Airlines push for rethink on over-booking compensation

Date: 14/02/02

By Laurence Frost

SMALLER regional airlines are warning they could be bankrupted by proposals to increase compensation to passengers who are turned away from full flights.

The industry is calling on EU governments to tone down the plans as they begin discussing them this week.

'We believe the Council [of Ministers] will tame this proposal,' said Andrew Clarke of the European Regions Airlines Association (ERA).

Transport Commissioner Loyola de Palacio's plan would increase compensation to €750 for short-haul passengers delayed by over two hours. Under current rules, payouts are limited to original ticket prices, averaging 160 euro.

The commissioner is keen to target airlines that deliberately overbook flights to anticipate last-minute cancellations by business passengers with flexible tickets. But regional airlines say many 'denied boardings' are beyond their control.

'We face operational restrictions in bad weather which reduce the number of seats available,' said Clarke.

Smaller planes need lighter loads to take off safely in bad conditions and carriers in mountainous regions would be worst affected.

Simulations by one transalpine operator suggest the measures would cost it €1 million of its €100 million turnover - a significant impact in a sector where profits are typically not much above 2.

But there are already signs that there are reservations about the plans among some governments, whose representatives begin discussing them tomorrow (15 February). Some are understood to be keen on the US regime, under which the airline agrees compensation with passengers volunteering to give up their seats.

Smaller regional airlines are warning they could be bankrupted by proposals to increase compensation to passengers who are turned away from full flights.