Introduction
The news last month that volcanic ash from Iceland was disrupting air travel brings back memories of the eruption of the Icelandic Volcano, Eyjafjallajokul, a year ago, which led to worldwide chaos. Service at many airports across the globe ground to a halt and many passengers were left stranded in foreign countries, while others were unable to set off on planned trips. Passengers looked to airlines and tour operations for reimbursement of their expenses and the purpose of this article is to consider whether airlines and tour operators have an obligation to compensate their passengers and, if so, the extent of that obligation.
The obligations on airlines are distinct from those on tour operators and the legal position will differ depending on whether the cancelled flight was outbound or inbound and the country from which it departed.
Airlines - Outbound:
The rules which govern outbound flights are set out in the Denied Boarding Compensation Regulation 2005 (Regulation (EC) No 261/2004 of the European Parliament). This Regulation applies to all flights which depart from an airport situated within an EU Member State and Article 5 states that an air carrier should provide assistance in the event of delay or cancellation. This obligation is, however, qualified by Article 5.3 which clearly stipulates that 'compensation' will not be payable in extraordinary circumstances. The burden of proof is on the air carrier to show that the circumstances were extraordinary.
In an English decision issued in December last year, the Court held that a family seeking compensation from a Spanish airline after their flight from Madrid to London was cancelled because of the ash cloud was not entitled to compensation under the Regulation. The Court was satisfied that the flight had been cancelled because of the flight restrictions caused by volcanic ash and, as a result, the cancellation was due to circumstances outside airline's responsibility or control in which it was impossible to operate the flight. The airline had proved that the circumstances represented meteorological conditions incompatible with the operation of the flight and unavoidable extraordinary circumstances. This meant that, under Article 5.3 of the Regulation, the airline did not have to pay compensation for cancellation.
Airlines – Inbound:
Again, the governing Regulation is the Denied Boarding Regulation 2005. For inbound journeys, the Regulation applies to Community Carriers (Air Carriers based in the EU) and all flights which depart from an EU Member State. In the case of inbound flights the passenger has rights under Articles 8 and 9 of the Regulation. Article 8 entitles the passenger to be reimbursed or re-routed if his flight is cancelled or delayed. The passenger is entitled to be reimbursed if he has an alternate way home or is entitled to an alternate flight if he has no other way back.
In terms of Article 9, the airline is responsible for passengers stranded abroad and should provide the following:
- Meals and refreshments in a reasonable relation to the waiting time;
- Hotel accommodation in cases where a stay of one or more nights becomes necessary, or where a stay beyond the passenger's intended stay becomes necessary; and
- Transport between the airport and the place of accommodation.
The terms of the Article are clear and even if the ticket was purchased at a low cost, the traveller is still entitled to this protection.
Airlines – Inbound – Non-EU Countries/Non-EU Carriers:
The Montreal Convention is an international Convention which imposes obligations and liabilities on international carriers. Unfortunately, under the terms of this Convention, the carrier will not be liable for delay if it can be shown that it took all steps necessary to avoid the delay or, alternatively, it was impossible to avoid the delay. The Convention does not therefore provide any protection to a consumer in the current circumstances.
It is sometimes the case, however, that the airline's duties are set out in the contract between the traveller and the airline and so in cases involving Non-EU carriers and Non-EU countries, it is a good idea to check the terms of the contract as there may be a provision under which compensation can be claimed.
Package Deals – Before Departure:
Regulation 12 of the Package Travel, Package Holidays and Package Tours Regulations 1992 implies terms into every package contract. In terms of Regulation 12, where the organiser significantly alters an essential term of the contract before departure, he must notify the consumer as quickly as possible in order to enable him to take appropriate decisions. In particular, the consumer has the option of withdrawing from the contract without penalty or accepting a rider to the contract specifying the alterations to be made and their impact on the price.
If the consumer decides to withdraw or if the organiser cancels the package, the consumer is entitled to one of the following three remedies:
- to be supplied with a package of equivalent or superior quality if the other party is able to offer such a substitute;
- to be supplied with a package of lower quality if the other party is able to offer this, together with repayment of the price difference between the new and the original package; or
- to be reimbursed all payments made under the contract.
Unfortunately, the consumer is not entitled to compensation if the package is cancelled for reasons of unusual delay.
Package Deals - After Departure:
It is not clear whether the package provider has a duty to make
suitable arrangements to continue the package if flights are
delayed or cancelled. Regulation 14 of the Package Travel, etc
Regulations 1992 states that, where a significant proportion of the
services contracted for is not provided, where appropriate, the
package provider will provide suitable alternative arrangements or,
if this is not possible, where appropriate, will provide the
consumer with equivalent transport back to the place of departure
or another destination agreed with the consumer.
The extent of the package provider's liability in this
situation is unclear. If the full duration of the stay has expired,
there is scope for the provider to argue that the only thing they
have still to provide is the flight home. Under this argument, the
provider would only be obliged to provide alternative travel and
would not be liable to provide accommodation or compensation for
the extended stay. On the other hand, the consumer may argue that
the provider has an obligation to make suitable arrangements for
the continuation of the package. It is not yet clear which argument
the courts are likely to favour in relation to flights delayed or
cancelled as a result of volcanic ash.
In addition, the obligation to provide compensation to the consumer is limited by the use of the words "where appropriate", which leave scope for each case to be argued on its merits.
Conclusion
It is hoped that the current disruption caused by volcanic ash will not be as severe as the problems faced last year. Hopefully, the airlines will have learnt from last year's experience and will be in a better position to deal with the issues caused by volcanic ash. It has been suggested, however, that we are entering a period during which there is likely to be more volcanic activity and, if that is the case, those travelling by air may well face further disruption in the years ahead.
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.
