Airlines warn of chaos over customer compensation law

By Anna McLauchlin

Date: 10/02/05

EU airlines have warned of chaos in airports from next week as a new EU law giving air passengers up to €600 compensation if they are denied boarding comes into force. They are hoping that the European Court of Justice (ECJ) will annul the legislation.

On Thursday (17 February) the European Commission will launch a media campaign celebrating passenger rights and the implementation of the new rules on compensation for cancelled or delayed flights.

Transport Commissioner Jacques Barrot will travel to the Charles de Gaulle airport in Paris and Margot Wallström, the communications commissioner will be at Arlanda airport in Stockholm to start handing out 500,000 leaflets informing passengers of their new rights.

Under the new regulation airlines will have to pay compensation if they have overbooked a flight and had to deny passengers boarding. They will also have to provide certain assistance - such as hotel accommodation and meals - in the case of a delay for any reason and reimburse the cost of certain flights if the delay is longer than five hours.

The International Air Carrier Association (IACA) claims that the information contained in the leaflets will mislead passengers into thinking that they are entitled to compensation when that may not be the case.

"There are certain cases where the airline will not pay," said IACA's director-general, Sylviane Lust. "The legislation is drafted in such a way that it is not clear what are the entitlements."

She warned that airlines would be willing to take individual matters to court.

There is also a case pending at the ECJ that could scupper the Commission's plans. According to the International Air Transport Association (IATA), supported by the European Low Fares Airlines Association, the new law conflicts with the Montreal Convention on air transport, to which member states are party.

Under that convention, airlines cannot be held liable for situations beyond their control such as bad weather or air traffic control delays -force majeure in legal language. Under the EU law airlines would have to pay up for delays even in the case of force majeure.

In July last year a British court found in favour of IATA's case and in August agreed to refer the matter to the ECJ. The court, which has the power to annul the legislation either in part or in full, has not yet set a date for the hearing.

But European consumer association BEUC said that the EU law did not go far enough. "We were actually calling for passengers to be re-routed or reimbursed after a two-hour delay so this was not enough for us," said BEUC's Nuria Rodríguez.

Article reports on the introduction of new rules on compensation for cancelled or delayed flights in the European Union. Under the new regulation adopted by the Council on 26 January 2004 and coming into force on 16 February 2005 airlines must pay compensation if they overbook a flight and have to deny passengers boarding. They also have to provide certain assistance - such as hotel accommodation and meals - in the case of a delay for any reason and reimburse the cost of certain flights if the delay is longer than five hours. EU airlines have warned of chaos in airports with the introduction of the new rules. They are hoping that the European Court of Justice (ECJ) will annul the legislation.