Airlines warn of fare increase after losing passenger compensation battle

AIRLINES have warned they will be forced to increase airfares after they lost their battle to block compensation for stranded and delayed passengers.

Organisations, including Ryanair and Aer Lingus, said the new regulations will cost the industry an estimated €600 million a year.

New and increased compensation payments were introduced by the European Commission last year, including payments from €250 to €600 in compensation or new tickets for delayed or cancelled flights.

If a flight is cancelled the airline must reimburse passengers or rebook them on a flight to their final destination. If a flight is delayed by more than five hours, they must be refunded and be compensated if the flight has been overbooked.

The airlines, furious at the increased cost, challenged the matter in the British Courts that referred it on to the European Court of Justice in Luxembourg.

It ruled the regulations were legal and found they do not discriminate against airlines despite not applying to all forms of transport.

Ryanair and other low-cost airlines pointed out that frequently the compensation would amount to considerably more than the passenger paid for the original ticket.

But the court ruled that the “the damage suffered by passengers of air carriers in the event of cancellation of, or a long delay to a flight is similar whatever the airline with which they have a contract and is unrelated to the pricing policies operated by the airline”.

Ryanair’s head of regulatory affairs, Jim Callaghan, said they were very disappointed with the ruling and will continue to fight against the legislation.

“This discrimination and distortion of competition is highlighted on a day when the ferries cancelled all services to Ireland but are not required to reaccommodate passengers or pay any compensation whatsoever.

“It makes no sense. Why is there one rule for airlines, who rarely cancel flights, and a different set of rules for ferries and trains who frequently cancel?” he said.

European Low Fares Airlines Association secretary general Jan Skeels said the law should not penalise delays which were usually outside the control of airlines.

International Airline Transport Association spokesperson Tony Concil said the rules will not benefit passengers in the long term.

“The industry loses approximately €600m a year with this regulation and the industry will have to recuperate that money somehow,” he said.

The ruling was welcomed by consumer groups, MEPs and the European Commission, who introduced the new legislation last February.

MEP Mairead McGuinness said: “This ruling will force the airline industry to make sure that it adheres to its schedules in the knowledge that where it doesn’t it will have to pay the price.

“The ruling shows how the EU stands by the consumer and this kind of consumer protection is essential in an open and free marketplace.”