This article comments on a recent Court of Justice of the European Union (CJEU) judgment(1) in which the CJEU decided that a "connection flight" covers flights combined by a travel agency regardless of whether there is any relationship between the operating carriers concerned. This means that a flight operated in non-EU countries may also be covered by the EU Flight Compensation Regulation(2) even though the air carriers are not related by any kind of contract.
In order to travel from Stuttgart, Germany, to Kansas City, United States, in July 2018, a passenger concluded an agency travel contract with a travel agency in the form of a single electronic ticket for:
- a flight from Stuttgart to Zurich, Switzerland, operated by Swiss International Air Lines AG; and
- two flights connecting Zurich to Philadelphia, United States, and Philadelphia to Kansas City, respectively, operated by American Airlines.
The ticket number appeared on the boarding passes for those flights. The ticket indicated that American Airlines was providing the services and it contained a single "filekey" reservation number relating to the entire journey. The travel agency issued an invoice showing a single user price for the entire journey and for the return from Kansas City to Stuttgart, passing via Chicago, United States, and London, United Kingdom.
While the flights from Stuttgart to Zurich and from Zurich to Philadelphia were on schedule, the arrival of the flight from Philadelphia to Kansas City, operated entirely outside the territory of the European Union, was delayed by more than four hours.
Before the German courts, flightright, to which the rights arising from that delay had been assigned, claimed compensation of €600 from American Airlines, pursuant to article 7(1)(c) of the EU Flight Compensation Regulation.
The dismissal of the action at first instance was upheld on appeal by the Stuttgart Regional Court, which held that American Airlines was not the operating air carrier, having operated a flight departing from the territory of a member state (Germany), so the EU Flight Compensation Regulation did not apply to it and therefore no compensation was due. There was no indication that the defendant (American Airlines) had undertaken to transport the claimant (the passenger) from Stuttgart to Kansas City, or that it had assumed responsibility for that transport under a code sharing agreement.
Flightright then appealed to the Federal Court of Justice, which took the view that the outcome of the dispute depended on the interpretation of a "connecting flight".
To decide whether the passenger could be compensated in respect of the delay described above, pursuant to the EU Flight Compensation Regulation, the CJEU had to ascertain whether the last flight had to be regarded as part of a connecting flight, within the meaning of article 2(h) of the EU Flight Compensation Regulation, having an airport located in the territory of a member state as its point of departure.
The CJEU decided that the EU Flight Compensation Regulation must be interpreted as meaning that the concept of a "connecting flight" covers a transport operation comprising a number of flights operated by separate operating air carriers that do not have a specific legal relationship, where those flights have been combined by a travel agency that has charged an overall price and issued a single ticket. Therefore, a passenger departing from an airport located in the territory of a member state whose arrival at the destination of the last flight is significantly delayed may rely on the right to compensation pursuant to article 7 of the EU Flight Compensation Regulation.
The CJEU decision relies on the following three arguments:
- The term "connecting flight" must be interpreted broadly in the interest of a high level of protection for passengers referred to in recital 1 of the EU Flight Compensation Regulation.
- There is no provision in the EU Flight Compensation Regulation linking the classification as a connecting flight subject to the condition that there is a specific legal relationship between the operating air carriers.
- In accordance with article 13 of the EU Flight Compensation Regulation, the operating air carriers comprising the connecting flight in question may seek compensation from a tour operator or from another person with whom they have concluded a contract, in accordance with the applicable national law. Accordingly, the EU Flight Compensation Regulation does not preclude the operating air carrier which has had to pay the compensation provided for by the EU Flight Compensation Regulation from being able to seek compensation in respect of that financial burden, in particular from the person through whom the tickets were issued, in the event of a failure by the latter to fulfil its obligations.
The above arguments are not convincing. Moreover, the CJEU appears to have misjudged the legal relationship between travel agencies and air carriers.
While it is correct that a high level of protection for passengers must be taken into account when applying the EU Flight Compensation Regulation, recital 4 of the EU Flight Compensation Regulation also states that it is required to ensure that air carriers operate under harmonised conditions in a liberalised market. As most travel agencies have their own independent International Air Transport Association licence, they are able to arrange and charge flights without having to pay attention to any contractual relations between the respective participating and operating air carriers in any way. In fact, the air carrier has no influence over flights arranged by travel agencies at all. The CJEU's argument that the operating air carrier may seek compensation from the person "through whom the tickets were issued" is ineffectual, because in most cases there is no such contract. Even if this is the case, it remains unclear how compensation of the financial burden is supposed to be achieved. Referring to article 13 of the EU Flight Compensation Regulation therefore seems to be a fictitious argument.
It is common ground that, according to the EU Flight Compensation Regulation, an operating air carrier shall not be obliged to pay compensation, if it can prove that the cancellation was caused by extraordinary circumstances, which could not have been avoided even if all reasonable measures had been taken. So, air carriers must have all possibilities to take measures to avoid delays. If the CJEU allows the travel agencies to decide what is considered to be a "connecting flight" and not the air carriers, there is no chance for the air carriers to avoid delays or take reasonable measures, as it is not up to the air carriers to decide how connecting flights are combined. Of course, the operating carrier still has the usual arguments to defend a compensation claim if there is an extraordinary circumstance, but as it may now also concern flights completely disconnected from EU law, it may be even harder for an air carrier to prove the extraordinary circumstance from a different continent not departing directly from the European Union.
The CJEU judgment extends the applicability of the EU Flight Compensation Regulation outside the European single market in an unreasonable manner. It clearly states in article 3 that the regulation shall apply to passengers departing from an airport located in the territory of a member state to which the treaty applies or to passengers departing from an airport located in a third country to an airport situated in the territory of a member state to which the treaty applies. The wording explicitly demands a connection to the member states that was not present in the case decided by the CJEU.
This decision is an alert for air carriers that may not be used to dealing with the EU Flight Compensation Regulation. They may now have to deal with both justified and unjustified claims under the EU Flight Compensation Regulation in the European courts and will need to develop a strategy to defend themselves in foreign court proceedings against unjustified claims, to prevent abusive claims by plaintiffs.
For further information on this topic please contact Liliana Rodriugues-Kaps at Arnecke Sibeth Dabelstein by phone (+49 69 979885-223) email ([email protected]). The Arnecke Sibeth Dabelstein website can be accessed at www.asd-law.com.
Endnotes
(1) Case Cā436/21, 6 October 2022.
(2) No. 261/2004.