Currently the Civil Aviation Law (the "Law") describes the cases in which air transportation providers may be responsible for breach of the services provided to users, for damage caused to passengers, damage caused to cargo or baggage, delays, or for the cancellation or overbooking of flights.

For purposes of regulating the above, the current text of the Law establishes the compensation for destruction or damage of luggage, to be the equivalent to forty minimum wages (approximately up to USD$186.00); while the compensation for destruction or damage to checked baggage may be the equivalent of seventy-five minimum wages (approximately up to USD $350.00). The Law gives the Federal Civil Code enforceability regarding damages caused to passengers.

Recently, Congressman Teofilo Torres Corzo submitted to the Senate, an initiative intending to amend Civil Aviation Law, to determine the Liability of Airlines for Damage or Failure in the Provision of Air Transport Service, which is specifically intended to amend sections relating to liability of service providers against airline passengers rights.

This initiative contains the following topics:

  1. Delay, Cancellation or overbooking of flights;
  2. Liability of Airlines for miscarriage, damage caused to cargo or baggage and damage caused to passengers.
  3. Validation of rates and conditions of sale of tickets; and
  4. Creation of an administrative area within the Ministry of Communications and Transportation (the "Ministry") to the attention of affected users.

I. Delay, Cancellation or overbooking of flights

In this regard, the initiative seeks to add the event of flight delay for more than three hours for causes attributable to the airline, establishing a compensation that must be fair and comprehensive covering damage to the affected passenger, which shall not be less than fifty percent of the passenger ticket price. The airline shall provide telephone and Internet service to users to communicate with the destination.

II. Airlines liability for luggage miscarriage, damage caused to cargo or baggage and damage caused to passengers

This initiative seeks to amend this section in the Act, abolishing articles 62, 63 and 64, which currently set forth the liability in case of these assumptions. The current text of the initiative does not set the terms in which the damage must be repaired; however the preamble of the initiative seeks to grant a faculty for passengers to demand the full amount of the loss or damage suffered. Such authority shall be defined, in turn, by the regulations of the Law.

III. Validation of rates and conditions of sale of tickets

Currently the Ministry has the faculty to set specific rates under certain assumptions, promoting competition and under issues of economic regulation. With this initiative the Ministry also can validate prior submitted airlines service rates, and the Ministry shall issue a certificate in which the opinion issued by the Federal Competition Commission or the Federal Consumer protection office is referred to.

IV. Creation of an administrative area within the Ministry to the attention of affected users

Finally, the Ministry is empowered to create an area for user's attention, whose duties will be to settle disputes about rates, allowances and abuse in the marketing conditions of services.

Note:

It is important to notice that this initiative does not seek to restrict in any way the supply and demand of air services, but rather the Ministry is seeking more control and surveillance to be fulfilled with the service offered.

Conclusion

The initiative submitted to the Senate aims to provide greater legal and property security to passengers and users of services provided by airlines, however this may cause several inconveniences to the airlines for reconsideration on its politics regarding services provided. As an initiative under discussion, the Senate may amend the provisions thereof; even the final draft of the initiative may vary if approved. As soon as the legislative process is completed and the decree is published at the Federal Official Gazette, we will let you know.