On 10 June 2016, the Commission published its Interpretative Guidelines (Guidelines) on Regulation (EC) No 261/2004 with respect to compensation and assistance for denied boarding, cancellations and long delays for flights (Regulation 261) and on Regulations (EC) No 2027/97 and (EC) No 889/2002 on air carrier liability in the event of accidents. The Guidelines do not contain any new information as to the practical application of the Regulations, but bring together key EU case law that has shaped passenger rights since 2005. They will act as a stop-gap until they are superseded by the promised revision to Regulation 261. It is also important to note that the Guidelines are not a substitute for, and will not prejudice, the Court of Justice of the European Union’s (CJEU) own interpretation of the law.   

The Guidelines follow similar interpretative guidelines for the application of Regulation 1371/2007 on rail passengers’ rights, which were published on 3 July last year, and reinforce the Commission’s drive to make uniform and harmonise the interpretation and enforcement of EU law on passenger rights, as set out in its 2011 White Paper on Transport.

28 pages in length, the Guidelines focus particularly on:

  • the territorial and material scope of Regulation 261
  • events giving rise to passenger rights
  • extraordinary circumstances
  • the impact on multimodal journeys
  • complaints to national enforcement bodies (NEBs)
  • taking action under the Regulations
  • the interplay between Regulation 261 and the Montreal Convention 1999

The Guidelines’ approach to assessing compensation granted to passengers in third countries places the burden of evidence on air carriers to ensure that what is paid is equivalent to the entitlements under Regulation 261. It will reignite the debate about the divergent passenger rights regimes worldwide and a general failure to harmonise them properly.

The Commission’s ’aviation package’, launched in December 2015, outlines a strategy to make EU aviation competitive with the rest of the world, but this does not stop airlines and the International Air Transport Association (IATA) continuing to bemoan the draconian EU rules that are applied in what they perceive is a disproportionate manner in favour of championing consumer rights above all else. The Guidelines are unlikely to assuage their fears.

Another area of contention relates to extraordinary circumstances and the ever dwindling number of circumstances that will be deemed extraordinary and will enable carriers to claim a defence against paying compensation under Article 5(3) of Regulation 261. The Guidelines naturally do not give any concrete indication as to how the legal definition of extraordinary circumstances might one day be reviewed and applied under a recast air passenger rights regulation. It focuses instead on how current EU case law has interpreted technical defects (CJEU case C-257/14 van der Lans), damage caused by mobile boarding stairs (CJEU case C-394/14 Siewert) and the reasonable measures airlines should take in extraordinary circumstances The Guidance acknowledges that latent manufacturing defects, sabotage and terrorism and airport congestion due to bad weather conditions qualify as extraordinary circumstances.

The Commission supports the message given by NEBs, such as the UK CAA, that carriers should sign up to alternative dispute resolution (ADR) and reminds us that online dispute resolution (ODR) is available to consumers who have bought their tickets online. The UK CAA’s recently proposed move to charge airlines a flat £150 fee for involving its passenger advice and complaints team (PACT) from 1 June 2016 onwards appears to be an attempt to incentivise airlines to implement ADR. This is a move that has been greeted with consternation in some quarters especially since ADR is supposed to be voluntary for the aviation industry.

Unless the flight forms part of a package travel product, under which the Package Travel Directive(s) will apply, the Commission has made it clear that multimodal journeys involving more than one mode of transport under a single contract are not covered by Regulation 261. For example, if a passenger misses a flight as a result of a delayed train then it will only trigger right to compensation, if any, under Regulation 1371/2007. The Commission is keen to explore intermodal transport further so clarity about which rules apply when will perhaps be welcome for any eventual multimodal ticket suppliers.

The Guidelines also seek to clarify the recovery of remedies granted to passengers under Regulation 261 and the current Package Travel Directive (90/314/EEC) and take into account the pending revisions to the Package Travel Directive (2015/2302) which take full effect on 1 July 2018. Whilst it is clear that any qualifying rights to compensation or price reduction under the new Directive will not prevent passengers from also seeking remedy under Regulation 261, there can be no double compensation. However, the position remains grey insofar as who should bear the initial cost of these overlapping obligations. The Guidelines suggest that this will be resolved through sufficient contractual provisions between the package organiser and the operating carrier and the applicable national law, provided any such terms do not prejudice the passenger’s ability to notify their claim to either/or and recover a remedy which falls due.

The Guidelines are helpful in arranging the various strands of Regulation 261 and its associated case law into one place, but the industry will continue to hope for a swift conclusion to the proposed revision to the EU’s air passenger rights regime in order to provide everyone with much needed clarity following what has essentially become a complete revision of the current Regulation 261 as a result of European case law – all of which has a pattern of decisions against airline interests.