EU regulation: Travel complaint handling

In a recent article, Travel Law: Flight Delays: Stop Making Passengers Pay (ETN March 20, 2014) we discussed how three different legal systems required [European Union Regulation (EC) No.

EU regulation: Travel complaint handling

In a recent article, Travel Law: Flight Delays: Stop Making Passengers Pay (ETN March 20, 2014) we discussed how three different legal systems required [European Union Regulation (EC) No. 261/2004 [EU 261] and Montreal Convention Article 19] or didn’t require [US tariff system] airlines to compensate passengers for flight delays [with the exception of oversales or airline overbooking] concluding that EU 261 was the best and the US tariff system was the least accommodating to the needs of delayed passengers. In this article we shall examine EU 261 more closely in terms of its application, compensation levels, its effectiveness during the period 2010 to 2012 [see European Commission Staff Working Document: Complaint Handing And Enforcement By Member States of the Air Passenger Rights Regulations (May 7, 2014) (EU Complaint Handling Report) and recommendations for future changes to make EU 261 even better.

Application

An excellent summary of EU 261 appears in Wikipedia [last visited May 23, 2014]. EU 261 applies to any passenger departing in a commercial aircraft from an EU member state or traveling to an EU member state on an airline based in an EU member state if the passenger has a confirmed reservation, arrived timely at check-in and does not apply to free or discounted tickets not available to the general public except tickets issued through a frequent flyer program. EU 261 does not apply to helicopter flights or flights from Gibraltar Airport.

Much like the “Rock of Gibraltar”, most US courts that have considered the application of EU 261 have followed the ruling in Giannopoulos v. Iberia that “EU 261 does not create a cause of action in US courts” and “even if the European Commission intended that US Courts be permitted to enforce its provisions-which the Court has held it did not-the Could would dismiss Plaintiffs’ claim” because it is impliedly preempted by the Airline Deregulation Act [see also Lozano v. United Continental Holdings (EU 261 not intended to be enforced outside the EU); Volodarsky v. Delta Air Lines (EU 261 does not provide a private right of action in US courts); Compare Polinovsky v. Deutsche Lufthansa (“plaintiffs have a right to proceed in this court despite the existence of an alternative enforcement mechanism under the EU”)].

Denied Boarding

Much like the US provisions regarding oversales [14 CFR Part 250] EU 261 provides that the airline must first seek volunteers to give up their seats for some form of negotiated compensation. If insufficient volunteers come forward then bumped passengers may be entitled to all three forms of EU 261 compensation including cash, rerouting and refunding and meals, communication and accommodations [e.g., meals and refreshments as needed depending upon the length of the delay, two telephone calls, fax or telex messages or emails and hotel accommodations and transport between the hotel and the airport, depending upon the circumstances].

Cancelled Flights

Cancelled flights mandate that passengers will have their choice of immediate re-routing to the same destination, later re-routing at the passenger’s convenience or a refund of the ticket price [in cash, electronic bank transfer, bank draft or check or with the passenger’s consent, travel vouchers] and a return flight to the departure point if the initial leg has no purpose because of the cancellation. In addition, passengers are entitled to refreshments, communication and accommodations as appropriate. In addition, cash compensation is required of E 250 [flight type 1 (less that 1500 km], E 400 [flight type 2 (1500 to 3500 km] and E 600 [flight type 3 (not within EU of greater than 3500 km], as limited by timely notification of the cancellation by the airline.

Delayed Flights

Delayed flights [2 hours for flight type 1, 3 hours for flight type 2 and 4 hours for flight type 3] require the airline to provide refreshments, communications and accommodations as appropriate. If the delay is 5 or more hours, passengers may cancel their flight and obtain a refund and a flight back to the departure point if appropriate. Now what distinguishes the EU from the US in terms of how to compensate passengers for delayed flights is that EU Courts have held that a delay of more than 3 hours is equivalent to a cancellation in terms of the availability of cash compensation.

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This was made clear in Sturgeon v. Condor and Bock v. Air France (C-402/07 and C-432/07) which held that “Articles 5, 6 and 7 of Regulation EC 261/2004 must be interpreted as meaning that passengers whose flights are delayed may be treated, for the purposes of the application of the right to compensation, as passengers whose flights are cancelled and they may thus rely on the right to compensation laid down in Article 7 of the regulation where they suffer, on account of a flight delay, a loss of time equal to or in excess of three hours, that is, where they reach their final destination three hours or more after the arrival time originally scheduled by the air carrier (unless the airline can raise a defense of extraordinary circumstances)”. This ruling was reconfirmed by the European Court of Justice in Nelson v. Deutsche Lufthansa AG (2012) C-581/10. As far as the definition of “extraordinary circumstances” the Sturgeon Court held that technical faults in the aircraft will not be covered. An example of extraordinary circumstances would be the 2010 eruption of the Icelandic volcano Eyjafjallajokull and the resulting cloud of ash that spread over Europe [see Denise McDonagh v. Ryanair Ltd (C-12/11)] but even such events would not release the airline from caring for its passengers.

EU Complaint Handling Report

“The present statistical document responds to the continuous calls from various sources (inter alia the European Parliament, Member States and air transport industry) for statistics on complaint handling enforcement” based on data provided by the National Enforcement Bodies (NEBs) of the 28 Member States and Iceland, Norway and Switzerland. During the period 2010 to 2012 NEBs received a total of 201,879 complaints under EU 261 of which there were 91,726 in 2010, 53,675 in 2011 and 56,478 in 2012.

“The numbers recorded show that sanctioning as a means to ensure compliance with the Regulation was not widely made use of. NEBs applied sanctions rather as an exceptional remedy. Moreover, even where sanctions were imposed, Member States had difficulty in collecting them, partly owing to time consuming administrative and/or legal procedures”.

Data Of Delays and Cancellations

The EU Complaint Handling Report “also gives an overview of the quantitative data for delays…During the period 2010 to 2012 the total number of flights in Europe was 29.8 million…less that 1% of those flights were delayed more than two hours…In relation to the rights passengers are entitled to under (EU 261) and considering the different trigger points for different rights, depending on the duration of the delay in relation to the duration of the flights, during the reporting period (2010-2012)…passengers were entitled to: care and assistance on 1.23% of all flights; reimbursement on 0.71% of long-haul flights compared to less than 0.1% on short-haul flights and 0.31% of medium-haul flights; compensation on potentially 1.55% of long-haul flights compared to 0.37% of short haul and 0.86% for medium-haul flights. Despite the low values of these percentages, the EU rules on passenger rights represent an average cost of between 0.6% and 1.8% of the airlines’ turnover…but for certain airlines it can be more than 5%. This corresponds approximately to between E 1 and E 3 per one-way ticket”.

New EU Proposals

In March of 2013 new EU passenger rights legislation was proposed seeking to fine tune the balance between the needs of airlines and passengers. “The revision mainly aims at confirming and clarifying rights and ensuring a better application of the Regulation. This clarification is needed in light of the many disputes observed between passengers and airlines…the proposal also fine-tunes the existing rights to ensure a more proportionate balance between the interest of passenger and those of the industry”. The specific proposals are listed by Wikipedia in Regulation 261/2004 and include, inter alia, passengers must be notified of flight delays within 30 minutes after the scheduled departure time; extraordinary circumstances will be clarified to include natural disasters or air traffic control shrikes and exclude routine maintenance problems; compensation for long delays with a threshold of 5 hours for type 1 and 2 flights, 9 hours for type 3 flights up to 6,000 km and 12 hours for longer flights; right to refreshments and communication will be applicable after two hours irrespective of the flight length; specific right to refreshments, communications, accommodations and assistance if the delay arises from late arrival of connecting flights; and much, much more.

Conclusion

The EU is on the forefront of efforts to assist and compensate passengers suffering from cancellations and delays and should be emulated by other countries.

The author, Justice Dickerson, has been writing about travel law for 38 years including his annually-updated law books, Travel Law, Law Journal Press (2014), and Litigating International Torts in US Courts, Thomson Reuters WestLaw (2014), and over 300 legal articles many of which are available at www.nycourts.gov/courts/9jd/taxcertatd.shtml .

This article may not be reproduced without the permission of Thomas A. Dickerson.

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