Paweł Mazur

Air carriers’ liability for flight delays under the latest rulings from the ECJ and US courts

A right to compensation may be deduced from Regulation 261/2004 not only for cancellation of a flight, but also for a delay of 3 hours or more. Passengers eagerly exploit this right, but the court decisions continue to raise new controversies.

The European Parliament and the Council adopted the Passenger Compensation Regulation (261/2004) in an effort to unify the protection of rights of airline passengers. The regulation has recently been the subject of several interesting judicial rulings.

Following the 2009 ruling by the European Court of Justice in Sturgeon v Condor Flugdienst GmbH (Joined Cases 402/2007 and C-432/2007), an expansive interpretation of the Passenger Compensation Regulation has developed enabling passengers to seek compensation in the case of delay of a flight by 3 hours or more, not just cancellation of the flight.

The increasing burdens on airlines operating out of European airports, particularly EU-based carriers, and the legal controversies arising out of the Sturgeon case, resulted in issuance of judgments in this area last year by the ECJ as well as US courts.

In a judgment issued on 23 October 2012 in Nelson v. Deutsche Lufthansa AG (Joined Cases C 581/10 and C 629/10), the ECJ held that passengers whose flight is delayed by three hours or more have the same right to compensation as passengers whose flight was cancelled.

The court did not accept the argument by the airlines that their liability in this respect is limited by the Montreal Convention. The judges found that compensation is due under Regulation 261/04 not so much for the delay as such, as for the inconvenience connected with the temporary inability to travel. The court also found that the interpretation adopted in Sturgeon did not violate such fundamental principles of EU law as certainty and proportionality.

Then, on 31 January 2013, in McDonagh v Ryanair Ltd (Case C-12/11), the ECJ held that airlines are required to provide assistance to passengers even in the case of cancellation under extraordinary circumstances. The case had to do with the situation in which a Ryanair passenger found herself when her flight was cancelled because of ash in the atmosphere released by the Eyjafjallajökull volcano in Iceland in 2010. The airline did not allow the passenger to reschedule her flight or provide her with necessary assistance. The court held that even exceptional circumstances cannot release the airline from the duty to provide care to the passenger, and thus the court also found that the airline should pay her compensation, in an amount to be determined by the Irish court.

Rulings by courts in the United States holding that they have jurisdiction in cases brought by US residents against European airlines operating flights between the US and Europe are also of interest. Because carriers have incorporated the rules under Regulation 261/04 into their contractual conditions of carriage, the courts found that the claims were based on breach of the contracts of carriage, rather than the EU regulation as such.

The rulings in the US have not been uniform, but generally depend on the manner in which the rules under the EU regulation are incorporated. Preliminary rulings were issued against Iberia and Lufthansa because their conditions of carriage expressly referred to compensation under Regulation 261/04, while complaints against British Air and Alitalia were dismissed based on an exclusion from these conditions or fare regulations approved by the US Department of Transportation.

It thus appears that the rules designed to strengthen the protection of the rights of airline customers enjoy the full support of EU courts, but the airlines will certainly not give up their efforts to narrow the scope of application of Regulation 261/04 in practice.

Paweł Mazur, Dispute Resolution & Arbitration Practice, Wardyński & Partners