UK: New Rights for Air Passengers in Europe

Last Updated: 24 March 2004
Article by Fernando Albino and Jeremy Shebson

The European Regulation establishing new common rules on compensation and assistance to air passengers in the event of denied boarding and of cancellation or long delay of flights was finally published on 17 February 2004. Regulation 261/2004 will come into force on 17 February 2005 but, before then, airlines will have to get their procedures up to date and in line with the new obligations set out in the Regulation.

The new regime introduced by Regulation 261/2004 will supersede that which has been in existence since Regulation 295/91. It broadens the scope of the regime, increases the levels of compensation and introduces measures relating to delay and cancellation whereas the old regulation only dealt with denied boarding. It imposes new requirements and sanctions in respect of some matters dealt with by the Warsaw/ Montreal Conventions.

First, the scope of the new Regulation encompasses flights from airports within the European Union whether or not the carrier is an air carrier with a valid operating licence granted by an EU Member State. For Community Carriers the rules extend to flights they perform into the EU. Another important change is that non-scheduled flights are now covered even if included in a package tour. The preamble to the new Regulation records that the previous set of rules was insufficient to deter the generalised practice of denied boarding and it therefore increases the amounts of compensation to be paid. It also addresses a commonly identified inconsistency within the previous regime whereby compensation was payable on the denied boarding of a single passenger but not on the cancellation of an entire flight. Therefore, compensation will now also be due for the cancellation of flights where no sufficient notice or timely warning is given to the passengers.

The compensation amounts are now set at: EUR 250 for all flights under 1,500 kilometres; EUR 400 for all other intra-Community flights over 1,500 kilometres and extra-Community flights between 1,500 kilometres and 3,500 kilometres; and, EUR 600 for the remaining flights over 3,500 kilometres. The compensation figures under Regulation 295/91 (only) for denied boarding were EUR 150 for flights up to 3,500 kilometres and EUR 300 for flights in excess of that – the increase is therefore significant. There is also a mechanism for reviewing the limits of compensation further to a report to be conducted by the Commission by 1 January 2007 on the operation and results of the Regulation.

Passengers affected by cancellations or involuntary denied boarding are also entitled to reimbursement of the full cost of the ticket or a return flight to the first point of departure at the earliest opportunity. Alternatively they can also opt for re-routing to the final destination at the earliest opportunity or at a later date more convenient for the passenger. Affected passengers are always entitled to meals and refreshments, two telephone calls or e-mails and, where necessary, hotel accommodation.

The Regulation provides a definition of delay. For flights under 1,500 kilometres there is a delay if the flight leaves two hours or more after the scheduled time of departure. The amount of time required is three hours or more for all other intra-Community flights and other flights between 1,500 and 3,500 kilometres and 4 hours for all other flights over 3,500 kilometres. In these cases the passenger is entitled to receive meals and refreshments, two telephone calls or e-mails (as for denied boarding or cancellations) and, where the delay is five hours or more, the passenger can opt for a reimbursement or a return flight to the point of destination.

There is an additional obligation on air carriers to inform the passengers at the check-in desks in "a clearly legible notice" of their rights in the event of denied boarding, cancellation or delay of at least two hours. The airline must also provide to each affected passenger a written notice setting out the rules for compensation and assistance and the contact details of the entity responsible in the relevant Member State for enforcement of the Regulation. The domestic implementation in each Member State will also involve setting out sanctions which, in the words of the Regulation itself, will have to be "effective, proportionate and dissuasive".

The carriers will not have to pay compensation to passengers in the event of cancellation of flights when the cancellation resulted from "extraordinary circumstances" such as those arising out of political instability, meteorological conditions or strikes AND provided the carrier took all reasonable measures to avoid the cancellation. Despite some references to delays in its preamble and some of its previous drafts, the Regulation appears to have denied carriers the same defence in respect of the obligations arising out of delayed flights. There is therefore a mismatch with the Warsaw Convention/ Montreal Convention rules where there may be such defences in respect of delay.

A lot of these rules will not significantly alter the normal practice of so called network carriers who already provide a relatively similar standard of care to their customers as that now made mandatory by the Regulation. However, the increase in compensation levels is dramatic as is the obligation in some circumstances to provide reimbursement of the full cost of the ticket (not just of the sector delayed or cancelled). The Regulation has been the target of fierce criticism by some low cost airlines with one representative of that industry having described it as "total insanity". These carriers would much prefer a US type system where compensation is primarily based on the price of the ticket. Under the new Regulation, the passenger may be entitled to compensation which significantly exceeds the fare paid and to services, such as meals, that he/she would not expect to receive on the actual flight.

Air carriers and their insurers should be clear as to whether or not any compensation payable under the Regulations is to be insured. AVN6O has given restricted cover for some inadvertent ‘withholding of transportation’.

With just under one year to go before the Regulation comes into force, it is clear its introduction is not going to be without controversy.


The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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