Airlines Pressure EU to Reduce Delay Compensation

Airlines Pressure EU to Reduce Delay Compensation


Airlines are Pressuring the EU to Reduce EC 261/2004 Compensation, in light of the financial toll the pandemic and summer travel chaos have taken. Current EC 261/2004 compensation for cancelled flights and flight delays that result in arriving 3 or more hours later than scheduled is:

  1. Flight of <1500 km: 250 EUR
  2. Flight within the EU >1500 km; OR any flight >1500 km but <3500 km: 400 EUR
  3. Flight not within the EU >3500 km: 600 EUR

The current Czech EU presidency, which is from July 1-December 31, 2022, wants to reopen the discussions around revising the EU compensation amounts, a discussion that has been stymied for years over a dispute between the UK and Spain over Gibraltar's airport.

Previously, in 2013, revisions were proposed that would have more clearly defined exceptional circumstances (under which airlines are not obligated to provide compensation) and would have increased the time threshold required to claim compensation for flights of <3500 km to 5 hours, to 9 hours for flights >3500 km. but <6000 km., and to 12 hours for flights >6000 km.

Airlines have in particular taken issue with what they consider disproportionate compensation amounts for cheaper intra-Europe tickets. Managing Direction of the Airlines for Europe industry lobby, Thomas Reynaert, argues “…if you pay EUR 50 for the ticket, then you get €300 back, that’s not right.”

Neither we nor most of our clients would agree with him, since his assertion dismisses the value of passengers' time when flights are cancelled or delayed. Whether meetings have to be rescheduled or canceled, a special occasion missed, additional time off requested, childcare extended, etc. these delays and cancellations cause far more cost and inconvenience than the ticket cost, and the only way for airline incentives to be appropriately aligned so as to better (if not appropriately) value their passengers' time is to have compensation amounts that aggregate to a significant enough sum. Otherwise, if compensation amounts can never be higher than ticket costs, for flights that through competition or flight sales have lower cost tickets, airlines will be more inclined to cancel them and greatly inconvenience passengers, viewing the lower compensation amounts as a cost of doing business.

Further, even when flights are cancelled or their arrival is delayed over 3 hours, most European airlines make zero mention of the EC 261/2004 compensation that passengers can claim, so many passengers fail to submit a request for compensation, let alone receive the compensation they're entitled to. This is also why there are so many companies vying to file claims on passengers' behalf, then taking a 25% cut of the refund. It's the airlines themselves that created the market for these claims agencies, according to Patrick Gibbels, who heads a Brussels-based consultancy that lobbies on behalf of claims agencies who take airlines to court over passenger rights issues. “[Airlines] make it very opaque and difficult” for consumers to obtain compensation.

EU policymakers are also treading gingerly. Many are sympathetic to the airlines' concerns, but are concerned with the optics of rolling back passenger rights, particularly after the protracted wait so many passengers experienced with trying to get cash refunds for flights cancelled due to the pandemic (see Dear European Airlines: Stop Refusing EC 261/2004 Flight Refunds and European Airlines to Refund COVID-19 Cancelled Flights and Unwanted Vouchers).

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Source: Politico

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