The European Commission's Proposal to Amend EU Regulation 261/2004. by Arpad Szakal

Transcription

1 The European Commission's Proposal to Amend EU Regulation 261/2004 by Arpad Szakal On 13 March 2013 the European Commission published its proposal to amend Regulation 261/ on air passenger rights. The Regulation has been in force since February 2005 and it intends to provide clearer passenger rights in the event of significant delays, cancellation of flights and denied boarding. The Regulation applies to all passengers and flights departing from an airport located in the territory of a European Member State, regardless of the nationality of an airline, or departing from an airport outside the EU to a destination within the EU, only where the airline is registered in a Member State. The application of the EU passenger rights rules has improved significantly since its entry into force however, the limits of non-legislative actions, such as guidelines and voluntary agreements, have been reached and a revision of the legislation itself is necessary to ensure that passenger rights work in practice as they should. One of the main problems for passengers has been that, while they have strong rights under EU law, they sometimes find it difficult to claim those rights and feel frustrated when air carriers do not appear to apply the rules. The lack of definitions and unclear provisions in the text of Regulation 261/2004 led to inconsistencies and loose standards in the application of the law. The Commission's proposal aims to clarify some aspects of the Regulation and it goes as far as introducing new passenger rights. It provides passengers with effective complaint handling procedures and strengthens enforcement, monitoring and sanctioning policies to ensure a better application of passenger rights. The proposal also tries to ensure that the obligations of air carriers remain financially realistic. In addition, measures are proposed on price transparency in order to enhance passengers' protection in case their airline becomes insolvent. In a number of respects the Commission's proposal has been well received by the aviation industry. Trigger times for financial compensation in case of delay take into account the duration of the flight. The introduction of an hour threshold for the provision of care in the case of flight delay, as against the current thresholds of 2, 3 or 4 hours depending on flight distance, is widely recognised as representing an improvement for consumers as well as being easier to administer from the perspective of an airline. However, there are some key areas of concern that remain for airlines. Re-Routing Today, passengers may be stranded for a long time while waiting for rerouting with another flight of the same air carrier. The fact that it is not clear at what point the carrier must allow the passenger to reroute via another airline has led to many disputes between air carriers and passengers. 1 Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91, OJ L46/1 of

2 The Commission's proposal tries to bring some clarity by stating that, where the air carrier cannot ensure the rerouting within 12 hours on its own services, it must offer rerouting with other air carriers or other transport modes where available. The proposed obligation has attracted considerable criticism. In particular, the proviso that the other carrier or transport operator shall not charge the contracting carrier a price that goes beyond the average price paid by its own passengers for equivalent services in the last three months is illdefined. It is unclear how this rule is going to be implemented and enforced in practice. It is also unclear how that requirement will be enforced, particularly against non-community air carriers operating flights departing from non-eu airports. The proposed price cap might also give rise to potential competition law concerns, given that it seems to encourage the exchange of pricing information between carriers. Extraordinary Circumstances The term "extraordinary circumstances" is of crucial importance as, under those circumstances, air carriers are not required to pay compensation to passengers. The term is not clearly defined in the current Regulation 261/2004. The proposal aims to bring clarity as to what kind of circumstances qualify as "extraordinary". The Commission's proposal defines "extraordinary circumstances" which falls in line with the Court of Justice of the European Union s decision in Wallentin-Hermann 2. On 23 July 2013 new guidelines were published by European Commission on behalf of national enforcement bodies. The guidelines have been developed by national enforcement bodies across the EU and clarify when a delay or cancellation should generally be considered to not be an airline s fault ( extraordinary circumstances ). Airlines have to compensate passengers when flights are cancelled within two weeks of departure or arrive more than three hours late, but only if the issue was within the airline s control. The publication of the NEB List is viewed as a positive step by the industry (a copy of the NEB List is attached at Appendix 1). Connecting Flights The rights to assistance and compensation in cases where a passenger misses a connecting flight because his first flight was late are currently not clearly defined. The proposal aims to bring some clarity to these rights i.e. assistance after 2 hours and compensation if delay at arrival of more than 5 hours for all intra-eu flights and short international flights of less than 3,500 km. This is a major drawback particularly for carriers operating feeder flights connecting to long haul routes. With delay calculated on the basis of arrival at final destination, the carrier operating the feeder service faces exposure to compensation of up to EUR 600 where a short delay to its flight (which in itself falls well below the threshold for delay compensation) causes a passenger to miss his or her onward long haul 2 Case C-549/07 Frederike Wallentin -Hermann v Alitalia Linee Aeree Italiane SpA - ECJ's judgment of 22 December 2008

3 connection. The proposed connecting rule would make it highly questionable for small carriers to continue to offer feeder services. Further, as the Montreal Convention 1999 (MC99) already sets out specific rules on the allocation of liability between carriers, in certain circumstances what the European Commission proposes would actually amount to a breach of the Convention. Standard interline agreements under which airlines enter into commercial cooperation, already include robust operational practices, consistent with MC99, for missed connections. And the provision will be impossible to enforce for some journeys with connecting points outside EU territory as it contravenes the territorial sovereignty of those third countries, potentially even interfering with their own consumer protection regimes. Conclusion The new Regulation is currently expected to come into force in early However the legislative timetable will be subject to further change depending on the degree of agreement that can be reached at European Parliament and Council level. In its current form, however, the proposed revision of the Regulation would be disastrous for regional carriers. It is expected to cause considerable confusion for travellers who take a connecting flight to the point of their long-haul departure and it might potentially harm regional and domestic travellers too by forcing smaller carriers to opt out of services into major hubs.

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