Airlines fight EU ruling on compensation

AIRLINES are to mount a legal challenge to recent EU legislation which improves compensation for air travellers who experience delays, cancellations and overbookings to flights.

The European Court of Justice in Luxembourg will tomorrow hear submissions by representatives of the International Air Transport Association (IATA) and the European Low Fares Airlines Association seeking to overturn a new EU directive. Aer Lingus is one of about 270 airlines represented by the IATA, while Ryanair is one of the driving forces within the ELFAA.

Since February 17, air travellers are entitled to new levels of compensation from airlines for delays and cancellation on all flights either departing or arriving at an airport within the EU.

They include full ticket refunds, food and drinks, free telephone calls and overnight accommodation.

People who are denied boarding due to overbooking of flights are entitled to compensation ranging from €250 to €600 based on the length of the journey.

Airlines can only refuse to provide such compensation if they can prove problems were caused by extraordinary circumstances which exclude bad weather, industrial action and security measures.

It is estimated that more than 250,000 EU passengers will be entitled to compensation each year. However, airlines claim the new EU directive is “misguided and poorly conceived”.

“With this regulation, the EU regulators have endangered the consumer interests they seek to protect,” said IATA director general Giovanni Bisignani.

No-frills airlines argue that “punitive” compensation pay-outs would exceed the actual cost of the ticket in many cases and will lead to higher fares.

Both the IATA and the ELFAA challenged the validity of the British rules implementing the EU directive last year.

However, the High Court in London decided to refer the matter to the European Court of Justice for a preliminary ruling.

The airlines claim that the EU directive on air passenger rights is inconsistent with the Montreal Convention which governs the legal obligations of airlines.

Ireland remains one of only two EU countries which has still failed to appoint an official body to handle complaints from customers who are dissatisfied with compensation offered by airlines.

The Department of Transport has so far failed to explain the reason for the delay in formally nominating an organisation to deal with such issues, although it has been aware since early 2004 that this formed part of its obligations under the terms of the EU directive.

In January, a spokesperson for Transport Minister Martin Cullen stated that a decision on the issue would be made “shortly”.

However, the European Commission has already begun formal infringement procedures against the Government over its failure to designate a body to police rights for airline passengers.