Following a referral from the Hamburg Regional Court, the European Court of Justice (ECJ) recently responded to the question of which air carrier is the 'operating air carrier' within the meaning of EU Flight Delay Compensation Regulation (261/2004) where the flight is operated under a wet lease agreement.(1)

Facts

Four plaintiffs claimed compensation from airline A (the defendant air carrier) for a delay of more than three hours based on Articles 5 and 7 of the EU Regulation 261/2004. The plaintiffs had a booking confirmation for a flight from Hamburg (Germany) to Cancún (Mexico) bearing a flight number, the code for which referred to airline B (the confirming air carrier). The booking confirmation stated that the bookings were issued by the confirming airline, but that the flight was operated by the defendant airline.

The Hamburg Local Court granted the claim in the first instance. The local court held that the defendant air carrier was the operating air carrier, referring to Recital 7 of EU Regulation 261/2004, according to which it is irrelevant whether the operating air carrier carried out the flight with an own aircraft or under dry or wet lease. Further, consumers should be able to rely on the information given in the booking confirmation, which expressly refers to the defendant as operating air carrier.

Following the defendants' appeal, the Hamburg Regional Court stayed the proceedings and referred the question to the ECJ for a preliminary ruling.

Decision

The ECJ ruled that an air carrier that leases an aircraft and crew to another air carrier under a wet lease agreement but bear no operational responsibility for the flights is not covered by the concept of 'operating air carrier' within the meaning of EU Regulation 261/2004. This also applies if the booking confirmation refers to the lessor as operating air carrier.

According to the ECJ, for an air carrier to be classified as an operating air carrier within the meaning of Article 2(b) of EU Regulation 261/2004, two cumulative conditions are required:

  • the operation of the flight in question; and
  • the existence of a contract concluded with the passenger or on behalf of another person having a contract with that passenger.

In the first condition, the concept of 'flight' is the central element which, according to established ECJ case law, is understood as an air transport operation (ie, a unit of such transport) performed by an air carrier which fixes its itinerary. Therefore, an air carrier which performs a particular flight and offers to conclude a contract of air carriage with members of the public must be regarded as the operating air carrier and is responsible for the operation of the flight, including any cancellations or significantly delays.

In the present case, the defendant air carrier merely leased the aircraft and its crew to the confirming air carrier, but the fixing of the itinerary and the performance of the flight were determined by the confirming air carrier who must be regarded as operating air carrier.

According to the ECJ, this finding is consistent with the objective to ensure a high level of protection for passengers as it enables passengers to be guaranteed compensation or that they will be cared for, without needing to take account of contractual arrangements made by the air carrier. The ECJ also referred to Recital 7 of EU Regulation 261/2004, according to which the operating air carrier is responsible for its obligations, irrespective of whether the flight is operated with owned aircraft or under a wet lease.

Finally, the ECJ confirmed that the information in the booking confirmation regarding which air carrier operates the flight should not anticipate the identification of the operating air carrier because of the different objectives of EU Regulations 2111/2005 and 261/2004.

Comment

The ECJ's decision confirms a judgment of the Federal Court of Justice handed down in 2017, which also classified the lessee as the operating air carrier within the meaning of EU Regulation 261/2004 where the flight is operated under a wet lease agreement.(2) In contrast, where flights are operated under codeshare agreements, the Federal Court of Justice has focused on the real act of performance (ie, on the air carrier actually operating the flight).(3)

For further information on this topic please contact Kathrin Vaupel at Arnecke Sibeth by telephone (+49 69 97 98 85 0) or email (k.vaupel@asd-law.com). The Arnecke Sibeth website can be accessed at www.asd-law.com.

Endnotes

(1) European Court of Justice Case 532/17.

(2) Federal Court of Justice, X ZR 102/16.

(3) Federal Court of Justice, X ZR 64/16.

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.