Airlines warned of severe rise in cost of delays

Airlines warned of severe rise in cost of delays

Airlines have been warned they face a severe rise in the cost of delays following a recent European court judgment, with leisure carriers likely to be hardest hit and the impact passed on to passengers.

European Court of Justice advocate general Yves Bot confirmed in mid-May that passengers suffering delays of three hours or more are entitled to compensation, confirming a European court decision of 2009.

Specialist lawyer Jo Kolatsis, of Gates and Partners, said: “This is going to be very expensive for carriers. It will place a financial and operational burden on airlines.”

Speaking at an Abta travel law seminar in London, Kolatsis warned: “Hopefully you all have cash reserves because you could end up with a large amount of claims.”

Kolatsis described the advocate general’s opinion as “13 pages of nonsense”. She said: “He confirmed passengers are entitled to compensation for delays and felt this could apply to any complaint back to 2005.

“This is bad for everyone. It will put pressure on turnaround staff [to avoid delays]. We could end up with aircraft forced to return to base because of safety issues that could have been picked up [without the pressure to avoid delay].”

Kolatsis also warned that a European Commission (EC) revision of passenger rights regulations is unlikely to improve the situation, but could instead enshrine compensation for delays in the regulations.

EC Regulation 261/2004 on denied boarding, cancellation and delay, which came into force in 2005, left passengers without entitlement to compensation for delays. But a 2009 judgment, in the so-called Sturgeon case, changed that.

“It has ended up with every passenger thinking they are entitled to compensation,” said Kolatsis. The compensation can rise to euro600 (£500) depending on distance, regardless of the fare.

Kolatsis said: “We can pretty much guarantee the revision will include compensation for delays.”

Draft proposals for the revision are expected before the end of this year. Kolatsis warned: “It is going to cost a lot. They are incorporating everything into the proposals. Sturgeon has made a bad regulation ten times worse.”

Thomas Cook director of government relations and external affairs Andy Cooper said: “The leisure sector will suffer more from this. We can’t cancel a flight [to avoid a three-hour delay], unlike an airline like easyJet. If we pick up a delay it can roll over a day or two days.

“We know the intention [of the regulation] was not to give compensation for delays. We have to persuade the EC to act rationally.”

However, Cooper warned: “We have a bunch of Euro MPs who fly to Brussels every week and are delayed and they are not sympathetic.”

He told Travel Weekly: “We have a European Parliament making policy based on the fact that MEPs travel a lot, and the European court sitting behind happy to make law rather than interpret it.

“It is not in consumers’ interests to make it difficult for businesses to continue to trade. But it will leave us having to decide in every case on the cause of a delay and whether to compensate consumers.”

Cooper said Civil Aviation Authority figures show that about 1% of UK flights are delayed more than three hours, seven times more than the proportion suggested by the advocate general.


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