5 th of September 2013 No 6-25/ PRECEPT No 6-25/

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1 Pullmantur Air Calle Mahonia 2. Planta 6 a Campo de las Naciones Madrid Spain jhernandez@pullmanturair.com PRECEPT No 6-25/ th of September 2013 No 6-25/ Precept prepared by: Katrin Malm, head of tourism and advertising division of the Consumer Protection Board of Estonia Date and place of precept: ; Rahukohtu 2, Tallinn Addressee of the precept: air carrier Pullmantur Air, Calle Mahonia 2. Planta 6 a, Campo de las Naciones, Madrid, Spain RESOLUTION: With the precept: 1) The Consumer Protection Board draws your attention to the violation of Article 7 of the Relulation (EC) No 261/2004 and judgement of the Courf of Justice of the European Union (CJEU) in the joined cases C-402/07 and C-432/07 and judgement of the CJEU in the joined cases C-581/10 and C-629/10, which rule, that passengers whose flight arrive more than 3 hours late may be entitled to compensation according to article 7 of the Relulation (EC) No 261/2004 in current case the flight was delayed 4 hours on 8 th of September 2012 and the compensation under the article 7 of the Regulation (EC) No 261/2004 has not been paid; 2) The Consumer Protection Board requires you to redress non-compliance with Regulation 261/ 2004 to pay a compensation for the passengers whose flight was delayed 4 hours in amount of 400 Euros per pax. Precept has obligatory force and must be implemented not later than 7 th of October Notify the Consumer Protection Board of implementation of the precept by (hedi.jyrioo@tarbijakaitseamet.ee) or ordinary mail (Rahukohtu 2, Tallinn). a

2 PROCEDURE: The CPB has received a complaint regarding flight No PLM-6126 (EB6126) from Tallinn to Madrid on 8 th of September 2012 operated by Pullmantur Air. According to the complaint the flight No PLM-6126 from Tallinn to Madrid on 8 th of September 2012 was delayed nearly 4 hours and arrived to Madrid at 02:45 (local time). Passengers are requesting for compensation under Article 7 of the Regulation (EC) No 261/2004 in the amount of 800 euros (400 euros per pax). The Consumer Protection Board of Estonia forwarded the complaint to Pullmantur Air on 20 th of March 2013 for the first time and kindly asked to provide explanation in relation to aforenamed situation and in case of refusing to pay the compensation by relying on extraordinary circumstances, kindly asked to present the documents which can prove the reasons for cancellation of flight (such as aircraft s technical log). The term to give a response was 4 th of April Since no response was given, the complaint was sent to Pullmantur Air on 18 th of April 2013 for the second time with term of response by 2 nd of May On 6 th of May 2013 a notice about administrative procedure with a warning of precept was prepared and forwarded to Pullmantur Air to which the Consumer Protection Board of Estonia received a response on 9 th of May 2013 that Pullmantur Air finds that the delay was caused by extraordinary circumstances, however, evidence proving the occurrence of extraordinary circumstances was not submitted. In addition, Pullmantur Air was on the position that since the flight was a part of a package the compensation should be claimed from the tour operator according to Directive 90/314/EEC. In the letter dating from 14 th of May 2013 the Consumer Protection Board of Estonia reminded Pullmantur Air that the claim of occurrence of extraordinary circumstances must be accompanied by documentary evidence and the Consumer Protection Board of Estonia also explained that the Regulation No 261/2004 applies also in cases where the flight forms a part of a package, except in cases where the cancellation of a package was caused by other reasons than cancellation of flight. The Consumer Protection Board of Estonia also requested for documentary evidence. Pullmatur Air responded on 28 th of May 2013 explaining that since the delay was not a major airspace disruption, the Air Traffic Management is not providing any evidence. Furthermore, Pullmantur Air claimed again that since the flight was a part of a package, the compensation should be claimed from the tour operator. After the correspondence with the air carrier the Consumer Protection Board of Estonia has been consulting with national enforcement body of Spain, namely Direcciòn de Seguridad Aeronàutica regarding their experience with Pullmantur Air and the claim that the documentary evidence cannot be submitted or that the flight was a part of a package. Similarly to the Consumer Protection Board of Estonia, the Direcciòn de Seguridad Aeronàutica implements disciplinary procedure in case the documentary evidence is not

3 provided and the Regulation No 261/2004 is applied also in cases where the flight was a part of a package. On 14 th of August 2013 a notice about administrative procedure with a warning of precept No 6-25/ was sent to Pullmantur Air with a registered letter and via and Pullmantur Air was given an opportunity to give its opinions and contests or confirmation about the performance of the obligation provided by clause 1(b) of article 7 of the Regulation (EC) No 261/2004 without precept not later than 23 rd of August According to notice of delivery the notice about administrative procedure was received at legal address on 29 th of August Nevertheless, Pullmantur Air has not provided any opinions and contests nor performed the payment. Since the Consumer Protection Board of Estonia hasn t received documentary evidence which can prove that the long delay was caused by extraordinary circumstances, we are on position that Pullmantur Air should pay compensation to the passengers. APPLICABLE LAWS: 1. Article 7(1)(b) of the Regulation (EC) No 261/ subsection 1¹ of 60 3 of the Aviation Act according to which the director general of the Consumer Protection Board of Estonia or an authorised person has the right to make a precept to the air carrier with a claim for compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights. EXPLANATIONS OF THE CONSUMER PROTECTION BOARD ABOUT THE PRECEPT: Article 3(6) of the Regulation No 261/2004 excludes the application of the Regulation No 261/2004 only in cases where the package is cancelled due to other reasons than the cancellation of flight. Thus, in all other instances it is possible to apply Regulation No 261/2004 and this approach is in consent with the Council Directive 90/314/EEC (Directive 90/314/EEC) and judgements of the Court of Justice of the European Union in joined cases C- 402/07 and C-432/07 (Sturgeon) and in joined cases C-581/10 ja C-629/10 (Nelson). On 19 th of November 2009 the CJEU ruled in judgement in joined cases C-402/07 Sturgeon and Others v Condor Flugdienst GmbH and C-432/07 Böck and Others v Air France SA that articles 5, 6 and 7 of Regulation No 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

4 final destination three hours or more after the arrival time originally scheduled by the air carrier. Such a delay does not, however, entitle passengers to compensation if the air carrier can prove that the long delay was caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken, namely circumstances beyond the actual control of the air carrier. The same reasoning has been confirmed by the CJEU in judgement in the joined Cases C-581/10 Nelson and Others v Deutsche Lufthansa AG and C-629/10 TUI Travel and Others v Civil Aviation Authority on 23 rd of October Hence, the operating air carrier is obliged to pay compensation pursuant to Article 7 of the Regulation (EC) No 261/2004 in case of delay of more than three hours unless the air carrier can prove that the long delay was caused by extraordinary circumstances. In current case the flight was delayed for 4 hours. According to Article 5(3) of the Regulation (EC) No 261/2004 an operating air carrier shall not be obliged to pay compensation in accordance with Article 7, if it can prove that the cancellation (also delay in the light of aforementioned court judgements) is caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken. Under consideration 14 of the Regulation (EC) No 261/2004 such circumstances may, in particular, occur in cases of political instability, meteorological conditions incompatible with the operation of the flight concerned, security risks, unexpected flight safety shortcomings and strikes that affect the operation of an operating air carrier. According to consideration 15 of the Regulation (EC) No 261/2004, extraordinary circumstances should be deemed to exist where the impact of an air traffic management decision in relation to a particular aircraft on a particular day gives rise to a long delay, an overnight delay, or the cancellation of one or more flights by that aircraft, even though all reasonable measures had been taken by the air carrier concerned to avoid the delays or cancellations. In current case the air carrier has not submitted any proof to confirm the occurrence of extraordinary circumstances. Consideration 22 of preamble of the Regulation (EC) No 261/2004 which establishes the common rules to passengers in the case of denied boarding, cancelling the flights or long delay and compensation and help in these cases, provides that the member states should ensure that the air carriers comply generally with this Regulation and determine an institution checking this compliance. In the Republic of Estonia, according to the subsection 1¹ of 60 3 of Aviation Act, this institution is the Consumer Protection Board. The Consumer Protection Board of Estonia is convinced that the air carrier Pullmantur Air should pay the compensation according to the article 7 of the Regulation (EC) No 261/2004. So far the compensation has not been paid to the passengers and documentary evidence confirming the occurrence of extraordinary circumstances has not been provided.

5 WARNING OF PENALTY PAYMENT: If this precept is not complied with within the timeframe indicated, the Consumer Protection Board of Estonia will apply a penalty payment in amount of 640 (six hundred forty) euros in accordance with section 2¹ of 60 3 of the Aviation Act. This penalty payment can be applied repeatedly - until the objective sought by a precept is achieved. If Pullmantur Air fails to pay the penalty payment, an execution proceeding may be held. In the event of an execution proceeding Pullmantur Air will be obliged to pay not only the penalty payment, but also bailiff s fee and other enforcement costs. Such execution proceedings may be held pursuant to Regulation 805/2004, if necessary. REFERENCE TO CHALLENGE: A challenge concerning a precept shall be filed: - to the Consumer Protection Board of Estonia within thirty days as of the day when a person becomes or should become aware of the challenged administrative act according to 75 of the Administrative Procedure Act or - to the Tallinn Administrative Court within thirty days after the date on which the administrative act was notified to the applicant according to subsection 1 of 46 of the Code of Administrative Court Procedure. Challenging a precept does not suspend the obligation incumbent on the obligated party to comply therewith nor does a challenge suspend the necessary implementation of measures. SENDING OF PRECEPT: Precept shall be sent with an issue notice and registered letter on to the legal address and by at address jhernandez@pullmanturair.com. SIGNATURE OF THE PERSON HAVING PREPARED THE PRECEPT: Katrin Malm Head of Tourism and Advertising Division