Summary
This paper sets out a position for the proposed review of Regulation 261/2004 on Air Passenger Rights for A4E in its campaign to make air passenger rights clear and simple to implement.
A4E considers the revision of Regulation 261/2004 extremely important in terms of legal certainty and a fair balance of consumer and industry interests and welcomes the EU Council Presidency’s desire to proceed with the file. The current Regulation 261/2004 is too detailed and prescriptive and, at the same time, too vague on essential points. This continues to generate numerous Court rulings across the EU, with judges interpreting the Regulation in various and often extensively different ways.
The recently published Steer study paints a worrying picture of the Regulation’s cost impact on the industryStudy on the current level of protection of air passenger rights in the EU, Final Report, Steer for European Commission, January 2020.: It has increased by 13,6 per cent every year since 2011 to reach a staggering €5.3 billion in 2018 representing €4.4 per passenger which has to be compared to an average profit margin of 4.7€ per passenger. Failing the introduction of a more balanced regime, the profitability and competitiveness of European air carriers will be further affected by the still rising compliance costs, which may ultimately negatively impact their connectivity offer to the detriment of consumers.
Introduction
A4E supports the review of the legislation to make the rules fairer, clearer, and easier to apply. There are positive elements in the European Commission’s proposed revision of the Regulation, including the trigger points for compensation after long delays, a list of extraordinary circumstances, limits on airline liabilities for events outside their control, and the principle of a right of redress.
To guarantee that the passenger enjoys the benefits of air transport, whilst seeing the inconveniences of disruptions minimized, all elements of the aviation ecosystem need to contribute. National authorities and airports should join airlines’ in handling mass disruption and assisting stranded passengers.In case of airline bankruptcy, for example, airlines already offer rescue fares to fly passengers back home. Airports and Member States could exempt these passengers from paying taxes and charges that apply to these tickets.
One should not forget that the main goal of the regulation is a high degree of consumer protection. This high degree of protection is not solely sought in the right to compensation but also through improved service. Attempts to prevent or minimize inconvenience, distortion, or delays, should be incentivized by the legislation. This is what passengers care about first.Special Eurobarometer 485, January 2020. Getting the revision right is therefore very important for airlines and consumers alike. It is also crucial to support the development of a sustainable aviation industry in Europe and promote the connectivity of European airports.
In a spirit of constructive contribution to the much-delayed review of the regulation, focus on the essential points is needed. In order to achieve a better outcome for consumers, certain essential points in the proposal should be retained and some specific provisions should be amended:
The definition and list of extraordinary circumstances
The introduction of an annex clarifying “extraordinary circumstances” is a much-needed improvement. A clear definition and a binding, non-exhaustive list of extraordinary circumstances will lead to greater clarity for all. Such a list must be as comprehensive as possible to ensure that all stakeholders have clarity about what is, and what is not extraordinary, in the widest set of scenarios. The list should include epidemics as well as industrial actions both at the operating air carrier and at any essential service providers such as airports and air navigation service providers (ANSPs), in order not to influence balanced negotiations with trade unions. The list should be non-exhaustive to ensure that NEBs and Courts have the flexibility to add other qualifying events on a case-by-case basis.
A separate, short and precisely defined list of unexpected flight safety shortcomings, in line with common understandings of what constitutes technical defects beyond an airline’s control, is equally important. Such problems are more frequent, and whilst very often they do not mean that an aircraft is unable to fly, stringent safety regulations require any issues to be fixed before take-off.
A4E therefore supports a clear distinction between unexpected flight safety shortcomings and other so-called “force majeure” situations.
Trigger points
Article 1, § 5 amending Article 6, § 2a of Regulation 261/2004
Disruptions to a flight programme take time to recover and many delays are unresolvable within 3 hrs, particularly when disruption occurs out of the air carrier’s base. Where there is a clear connection between the disruption and the delay, air carriers should be afforded the necessary flexibility to recover the programme and operate flights.
A threshold for long delays at 5 hrs, as the Commission proposes, is not an arbitrary number, but essential in incentivizing the airlines to minimise the effect of disruptions to the benefit of passengers, to recover a flight programme amid the numerous operational constraints eg. geographical distances between home bases, airspace capacity, availability of slots and crews, etc.See notably Annex 1 on carriers’ operational constraints in Europe in the context of the trigger points discussion. 9 and 12 hours for mid-haul and long-haul respectively, are equally important.
The priority for stranded passengers is to get to their destination with as little delay as possible.Special Eurobarometer 485, January 2020. Cancellation is the worst option airlines try to avoid. A trigger point lower than 5 hrs is certain to cause more cancellations and generate consumers’ frustration since airlines will be forced to isolate disruption and cancel affected flights in order not to propagate delays to the rest of their programme.
Instead, a threshold of 5 hours would provide airlines with a necessary time margin to manage disruptions properly, take necessary actions to operate all flights and carry passengers to their final destinations. It would uphold this Regulation’s objective of incentivizing the best possible service. This 5-hour threshold would also be in line with the existing right for reimbursement in case of a delay of more than 5 hours.
Knock-on effects/Consequential delays
Article 1, § 4(b) amending Article 5, § 3 and Article 1, § 5 amending Article 6, § 4 of Regulation 261/2004
The provision that extraordinary circumstances can be invoked only for the flight on which the disruption occurred and the flight immediately following it, fails to recognise the realities of scheduled air transport operation, in which necessary reactionary delays can have a much longer‐lasting impact. Again, airlines are practically being forced to cancel flights instead of progressively eliminating a delay.
Should there be a limited period in which extraordinary circumstances and unexpected flight safety shortcomings can be invoked, it should offer airlines sufficient incentive and flexibility to get their schedules back to normal. This means taking account of the fact that disruptions can ripple through a chain of flights.
In this context, the application of extraordinary circumstances should extend to cases where there is a causal link between the original disruption and any other flight that is also affected by delays or cancellations.
Missed connections
Article 1, § 6, introducing Article 6a of Regulation 261/2004
It is crucial that the calculation of delay compensation is done on a flight basis to ensure that feeders are not badly impacted and interlining is preserved. Not only small original carriers would suffer but also large hub carriers with most of their passengers in transit. This would be the opportunity for the EU to show it is serious in promoting connectivity which is central in its communication on European aviation strategy. The delay should therefore be measured at the end of each flight and not at the end of the journey.
This is essential to provide passengers on the same flight with the same rights, preserve the attractiveness of European airports, support the development of co-modality, maintain carriers’ cooperative system of interlining agreements, not imposing a disproportionate burden on a feeder airline, and ensure consistency of regulation with global industry standards which determines the rules of distribution of responsibility between airlines.
Timeframe for rerouting
Article 1, § 8 amending Article 8, § 5 of Regulation 261/2004
A4E supports the right to re-routing in case of cancellation. No right to re-routing should be granted in case of delay. However, the proposed timeframe of 6 hours is too short as it does not give airlines sufficient time to re-route a passenger, particularly for low frequency destinations with few alternative travel options. For flights due to depart in the evening, it may not be possible to process re-routings in the time available. Often there are local environmental restrictions (e.g. airports closing during the night) that complicate such efforts.
The right to re-routing should therefore be 12 hrs effective operating time, excluding night-time operating bans. In addition, there should be a limit on cost or class of service. An extended period of time for remote destinations, such as 24 hours, would ideally be considered.
More equitable burden-sharing / Right of redress
Article 13, § 1 introducing Article 13 of Regulation 261/2004
The Steer study of January 2020Study on the current level of protection of air passenger rights in the EU, Final report Study contract no. MOVE/B5/2018 — 541, p. vi, vii, 38. established that the growing air traffic management disruptions in an unreformed European sky (cancellations grew from 1.0% to 1.7% of flights between 2011 and 2018, and delays grew from 0.9% to 1.4% of flights ) are expected to only further increase in the coming years (cfr NDOP report attached + expected FABEC delays in 2020 and onwards), thereby increasing the number of passengers affected by delays. Such an increase in the cost of care and assistance as well as compensation leaves carriers with no effective means of redress, thereby leaving other actors in the sector not incentivized to improve services to passengers. In this context, a reinforced and easily applicable right to recover costs incurred under this Regulation from third parties should be established.
Claims and complaints
Article 16a, § 6, amending Article 16 of Regulation 261/2004
An unintended consequence of Regulation 261/2004 has been the exponential growth of the EU261 claims industry, in which third parties seek to involve themselves in the EU261 claims process. They damage the relationship between passengers and airlines by representing to passengers that airlines’ claims procedures are onerous and stressful, and the charge for their intervention can reduce the amount of compensation the passenger receives by up to 50%.
A4E proposes that it should be confirmed that the entitlement to claim EU261 compensation is personal to the passenger (or group of passengers) affected and should go to them first. When allowed by Member States laws, passengers should be required to submit claims in the first instance directly to airlines and allow airlines a reasonable timeframe of two monthsAs per the European Commission Interpretative Guidelines on EU261, C(2016) 3502 Final, June 2016 to respond directly to them before engaging third parties. This would not restrict passengers from consulting legal or other third-party advisers.
In addition, A4E strongly supports the dispute resolution mechanisms established in the EU under the ADR Directive and is concerned that the practices of these third parties hinder the spirit of such mechanisms.
Finally, in light of the increasing divergence of rules between member states, a time-limit for bringing legal proceedings for compensation for flight cancellation should be determined by the Regulation at two years to be consistent with the Montreal Convention and avoid confusion for the passengers in the EU.