Summary of stakeholder consultation on the possible revision of Regulation 261/2004 30 May 2012 Steer Davies Gleave 28-32 Upper Ground London, SE1 9PD +44 (0)20 7910 5000 www.steerdaviesgleave.com 1
Overview of stakeholder consultation The stakeholder consultation consisted of two elements: Open public consultation: Online via Your Voice in Europe Bilateral consultation: Interviews and direct submissions from a sample of key stakeholders The open public consultation focussed on policy options for revision to the Regulation The bilateral consultation also covered: Collection of information necessary for analysis of the current operation of the Regulation and its impacts, and options for revision More detailed discussion with stakeholders about issues or options particularly relevant to them for example, with NEBs about enforcement 2
Responses to open public consultation High level of engagement: 410 responses in total Included: 62 Airlines and airline associations 30 Consumer organisations 26 Airports/associations 18 Public authorities 11 Tour Operators, travel agents and their associations together with 181 responses from individuals 3
Bilateral consultation and interviews Inputs received from 98 stakeholders 41 face-to-face interviews, focussed on the main pan-eu industry and consumer associations; airlines; NEBs and consumer organisations in 14 case study States Others contributed by direct written submissions and/or telephone interviews Consumer and passenger associations, 28 Other, 5 NEBs, 32 Airline, 18 Airlines' association, 6 Airport, 6 Airports' association, 1 Tour operators' and travel agents' associations, 2 4
Summary of results Widespread agreement that there are significant issues with the current Regulation which should be addressed Less consensus as to what the problems are No agreement as to what should be done: Views of consumer and airline representatives are directly opposed, with NEBs and other stakeholders usually somewhere between these Subsequent slides provide a high level summary of views But not possible to represent all opinions 5
The current operation of the Regulation (1) Airlines and associations considered: Excessive economic burden, particularly that airlines face unlimited liability for incidents which are not their fault (volcanic ash) Article 13 does not help recover costs from third parties Universal rejection of the Sturgeon judgement, due to inconsistency with text of Regulation, objective of legislator, and Montreal Convention Lack of uniform interpretation and process between NEBs Have a commercial incentive to minimise impact of disruption Consumer representatives thought: Complaint handling and enforcement not effective Extensive non-compliance with rights identified in Sturgeon Significant non-compliance with other requirements Not adequately protected if baggage lost / delayed / damaged Increasing problem with unfair contract terms / commercial practices 6
The current operation of the Regulation (2) NEBs: Significant differences in national processes and legislation on sanctions Some provisions of Regulation still need clarification - as a result differences in interpretation, particularly of the Wallentin judgement Sturgeon judgement cannot be enforced in all States Resource constraints mean NEBs have to prioritise their activities Mixed views on airline compliance Limited actions taken (or powers) to enforce other consumer protection legislation in air transport, such as unfair contract terms or baggage 7
Options in relation to travel disruption (1) All stakeholder groups support clarification of the extraordinary circumstances exemption Accepted that not possible to define every possible circumstances Airlines argue for wider exemption than allowed by Wallentin judgement, whereas consumers want this maintained Airlines: Most oppose any extension to the types of disruption covered by the Regulation The Regulation should reflect that delays and cancellations are different Should be no compensation for delays airlines have a commercial incentive to avoid these, and in any case limited by Montreal Convention Airports should put in place contingency plans to handle mass disruption better A minority (mostly low cost carriers) support extension to flights from the EU by non-eu carriers 8
Options in relation to travel disruption (2) Consumer representatives: The Regulation should be clarified so that it can be better understood by consumers and more easily enforced The Sturgeon and Wallentin judgements should be incorporated in the text of the Regulation The Regulation should explicitly define rights in circumstances such as missed connections, diversions, and tarmac delays they may be uncommon but some airlines treat passengers badly in these cases NEBs: Rights should be more clearly defined - not all accepted validity of Sturgeon judgement, but if the right applies, it should be in the text No consistent views as to whether the rights defined in the Regulation should be extended to cover other types of disruption, or flights to the EU 9
Options related to baggage and ancillary charges (1) Airlines emphasise that existing legislation already addresses this: Liability for baggage covered by the Montreal Convention Price transparency covered by Regulation 1008/2008 In a deregulated market, airlines should be free to provide different levels of service no need to further regulate No need for a key facts document to improve clarity of terms and conditions, as Conditions of Carriage already available Consumer representatives argue that: Differences in baggage allowances and other commercial practices between airlines cause confusion Consumers inadequately protected in cases of mishandled baggage Need for immediate assistance if baggage delayed or lost Price transparency provisions of Regulation 1008/2008 not sufficient to allow simple comparisons of prices between airlines Strong support for a key facts document defined at EU-level 10
Options related to baggage and ancillary charges (2) Airports and airport retail representatives consider passengers should be able to carry on board airside retail purchases and other personal items, without fear of additional charges Travel agents and tour operators: Concern about non-compliance with price discrimination and transparency provisions Concern about failure to provide full information on ancillary charges/services to GDS NEBs generally did not support significant extension to the Regulation to cover these issues, but: expressed concern about particular commercial practices (e.g. charges to print a boarding pass) mostly supported improved information for consumers ( key facts ) 11
Options related to other consumer protection issues Consumer representatives consider this a key issue to be addressed in revision to the Regulation, in particular: rules on full and sequential use of coupons ability to transfer tickets to other people cooling off period after confirming a booking ability to correct obvious mistakes free of charge improved means to get in contact with airlines if there is a problem Airlines consider there is no need for further regulation the deregulated market is working well Policy options such as a cooling off period after sale, or prohibition of rules on full and sequential use of coupons, would have a negative impact on airline pricing systems and therefore increase fares Some accept that there may be exceptions in cases of force majeure NEBs often support clarification of particular issues, such as refund of taxes/charges, and right to correct minor booking errors 12
Options related to economic burden (1) Airlines consider this is their priority, in particular: Limit liability (including for care) in circumstances outside airline control, particularly extreme mass disruption such as volcanic ash Compensation levels should not be punitive particularly if not limited to deliberate commercial decisions (e.g. overbooking) Many support compensation being related to ticket price as for other modes, although not all (some network carriers oppose this) Airlines should be able to reclaim costs from responsible third parties - although some concern about leading to higher airport / ANS charges Consumer representatives views differ: Passengers need to be protected particularly in extreme cases such as volcanic ash although some support a limit on number of days If airlines are given the right to redress from third parties, passengers should still be able to claim directly against the airline 13
Options related to economic burden (2) Airports consider that: Article 13 is already sufficient to recover costs from third parties Passengers contract with airlines, so airlines are in best position to help if there is disruption Airports should focus on maintaining operations during disruption Airlines could help minimise impacts of disruption, e.g. by not insisting passengers come to the airport if they want to claim assistance NEBs: Some support for linking compensation to ticket price, possibly with minimum/maximum values Most do not support linking compensation to length of delay, due to increased risk of conflict with Montreal Convention Mixed views as to whether airlines should have improved means to recover costs from third parties 14
Options related to enforcement (1) NEBs had different views on how to improve enforcement: Reflect different legal and administrative systems in each State hence should not define (for example) minimum sanctions at EU level Most think compliance should not be a license condition partly as withdrawal of license not a credible threat Some agree they could review operational processes as well incidents do not necessarily have the powers at present, and may be no purpose, if only incidents can be sanctioned. But no consensus. Airlines consider enforcement should be more consistent, but otherwise did not support options for changing it: Penalties should not be disproportionate such as loss of license NEBs should not impose unreasonable demands, such as for detailed responses in a short timescale in a local language Some (mostly low cost) carriers support publication of performance data as an incentive for improvement and to improve consumer choice 15
Options related to enforcement (2) Consumers representatives consider enforcement has to be made more effective: NEBs should check carriers procedures to ensure these are compliant NEBs should check carriers have appropriate contingency plans Compliance could become a license condition Role of NEBs should be extended to cover baggage complaints Airports often expressed no view, but where they did: Some consider enforcement is ineffective or inconsistent Any new requirements should be proportionate 16
Options relating to complaint handling and passenger redress Airlines consider this should not be further regulated Inhibit innovation passengers benefit from a competitive market (range of products and service levels) Extending deadlines for complaints about baggage would conflict with Montreal Convention EU should not impose alternative dispute resolution processes as there is a need to reflect differences in national law; if there is an ADR, need suitably qualified staff Consumer representatives believe further regulation necessary: Airlines should make it easier for passengers to complain allow complaints by email, and using toll-free telephone numbers Deadlines for baggage complaints are too short NEBs should do more to assist passengers with individual complaints All Member States should have an ADR process in place NEBs mostly support requiring airlines to make it easier for passengers to complain, and for airlines to respond within a fixed timescale 17
Disabled passengers and persons with reduced mobility Loss and damage to mobility equipment Passenger representatives and many NEBs think Montreal Convention limits on liability for loss/damage to mobility equipment too low Need for improved information on Montreal Convention waivers Remove limit of liability on domestic and intra EU flights Can there be a requirement for mandatory insurance? Assistance How to prioritise assistance for disabled passengers and PRMs in situations of mass disruption e.g. accessible accommodation Complaint handling Complaint handling mechanisms need to be accessible to all passengers 18
Thank you 19