Prelimenary ruling on 19th Nov.09 by the European Court of Justice (ECJ) that widened the scope of the Denied Boarding Regulation 261/2004 (“the Regulation”) on the liability of airlines to pay compensation to passengers. The ECJ ruled that passengers on flights whose arrival at their final destination is delayed by three hours or more are entitled to statutory compensation, despite this not being provided for in the Regulation. The ruling has taken the whole industry by surprise and airlines are only beginning to comprehend its severity, and the financial implications of the decision for the industry are insurmountable.
On 14 Dec.09 IATA made the following statement:
- It is in everybody's interest to operate on schedule
- Delays and cancellations are inconvenient for passengers and costly for airlines
- The opinion makes delays eligible for financial compensation
- This could add up to EUR 5 billion to industry costs annually
- For example, a three hour delay of an Airbus A319 could require compensation of up to EUR40,000
- It is an incentive that cannot deliver value
- Delays are often beyond the control of airline (weather, mechanical, air traffic congestion/strikes etc).
- Airlines will likely have to pass some additional cost to the passenger
- Operational delays and cancellations are a customer service issue
- In a competitive industry market discipline is a more effective tool than badly drafted, confusing and complex legislation
- The ECJ opinion is making this poorly drafted complex consumer protection legislation even worse
On 8 Dec.09 C.E.O.s of leading airlines and of the Board of Airline Representatives in the UK wrote a letter ....read more>> to the UK Secretary of State of Transport calling for immediate action and to rectify the situation, and therefor seeking UK Government support to achieve this objective.
BARIN fully supports this call and similarly asked for support from the Dutch Minister of Transport.