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Consumer protection and liability

Airfares

Are airfares regulated in your jurisdiction?

Article 22 of EU Regulation 1008/2008 states that air carriers are free to set air fares.

Passenger protection

What rules and liabilities are air carriers subject to in respect of:

(a) Flight delays and cancellations?

EU Regulation 261/2004 governs transport services of air carriers departing from an airport located in the territory of an EU member state. The regulation also applies to air carriers with a valid operating licence granted by an EU member state departing from a non-EU airport and arriving at an EU airport, unless passengers have already received benefits in that third country. The regulation establishes common rules on compensation and assistance to passengers in the event of denied boarding or the cancellation or long delay of flights.

Flight cancellation In case of flight cancellation, Article 5 of the regulation applies, under which the operating air carrier must offer the passenger concerned a choice between:

  • reimbursement of the full cost of the ticket within seven days together with (when relevant) a return flight to the first point of departure; or
  • re-routing to his or her final destination.

Additionally, passengers have the right to care (eg free meals and refreshments, as well as facilities to contact people via telephone or email).  

The right to care includes hotel accommodation free of charge and transport between the airport and place of accommodation where the passenger chooses to re-route and an unscheduled stay of one or more nights becomes necessary.

Further, operating air carriers have to pay compensation between €250 and €600 to each passenger depending on the flight distance (Article 7 of EU Regulation 261/2004), unless they can prove that the cancellation was caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken. It is settled case law that in this context the term ‘extraordinary circumstances’ refers to an event which is not inherent in the normal exercise of an air carrier’s activity (Wallentin-Hermann v Alitalia (2008) CJEU, Case C-549/07). A common technical problem does not constitute an extraordinary circumstance, even if it occurs unexpectedly (van der Lans v KLM (2015) CJEU, Case C-257/14).

Passengers are not entitled to compensation payment if they are informed of the cancellation at least two weeks before the scheduled time of departure.

Long delay In the event of long delay, Article 6 of EU Regulation 261/2004 applies. Concerned passengers are entitled to compensation payments and have the right to care. Both claims depend on the distance of the cancelled flight in conjunction with the length of the delay.

Compensation payments range from €250 to €600. If departure is delayed by at least five hours, passengers are also entitled to request:

  • reimbursement of the full ticket cost within seven days; and
  • a return flight to the first point of departure when relevant.

The arrival time, which is used to determine the length of the delay, is the time at which at least one of the doors of the aircraft is opened (Germanwings GmbH v Henning (2014) CJEU, Case C-452/13).

The passengers’ right to free meals and refreshments, as well as facilities to contact people via telephone or email, depends on the distance of the cancelled flight in conjunction with the length of the delay.

(b) Oversold flights?

In case of an oversold flight, Article 4 of EU Regulation 261/2004 applies.

First, the operating air carrier will call for volunteers to give up their seats in exchange for benefits under conditions to be agreed between the passenger concerned and the operating air carrier.

Second, if there is an insufficient number of volunteers, passengers will be involuntarily denied boarding. These passengers have the right to compensation of between €250 and €600 depending on the flight distance (Article 7 of EU Regulation 261/2004). Further, they can choose between reimbursement and re-routing, and have the right to care (eg free meals and refreshments, hotel accommodation and telephone calls).

(c) Denied boarding?

In case of denied boarding, Article 4 of EU Regulation 261/2004 applies.

Denied boarding can be caused by an overbooked flight or any other circumstances in which passengers are refused carriage despite presenting themselves in time for boarding while holding a confirmed reservation.

First, the operating air carrier will call for volunteers to give up their seats in exchange for benefits under conditions to be agreed between the passenger concerned and the operating air carrier.

Second, if there is an insufficient number of volunteers, passengers will be involuntarily denied boarding. These passengers have the right to compensation of between €250 and €600 depending on the flight distance (Article 7 of the regulation). Further, they can choose between reimbursement and re-routing, and have the right to care (eg free meals and refreshments, hotel accommodation and telephone calls).

Where extraordinary circumstances (eg a strike) have caused passengers to be involuntarily denied boarding, the air carrier must still provide compensation (Finnair Oyj v Lassooy (2012) CJEU, Case C-22/11).

However, Article 4 of EU Regulation 261/2004 does not apply if operating air carriers deny boarding because of reasonable grounds such as health, safety or security, or due to inadequate travel documentation.

(d) Access for disabled passengers?

The transport of disabled persons and persons with reduced mobility is governed by EU Regulation 1107/2006. This regulation applies to disabled passengers using air services on departure from, on transit through or on arrival at an EU airport. Some articles also apply to passengers departing from a non-EU airport and arriving at an EU airport if they use the service of an air carrier with a valid operating licence granted by an EU member state.

The regulation aims to protect these passengers against discrimination and to ensure that they receive assistance.

Disabled persons and persons with reduced mobility cannot be denied boarding on the grounds of their disability or lack of mobility, unless there are security concerns or the aircraft is too small.

Article 12 of EU Regulation 261/2004 states that operating air carriers must give priority to carrying persons with reduced mobility and any persons or certified service dogs accompanying them.

(e) Lost, damaged or destroyed luggage?

The Montreal Convention (which replaced the Warsaw Convention) and EU Regulation 889/2002 apply to lost, damaged or destroyed luggage.  

The air carrier is responsible for such luggage if the damage-causing event occurred on board the aircraft or while the checked baggage was in charge of the carrier.

If the baggage is lost, damaged or destroyed, the passenger must notify the air carrier as soon as possible but no later than seven days from the date on which it was placed at the passengers’ disposal.

The air carrier is liable for destruction, loss or damage to baggage of up to 1,131 special drawing rights. In case of checked baggage, the air carrier is liable even if not at fault, unless the baggage was already defective. In case of unchecked baggage, the carrier is liable only if at fault.

(f) Retention and protection of passenger data?

The Protection of Personal Data Act (DSG 2000) applies to the retention and protection of passenger data. This act will be amended once the EU General Data Protection Regulation (2016/679) comes into effect on May 25, 2018.

The United States and Canada require by law that Austrian air carriers pass on passengers’ personal data from their reservations systems to the responsible government authority on the basis of agreements between the European Union and the Canadian and US governments.

Cargo

What rules and liabilities apply to the air carriage of cargo?

The Montreal Convention applies to the air carriage of cargo.

The air carrier must deliver an air waybill to the passenger.

In general, the air carrier is liable for damage resulting from lost, damaged or destroyed cargo if the damage-causing event occurred during carriage by air. However, the carrier is not liable if and to the extent that it proves the loss of or damage to the cargo resulted from one or more of the following:

  • an inherent defect, quality or vice of the cargo;
  • defective packing of the cargo performed by a person other than the carrier or its agents;
  • an act of war or an armed conflict; or
  • an act of public authority carried out in connection with the entry, exit or transit of the cargo.

Marketing and advertising

Do any special rules apply to the marketing and advertising of aviation services?

The Unfair Competition Act and the Price Marking Act apply to the marketing and advertising of aviation services.

In addition, Article 23 of EU Regulation 1008/2008 states that the final price to be paid by the customer for air services must include the applicable air fare or air rate, as well as all applicable taxes, charges, surcharges and fees which are unavoidable and foreseeable at the time of publication. This requirement enables customers to compare the price of air services by different air carriers.

Complaints handling

Do any special rules apply to consumer complaints handling in the aviation industry?

Customers who fail to resolve disputes directly with the air carrier can take their matter to the Agency for Passenger Rights (APF), the statutory arbitration body for air transport under Article 16 of EU Regulation 261/2004. The APF handles consumer complaints free of charge. However, it is not required to take enforcement action against air carriers with a view to compelling them to pay compensation (K Ruijssenaars v Staatssecretaris van Infrastructuur en Milieu (2016) CJEU, Case C-145/15).

If both parties agree to the APF's proposed solution, they effectively accept it as an out-of-court solution. Otherwise, the proposed solution is not considered binding.

Customers are not obliged to address their matter to the APF. Rather, claims can also be directly asserted before the court.

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