The European Commission updates its guidelines on compensation for aggrieved passengers due to delays, denial of boarding or cancellations

The European Commission has recently adopted updated interpretative guidelines on  Regulation (EC) No 261/2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights.

Regulation (EC) No 261/2004 of the European Parliament and of the Council entered into force on 17 February 2005. The Regulation sets a minimum level of quality standards for passenger protection, adding an important consumer dimension to the liberalisation of the aviation market.

In 2016, the Commission adopted first interpretative guidelines on Regulation (EC) No 261/2004 and on Council Regulation (EC) No 2027/97 of 9 October 1997 on air carrier liability in the event of accidents.

The new guidelines detail further the rights of passengers who have been caused harm.

Firstly, the interpretative guidelines clarify the scope of Regulation (EC) No 261/2004. Both the material scope as well as the geographical scope are covered by the guidelines. Following European jurisprudence, the guidelines confirm that a flight originating and ending outside the European Union with a layover in the European Union is not covered by Regulation (EC) No 261/2004. Concerning the material scope of Regulation (EC) No 261/2004, the guidelines consolidate the latest case law, particularly concerning the requirement for passengers to check in to be eligible for compensation for a delayed flight. Another interesting point clarified by the guidelines is that the responsibility for compensation lies with the operating air carriers and not necessarily the air carriers that sold the ticket.

Secondly, the guidelines set out the events that give rights under Regulation (EC) No 261/2004. Four scenarios are listed:

• Denied boarding;
• Cancellation;
• Delay;
• Upgrading or downgrading.

The novelties concern diverted flights. The guidelines stipulate that flights diverted to an airport that is not the original airport must be classified as cancelled flights. An exception is made if the final destination airport serves the same town, city or region, in which case the flight is classified as delayed.

The guidelines also clarify the distinction between a delayed flight and a cancelled flight. Indeed, an airline could indefinitely delay a flight instead of cancelling it. Therefore, the guidelines refer to recent case law about the timeframe for a cancellation. Flights that have been delayed by more than three hours are considered cancelled. Flights that have been brought forward by more than one hour are also considered cancelled.

Thirdly, the guidelines set out all the rights of aggrieved passengers. Again, four rights are presented:

• Right to information;
• Right to reimbursement, re-routing or rebooking;
• Right to care;
• Right to compensation.

The applicable right depends on the situation that caused harm. The right to information is a general right. The right to reimbursement is guaranteed in case of re-rerouting or rebooking in the event of a denied boarding or a cancellation. The right to care is tied to the denial of boarding, cancellation or delays at departure. The right to compensation is linked to the denial of boarding, cancellation, delay at arrival, re-routing and reimbursement for downgrading.

Fourthly, the guidelines set out the extraordinary circumstances in which an air carrier is exempted from providing compensation for a delay or cancellation.

The air carrier must fulfil two cumulative criteria to rely on the exemption. It must prove that extraordinary circumstances existed and that there is a link between the delay or cancellation and these circumstances. It must also demonstrate that the delay or cancellation was unavoidable even if the air carrier took all reasonable measures. The guidelines provide an enumeration of internal and external events that could lead to delays or cancellations. The guidelines specify that, generally, internal events do not constitute extraordinary circumstances whilst external events do.

The guidelines also provide insight into passenger rights in the case of significant travel disruption caused by events such as the COVID-19 pandemic and for multimodal journeys.

Moreover, the guidelines detail some procedural rules. They indicate the national enforcement bodies that can hear the complaints and the alternative dispute resolution entities that can help. Moreover, the guidelines set out the jurisdictional rules as well as the prescription rules that are applicable to the claims.

Lastly, the guidelines specify the rules about the liability of air carriers which bind the air carriers under the Montreal Convention.

In order to clarify rights, ensure better application of Regulation (EC) No 261/2004 by air carriers and ensure the Regulation’s enforcement by national enforcement bodies, the European Commission presented a proposal for an amendment to Regulation (EC) No 261/2004 and to Regulation (EC) No 2027/97 in 2013. The proposal is still being examined by the EU legislature.

The updated guidelines are thus welcome to ensure additional legal certainty considering the exceptional long revision process of Regulation (EC) No 261/2004.