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The EU Regulation 261/2004 is quiet detailed but essentially covers what rights passengers have should an aircraft be delayed or if you are denied boarding or if it is cancelled. If any of these happen you could be entitled to compensation.


The EU Regulation 261/2004

EU Regulation 261/2004 of the European Parliament and of the European Council of 11 February 2004 established common rules on compensation and assistance to passengers in the event of

  • denied boarding,
  • cancellation
  • long delay of flights

It repealed Regulation (EEC) No 295/91, and went into effect on 18 February 2005. It sets out the entitlements of air passengers when a flight that they intend to travel on is delayed or cancelled, or when they are denied boarding to such a flight due to overbooking, or when the airline is unable to accommodate them in the class they had booked.

Applicability

The regulation applies to any passenger:

  • departing from OR arriving at an airport located in the territory of a Member State to which the Treaty applies;

The protection accorded to passengers departing from OR to an airport located in a Member State should be extended to those leaving an airport located in a third country for one situated in a Member State, when a Community carrier operates the flight and where a community carrier is defined as any carrier licensed to operate within that community. (E.g. List of UK carriers.)

  • departing from an EU member state, or
  • travelling to an EU member state on an airline based in an EU member state

if that person has:

  • a confirmed reservation on the flight, and
  • arrived in time for check-in as indicated on the ticket or communication from the airline, or, if no time is so indicated, no less than 45 minutes prior to the scheduled departure time of the flight

or

  • have been transferred from the flight for which he/she held a reservation to some other flight

unless

  • the passenger is travelling on a free or discounted ticket not available to the general public, other than a ticket obtained from a frequent flyer programme.

It does not apply to helicopter flights, to any flight not operated by a fixed-wing aircraft.

Denied boarding

Before denying passengers boarding involuntarily, the airline is required to first seek volunteers to give up their reservation in return for whatever benefit is negotiated between the airline and the volunteers. Irrespective of such negotiation, such volunteers are also entitled to reimbursement or rerouting as described below.

If insufficient volunteers are obtained, the airline may then proceed to involuntarily deny passengers the right to board their flight. All passengers so denied must be offered all three types of compensation and assistance described below.

Cancellation

If a flight is cancelled, passengers are automatically entitled to their choice of (a.) re-routing to the same destination at the earliest opportunity (under comparable conditions); (b.) later rerouting, at the passenger’s convenience, to the same destination under comparable conditions (subject to seat availability); or (c.) a refund of the ticket as well as a return flight to the point of first departure, when relevant. Any ticket refund is the price paid for the flight(s) not used, plus the cost of flights already flown in cases where the cancellation has made those flights of no purpose. Where applicable, passengers are also entitled to refreshments, communication and accommodation as described below. Where re-routing is to another airport serving the same destination, the airline must pay for onward transport to the original airport or to a close-by destination agreed with the passenger. These choices, and the entitlement to refreshments, etc., apply to all cancellations, regardless of whether the circumstances are extraordinary or not.

The airline is also required to pay cash compensation as described below, unless one of the following conditions applies:

  • the airline notifies the passengers at least two weeks prior to departure
  • the airline notifies the passengers between one and two weeks prior to departure, and re-routes passengers so that they can:
    • depart no more than two hours earlier than scheduled, and
    • arrive no more than four hours later than scheduled
  • the airline notifies the passengers less than one week prior to departure, and re-routes passengers so that they can:
    • depart no more than one hour earlier than scheduled, and
    • arrive no more than two hours later than scheduled
  • the cancellation was caused by extraordinary circumstances that could not have been avoided by any reasonable measure.

The airline must also provide an explanation to passengers of alternative transport.

Delays

If an airline expects a flight to be delayed, passengers are entitled to refreshments and communication if the expected delay is more than:

  • two hours, in the case of a type 1 flight
  • three hours, in the case of a type 2 flight
  • four hours, in the case of a type 3 flight

Flight types are as follows:

  • Type 1 Flight – A flight of less than 1500 km in distance
  • Type 2 Flight – A flight within the EU of greater than 1500 km in distance, or any other flight of greater than 1500 km but less than 3500 km in distance
  • Type 3 Flight – A flight not within EU of greater than 3500 km in distance

with the great circle method being used to determine distance.

Additionally, if the flight is expected to depart on the day after the original scheduled departure time, passengers are entitled to accommodation.

If a flight is delayed by five hours, passengers are additionally entitled to abandon their journey and receive a refund for all unused tickets, a refund on tickets used already if the flight no longer serves any purpose in relation to their original travel plan, and, if relevant, a flight back to their original point of departure at the earliest opportunity.

Compensation and assistance

There are three broad categories of compensation and assistance that may be required in the case of cancellations, delays, or denied boarding.

Cash compensation

Cash compensation is a payment of:

  1. €250, for a flight of less than 1500 km
  2. €400, for flight within the EU of greater than 1500 km in distance, or any other flight of greater than 1500 km but less than 3500 km in distance
  3. €600, for a flight not within EU of greater than 3500 km in distance where flight types are as defined above. Where rerouting is offered and results in the passenger arriving within two/three/four hours of the scheduled arrival time for a type 1/2/3 flight, the compensation payable is halved.

This payment is strictly a compensation for the customer’s inconvenience and does not replace or form a part of either of the following two compensation categories.

Although the wording of the regulation indicates that this payment is not relevant in the case of delays, the judgment of the European Court of Justice in joined cases C‑402/07 and C‑432/07, dated 19 November 2009, suggests that the regulation must be interpreted as meaning that passengers whose flights are delayed may be treated, for the purposes of the application of the right to compensation, as passengers whose flights are cancelled and they may thus rely on the right to compensation laid down in Article 7 of the regulation where they suffer, on account of a flight delay, a loss of time equal to or in excess of three hours, that is, where they reach their final destination three hours or more after the arrival time originally scheduled by the air carrier.

The Airline is not obliged to provide Cash compensation in the case of “Extraordinary Circumstances” (Defined earlier in the document), according to Article 5, Paragraph 3.

Rerouting or refunding

Rerouting or refunding is, at the passenger’s choice, one of the following three compensations:

  1. Repayment of the cost of unused flight tickets, and for used tickets where the flight(s) taken no longer serve(s) any purpose in relation to the passenger’s original travel plan, and where applicable, a flight back to the original point of departure at the earliest opportunity
  2. Rerouting under similar conditions to the intended final destination at the earliest opportunity
  3. Rerouting under similar conditions to the intended final destination at the passenger’s leisure, subject to the availability of seats.

If a passenger’s destination is an airport at a city with multiple airports and rerouting results in the passenger being taken to another of those airports, the airline must also pay for transport for the passenger to the original intended airport or an agreed nearby destination.

Refreshments, communication and accommodation

When passengers become entitled to these assistances, they must be offered, free of charge,

  • Meals and refreshments in proportion to the waiting time
  • Two telephone calls, fax or telex messages, or emails
  • Hotel accommodation and transport between the airport and the hotel, if a stay of one or more nights, or a stay additional to that intended by the passenger becomes necessary

In the case of a delay, the airline may withdraw or abrogate these entitlements if offering them would delay the flight further.

Upgrades and downgrades

If a passenger is placed in a higher class than that for which a ticket was purchased, the airline may not request any additional payment.

If a passenger is placed in a lower class than that for which a ticket was purchased, the airline must refund 30/50/75% of the cost of the ticket for type 1/2/3 flights. For the purpose of this condition, flights to the French overseas departments are not considered to be within the European Union.

Method of refund

Refunds payable under this regulation may be paid in cash, by electronic bank transfer, bank draft, or cheque. With the signed agreement of a passenger, they may also be paid in travel vouchers or other services.

Obligation to notify passengers

Airlines are obliged to display a notice at their check-in counters stating:

If you are denied boarding or if your flight is cancelled or delayed for at least two hours, ask at the check-in counter or boarding gate for the text stating your rights, particularly with regard to compensation and assistance.

Additionally, when an airline cancels a flight, denies a person boarding, or incurs a delay exceeding two hours to a flight, it is obliged to provide each passenger affected with a written notice setting out their rights under the regulation, and the contact details of the national body tasked with enforcing the regulation.

Court cases regarding Regulation 261/2004

In the case Wallentin-Hermann v Alitalia—Linee Aeree Italiane SpA (Case C-549/07) of 22 December 2008, the European Court of Justice in Luxembourg ruled on the interpretation of Article 5 of the regulation relating to cancellations, specifically paragraph 3 which states:

An operating air carrier shall not be obliged to pay compensation in accordance with Article 7, if it can prove that the cancellation is caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken.

The Court agreed with Wallentin-Hermann that any technical issues during aircraft maintenance don’t constitute “extraordinary circumstances” that would allow airlines to avoid paying passengers compensation for canceled flights. This case therefore closed the loophole of always abused frivolous interpretations used by the airlines of “technical or extraordinary circumstances“, when further defined and limited the use of such defense. The definition of “technical and/or extraordinary circumstances“ by the Court now stands firm and solid: any carrier must prove that the alleged mechanical problem leading to the cancellation was “beyond its actual control, the court affirmed in a statement. In its judgment, the Fourth Chamber of the Court of Justice held:

“Extraordinary circumstances” was not defined in the 2004 Regulation, but the phrase was to be interpreted narrowly since article 5(3) constituted a derogation from the principle, indicated in recitals 1 and 2 of the preamble, of protection of consumers, in as much as cancellation of flights caused serious inconvenience to passengers.

Furthermore, in the joined cases of Sturgeon v Condor, and Bock v Air France (C-402/07 and C-432/07), the Fourth Chamber of the European Court of Justice held on 19 November 2009 that despite no express provision in the Regulation to compensate passengers for delay, passengers are now entitled to the compensation as set out in Article 8 for any delay in excess of three hours providing the air carrier cannot raise a defence of “extraordinary circumstances”.

“Articles 5, 6 and 7 of Regulation EC 261/2004 must be interpreted as meaning that passengers whose flights are delayed may be treated, for the purposes of the application of the right to compensation, as passengers whose flights are cancelled and they may thus rely on the right to compensation laid down in Article 7 of the regulation where they suffer, on account of a flight delay, a loss of time equal to or in excess of three hours, that is, where they reach their final destination three hours or more after the arrival time originally scheduled by the air carrier.” (judgment of the Court C-402/07 and C-432/07)

The fourth Chamber also ruled that under the definition of “extraordinary circumstances”, technical faults within an aircraft should not included and therefore an air carrier cannot rely on a technical fault within an aircraft as a defence from a vaild claim under the Regulation.(Para. 70, Judgment of the Court, C-402/07 and C-432/07) Various passenger rights groups have reported the claim and seek for passengers to bring claims against airlines in the event of delay in excess of three hours.

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