It is common to lament how airlines have been treated by governments, regulators and the courts, not least the Court of Justice of the EU. According to this view, airlines have become the cash cow of deficit ridden governments and the playthings of regulators and courts who have chosen to champion the consumer interest. So, we see the airlines and their customers portrayed as being in opposition to, rather than dependent on, each other, and there is a strong sense that what is good for the consumer must be bad for the airline and vice versa. We have previously argued that this is a false opposition that does not serve the airlines.
The recent success of Vueling Airlines in the Court of Justice, in a case involving one of its customers, raises the important question: what did the Court of Justice see in the airline’s case that it might not have seen in plenty of other cases? What can other airlines learn from this in deciding which cases to fight and how to fight them?
Our short answer is that the court appears to ask itself: how is the interest of the consumer best protected? That question has two implications: first, if there is a clash between two conceptions of the consumer interest, the court is likely to go with the interpretation that favours more consumers than fewer. Second, most of the arguments – including arguments about fundamental principles of EU law – may be essential or dispensable to the court’s reasoning, depending on how it defines that consumer interest. It follows that an airline should focus on defining the consumer interest when deciding which cases to fight and how it chooses to fight them.
Let us contrast the Vueling case with another recent case involving Germanwings.
In Vueling (Vueling Airlines SA v Instituto Galego de Consumo de la Xunta de Galicia, C-487/12), the court found that a national law purporting to require airlines to carry passenger checked-in baggage (within limits, e.g. regarding weight) without charging a supplement to the airfare was incompatible with EU law granting pricing freedom to airlines (Article 22 of Regulation (EC) No. 1008/2008). In so doing, the court recognised and supported the business model of low-cost carriers by which the cost of carrying checked-in baggage was unbundled from the basic airfare. In consequence, a consumer would not be able to claim compensation for having been charged a supplement for checked-in baggage.
While this appears to be a victory of the airline interest over the customer, the reasoning of the Court of Justice is quite different. The court recognised that business models had changed such that some carriers had unbundled baggage from the basic airfare. In practice – according to the court – checked-in baggage had become an optional supplement. The principle of equal treatment in EU law meant that you could not have a situation where one Member State prohibited the low-cost business model and others upheld it.
The court is really saying – in our view – that the broader consumer interest is in having a choice: booking with a carrier offering a bundled ticket price to include checked-in baggage or choosing a lower ticket price. That broader consumer interest trumps the preference of some consumers for a ticket including checked-in baggage, provided that the prices for such optional extras are set and communicated lawfully. This was a situation where innovation by airlines happened to coincide with extending and developing the consumer interest as the court saw it, so the court was happy to follow rather than contradict the evolution of the industry. It was convenient that the court could also cite Article 17 (2) of the Montréal Convention, which makes the air carrier liable for damage to checked-in baggage in certain circumstances, in contrast to unchecked baggage – to support the view that there are different costs involved in accepting checked-in baggage for which the airline is entitled to charge separately.
Now contrast this with a recent case involving Germanwings (Germanwings GmbH v Ronny Henning, Case C-452/13) concerning the right to compensation for a long delayed flight under EU 261. Here, the court found that the air carrier was liable to pay compensation to the passenger when the doors to the aircraft were opened on arrival more than three hours after the scheduled arrival. This was despite what the courts described as ‘a number of European Regulations and also certain International Air Transport Association (IATA) documents’ referring to the concept of actual arrival time as the time at which an aircraft reaches its parking position. In this case, such inconsistent documents were dispensable because they pursued objectives – air navigation and slot allocation – which were different from those pursued by EU 261.
Once again, the court’s conception of the consumer interest determined the outcome. In this case, the consumer interest was in not being confined in an enclosed space under the instructions and control of the air carrier for longer than they had agreed to be, on the basis of which the arrival time was to be understood as when the passenger was once again free to move, i.e. when at least one door of the aircraft was opened.
This view is open to criticism not least because the passenger had – arguably – agreed to be confined according to the schedule which gave an arrival time based on reaching the gate, rather than when an aircraft door was opened. In other words, industry practice here is to state arrival time when the actual time of disembarking the aircraft will commonly be a few minutes later. But the point is clear: in this case – in contrast to Vueling - the industry practice, as well as other industry rules, were dispensable in order to meet the court’s conception of the consumer interest.
We suggest, therefore, that this is the correct way to read the Court of Justice’s rulings in airline-passenger cases and should be the first factor when considering how to defend a claim.