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A4E’s Position on Collective Redress Applied to Air Transport

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Summary

This paper sets A4E’s position concerning the Proposed Directive on representative actions for the protection of the collective interests of consumers,COM(2018) 18 final — Proposal for a Directive of the European Parliament and of the Council on representative actions for the protection of the collective interests of consumers, and repealing Directive 2009/22/EC and in particular on air transport legislations under the scope of this proposal.

A4E believes that the entire Proposed Directive is detrimental for both the industry and consumers. It does not contain sufficient safeguards and resembles partly the current legal system in the United States, which the European Commission once described as “a toxic cocktail”.MEMO/08/741 — Green Paper on Consumer Collective Redress — Questions and Answers In particular for the airline industry, the inclusion of aviation-related legislation in this proposal is unwelcome.

While A4E recognizes the importance of high level of consumer protection, A4E is particularly concerned about the inclusion of air passenger rights in the scope of the Proposed Directive and in particular the Regulation (EC) No 261/2004 on Air Passenger Rights (hereafter “EU261”), Regulation (EC) 1107/2006 Rights of Disabled Persons and Persons with Reduced Mobility when Travelling by Air and Regulation (EC) 1008/2008 on Common Rules for the Operation of Air Services.

Air transport already has an extensive set of regulatory tools on air passenger rights. Adding another track for claims would confuse passengers. The Proposed Directive is demonstrably flawed and is certain to be abused by claims management companies (CMCs) for private profit, particularly in relation to EU261. By creating legal confusion it also fails to strengthen consumer protection principles and mechanisms in the EU area. The European Convention on Human Rights and the Treaty of the EU respectively require that EU law be certain and proportionate, the Proposed Directive is neither as far as air transport legislation is concerned.

Introduction

Every year, A4E airlines transport 550 million passengers throughout Europe, bringing people closer together and supporting their economic activities in a quick and efficient manner. By facilitating the movement of goods and people across borders, A4E airlines are contributing to the development of social and economic networks which no other form of transport can provide. While continuing to improve the unprecedented freedom of mobility aviation offers, we never compromise on safety and strive to make air transport reliable and accessible. This is what A4E airlines stand for.

We care for our customers, not because regulations tell us to do so, but because the customer is at the core of everything we do. Regardless of the cause of flight disruptions, even when it is caused by external factors beyond our control, we provide information, care and assistance as required, and always do our best to minimise the impacts and length of that disruption.

We provide services to all consumers in an equal manner and we work to accommodate their diverse needs. A4E airlines pay particular attention to the needs of persons with special needs and any persons accompanying them, including the needs of unaccompanied minor children.

A necessary exclusion of air transport from the scope of the Injunctions Directive

A4E is concerned by the inclusion of air passengers rights to the scope of the Proposed Directive and believes that air transport should be excluded from its scope.

Air transport already has an extensive set of regulatory tools on air passenger rights. The regulations in place define the rights of passengers travelling by air in all kinds of operational disruptions and EU261 in particular establishes a claim-based system so that each passenger can claim his pre-defined rights and levels of compensation to an airline first and to the National Enforcement Body or an Alternative and Online Dispute Resolution Mechanism in a second instance. These systems are free of charge for the consumers and the full procedure under EU261 must be exhausted. Adding another track for claims would confuse passengers.

Air carriers operating in the EU are already absorbing the business risks of cancellations and delays. In the air transport sector, virtually all factors contributing to delays and cancellations are external to an airline’s day-to-day operations. This is not the case for the main events which have triggered the drafting of this Directive, such as the Dieselgate or the recent Facebook data breach, where the undertaken actions were deliberate.

EU261 is not intended for collective redress claims. Indeed, passengers on a same flight will not necessarily enjoy the same level of compensation.For instance, a passenger on a direct flight from A to B has no right to compensation if the delay of that flight is less than 3 hours. However, if that flight only has a delay of 1 hour that causes a passenger travelling from A to C via B to miss his connection and arrive with a delay of more than 3 hours in C that passenger will receive a compensation. Moreover, EU261 gives the possibility to carriers to offer the option to passenger of re-routing or alternative travel arrangements in case of delays or cancellations. Further, the European Commission has confirmed that compensation under EU261 must first be claimed by the passenger before it is payable. A collective redress system applied to EU261 would not be compatible with this disparity of individual cases.

We encourage passengers to claim from airlines directly to ensure they receive 100% of their entitlements. In order to maintain good relations with our passengers and to protect them from the abusive practices of CMCs we provide passengers with simple, efficient and free means to directly claim their reimbursement/compensation for delays or cancellations. There exists absolutely no obstacle for a passenger to claim entitlements under EU261. In addition, should a passenger disagree with an airline’s decision in relation to EU261, we also provide passengers with options for Alternative Dispute Resolution (ADR) schemes.

EU261 is currently being revised by the European Institutions. The outcome of this legislative process is still unclear, and so is the impact upon the industry and consumers. Moreover, an impact assessment of the inclusion of EU261 in the Proposed Directive is lacking. The proposal is thereby built upon an unclear outcome of a current legislative process. This means even more uncertainty for industry and consumers, which is not in line with sound legislation-making.

A4E strongly believes that in Europe, collective redress mechanisms led by qualified entities “QEs” will benefit only a growing industry of unregulated CMCs. The problematic drafting of EU261 has resulted in more CJEU decisions than any other regulation. It has led to a proliferation of unscrupulous CMCs who employ aggressive marketing techniques, often act contrary to passengers’ best interests and damage the relationship between passengers and airlines. CMCs in many jurisdictions already operate under the guise of “not-for-profit” organisations designed to help them mislead consumers and generate profits for their Claims Chaser business. The Proposed Directive would enable CMCs to mislead consumers and deduct from their entitlements on a mass scale without the consumer having given any consent whatsoever to the CMC.

The Proposed Directive will lead to abusive litigation, contrary to its expressed objective. Individual mandates from consumers are not obligatory (art. 5(2)) — the consumers in question will not be able to scrutinise the share which funders, QEs and CMCs will take from any compensation paid by an airline. In addition, consumers may be prohibited from claiming from an airline, including via ADR or the European Small Claims Court procedure, where they have already been included, without their consent, in collective redress proceedings by a QE. In addition, consumers will have no right of redress against QEs where they have failed to act in consumers’ best interests.

For all the reasons set above, A4E believes that air transport should be excluded from the scope of the Proposed Directive

About A4E

Launched in 2016, Airlines for Europe (A4E) is Europe’s largest airline association, based in Brussels. The organisation advocates on behalf of its members to help shape EU aviation policy to the benefit of consumers, ensuring a continued safe and competitive air transport market. With more than 720 million passengers carried each year, A4E members account for more than 70 per cent of the continent’s journeys, operating more than 3,000 aircraft and generating more than EUR 130 billion in annual turnover. Members with air cargo and mail activities transport more than 5 million tons of goods each year to more than 360 destinations either by freighters or passenger aircraft. Current members include Aegean, airBaltic, Air France-KLM Group, Cargolux, easyJet, Finnair, Icelandair, International Airlines Group (IAG), Jet2.com, Lufthansa Group, Norwegian, Ryanair Holdings, Smartwings, TAP Air Portugal, TUI and Volotea. In 2019, A4E was named “Airline & Aviation Business Development Organisation of the Year” by International Transport News. Follow us on Twitter @A4Europe.