By Dale Keller, chief executive, Board of Airline Representatives in the UK (BAR UK)
The escalating furore over regulation EC261/2004, following the UK Court of Appeal ruling on the Huzar v Jet2 case, demonstrates the need for urgent amendment to the regulation in order to finally achieve clarity.
It is expedient for some to suggest that airlines are not taking due care of their passengers and should shut up and pay up, a view that is firmly rejected by the airline industry.
Let’s look at some key facts.
The regulation was imposed by the European Commission back in 2004 as a financial disincentive to airlines cancelling flights or using overbooking practices that meant passengers could be denied boarding.
Although not popular with airlines at the time, the evolution of new distribution methods, e-tickets and online check-in meant that airlines soon gained far greater control of their seat inventory and were able to increase their seat factors without the need for traditional overbookings.
Therefore, the combination of technological gains, an increasingly competitive sector and the legislation could be regarded as a success, and the travelling public benefited from lower fares and improved efficiency as a result.
However, airlines were always concerned that the regulation was poorly drafted and implemented without due consultation with the industry.
The regulation was put to the test in 2009 with the European Court of Justice ruling (Sturgeon v Condor) that the regulation should also be applied to delayed flights.
What’s relevant here is that no other mode of transport is subject to anything approaching this level of compensation, where settlements can often exceed the original airfare paid.
Delayed and cancelled flights cost airlines dearly in reputation, operationally and financially, and every airline already has ample incentives to maintain its schedule integrity and understands very well the importance to prioritise its customer care.
The Huzar ruling by the Court of Appeal that unspecified technical defects, that are unforeseen and unexpected, should not be considered as extraordinary now impacts upon the risk profile and cost base of the airline industry.
These factors simply do not allow airlines to keep spare aircraft, worth many millions in capital, parked as back-ups across vast route networks in case of unforeseen technical occurrences.
It’s a credit to the industry how it has made flying so affordable and accessible, but the commonplace can be taken for granted and its easy to overlook the huge number of third party suppliers and complex external factors coming together to get each flight on its way.
So with courts across Europe making their own interpretations over what is, or is not, included under the regulation, and with each EU Member State now applying its own limitation period on historical claims, rather than the Montreal Convention period of two years, the final answer can only lie with Brussels.
Yet we face a problem there too.
The ongoing Sovereignty dispute between Spain and the UK over Gibraltar has entangled EC261 over Spain’s insistence that Gibraltar Airport be excluded from all EU aviation measures, something that the UK naturally opposes.
This stalemate has stalled all discussions on the EC261 amendments package.
You can sense the total despair of the airline industry at being squeezed between what it regards as disparate and uninformed court rulings far from the intention of the regulation and the breakdown in progress to drive through the necessary amendments with the European Commission and European Parliament in order to achieve a balanced approach to the needs of the travelling public and the industry.
We need an EU regulation that is applied the same across the whole EU and sadly it’s telling that the proposed amendments exceed the length of the original regulation and after 10 years we still don’t have legislation fit for purpose.
For now, we can expect airlines in the UK to stay cases for claims on technical delays pending a request for appeal to the Supreme Court and ongoing lobbying to politicians to cut through the bureaucracy with some urgency.
Perhaps its time to think about whether the travelling public is really best served by a less competitive European airline sector and higher fares for the many, in order to serve increased compensation for the few.