home after their flight was cancelled
because of bad weather. They were told that the next
aircraft out of a small French airport would be in 10 days
time.
                    When did this occur?

                   5 September 2005
Regulation 261/2004 solves
passengers’ problems?

                     XXX Airline website:

If flights are cancelled by XXX Airline and no suitable
alternative flight is available, we will, upon application, fully
refund all monies paid in respect of the cancelled flight,
without further liability.

                 A breach of the Regulation?
Regulation 261/2004 solves
passengers’ problems?

                  YYY Airline website:

If your flight is cancelled as a result of extraordinary
circumstances:
………………….

If your flight is cancelled other than as a result of
extraordinary circumstances which could not have been
avoided even if all reasonable steps had been taken:
………………….
      Accurate but perhaps unhelpful to passengers?
 The complexity of the law
Involuntary Denied Boarding

EU law, dating from 1991, held
airlines responsible for
compensating passengers for
denied boarding in circumstances
when payloads are reduced for
reasons outside the airline’s control,
such as payload restrictions arising
from runway restrictions (illustrated
here) or adverse weather – the USA
“denied boarding” rule excludes
these circumstances

From 2005 passengers are not
granted “denied boarding” rights
when an airline “has reasonable
grounds to deny boarding”
 The complexity of the law
Involuntary Denied Boarding

   All rights apply unless “there
   are reasonable grounds to
   deny boarding”

   Amount of COMPENSATION
   depends on
   how far to “last destination at
   which passenger will be
   delayed” and
   by how long the passenger’s
   arrival there will be delayed
 The complexity of the law
Involuntary Denied Boarding

   Right to CARE - appropriate
   meals, accommodation if “stay
   of one or more nights becomes
   necessary”, and
   communications
   Right to REFUND – amount
   depends on:
   whether passenger chooses
   not to travel;
   how much of journey already
   made “serves no purpose in
   relation to the original travel
   plan”
OR Right to REROUTING - now or
   later
 The complexity of the law
Voluntary Denied Boarding

     In addition to the package
     offered by the airline and
     accepted by the passenger, the
     passenger has

     Right to REFUND – amount
     depends on:
     whether passenger chooses
     not to travel;
     how much of journey already
     made “serves no purpose in
     relation to the original travel
     plan”
OR
     Right to REROUTING - now or
     later
  The complexity of the law
Cancellation

EU law holds airlines responsible
for providing care (including meals
and accommodation) and providing
a choice of refund, rerouting, or
travel at a later date for all
passengers affected by a
cancellation, irrespective of the
cause – an extreme event leading
to flight cancellations is illustrated
here
 The complexity of the law
Cancellation

   Right to COMPENSATION
   depends on:
   when you are told;
   how much earlier or later your
   new flight is;
   whether there are
   extraordinary circumstances

   Amount of COMPENSATION
   depends on
   how much later your new flight
   is;
   how far you are flying
 The complexity of the law
Cancellation

     Right to CARE - appropriate
     meals, accommodation if
     travel is delayed “until next
     day”, and communications

     Right to REFUND – amount
     depends on:
     whether passenger chooses
     not to travel;
     how much of journey already
     made “serves no purpose in
     relation to the original travel
     plan”
OR
     Right to REROUTING - now
     or later
 The complexity of the law
Delay

EU law holds airlines responsible for
providing care (including meals and
accommodation) and providing a
choice of onward travel or a refund
for all passengers affected by a long
delay, irrespective of the cause –
extreme icing conditions as
illustrated here are an example of a
cause of flight delays
 The complexity of the law
Delay

    Right to CARE after 2, 3 or 4
    hours depending on length of
    flight - appropriate meals,
    accommodation if departure is “the
    day after” the scheduled time, and
    communications

    Right to REFUND after 5 hours -
    amount depends on:
    whether passenger chooses not to
    travel;
    how much of journey already made
    “serves no purpose in relation to
    the original travel plan”
BUT NO
    Right to REROUTING
The complexity of the law

Downgrades

   Right to PARTIAL REFUND

   Amount depends on
   the price originally paid and
   the length of flight (with an exception to the rule for
   flights between member states and French overseas
   departments)
Likely differences of opinion

A flight is cancelled - Is compensation payable?

   Are there extraordinary circumstances?
   If so, are they extraordinary circumstances within the
   meaning of the Regulation?
   Was the passenger told of the cancellation – and can
   the airline prove it?
   When was the passenger told of the cancellation – and
   can the airline prove it?
   If the passenger was notified less than 14 days ahead,
   how much earlier is his new flight departure and how
   much later is his new flight arrival?
Likely differences of opinion

Refunds

   How much of the journey should be refunded?
   When should the ticket be refunded in full?
   When should a new flight back to the point of origin be
   offered?
Likely differences of opinion

Care

   If a flight is delayed from 2100 to 0300 must a hotel
   room be provided?
   If a passenger has a right to a refreshment voucher
   when his short-haul flight is delayed from 1000 to 1200,
   why is he not entitled to one when his long-haul flight is
   delayed from 1000 to 1345, as he is likely to be in
   greater need?
Likely differences of opinion

Downgrade

   The amount of the refund depends on the price of the
   ticket – does this mean the total price or only the price
   for the sector(s) on which the passenger is
   downgraded?
   What is the price for the affected sector if the ticket is
   anything other than a single or simple return journey?
Enforcement

EC and states’ enforcement action

   EC called meeting of enforcement agencies in May
        Possibility that EC would suggest that airlines should pay
        compensation for technical cancellations
        Action by ERA to alert authorities to safety implications
        Informal feedback suggests that EC’s approach considered
        unhelpful by enforcement agencies
   Enforcement agencies met informally in Aug
   EC to call further meeting? (now postponed from 30 Sep)
   ERA unaware of any major difficulties with enforcement
   agencies, and not alerted to any legal challenges
IATA/ELFAA legal challenge

IATA/ELFAA legal challenge

   Grounds of legal challenge:
        Conflict with Warsaw/Montreal Conventions
        Abuse of EU legislative “conciliation” process
        Disproportionate sanctions
        Discrimination compared to other modes of transport
   Oral hearing July 05
   Advocate General’s Opinion Sep 05 unfavourable
   Final judgement before end of 2005?
   If final judgement is favourable, it is unclear how the
   implementation of the Regulation will be affected
EC maladministration?

ERA charge of maladministration against
   European Commission

    Based on incorrect and misleading
    information published by EC in Jan
    and Feb 05 on:
         Posters
         Leaflets
         Information on website
         Video on website
EC maladministration?

ERA charge of maladministration against European Commission

   Case opened by European Ombudsman in May
   Ombudsman required reply from EC by 31 Jul
   EC given extension to 30 Sep
   ERA has one month to review EC reply
   Ombudsman’s role is to seek amicable solution
Is Reg 261/2004 a good law?

Consumer law should be
clear and unambiguous

Remedies should be
proportionate

Does Regulation 261/2004
meet these conditions?
Is Reg 261/2004 a good law?
                  Regulation 261/2004 is
                  broken

                  Regulation 261/2004 should
                  be fixed

                  Under EU law-making
                  procedures, only the
                  European Commission can
                  start to fix it


                  ERA asks the
                  EC to act now!

				
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