In a recently published judgment the Federal Court of Justice clarified the liability of airlines with respect to passenger rights and information obligations when a flight is operated under a wet lease.(1)

Facts

The plaintiffs claimed compensation from the defendant air carrier pursuant to Articles 5(1)(b) and 7(1)(b) of EU Regulation 261/2004 based on delay. They had booked a flight with the defendant airline from Dusseldorf to Nador (Morocco). The flight was operated under the defendant's International Air Transportation Association code, but with an aircraft including crew leased from a Spanish airline under a wet lease. The booking confirmation and the electronic ticket showed the defendant airline as the operating carrier. The flight arrived with a delay of more than seven hours.

The Dusseldorf Local Court and the Dusseldorf Regional Court dismissed the claim in the first and second instances, respectively. As the appeal court, the Dusseldorf Regional Court decided that the defendant airline was not liable for compensation. The technical and operative liability lay with the lessor, regarded as the operating air carrier under Article 2(b) of EU Regulation 261/2004.

Decision

The Federal Court of Justice set aside the Dusseldorf Regional Court's decision and granted compensation to the plaintiffs. Unlike the previous instances, the Federal Court of Justice deemed the defendant airline to be the operating air carrier under Article 2(b) of EU Regulation 261/2004.

According to Article 5(1)(c) of the regulation, passengers have the right to compensation by the operating air carrier. Further, Article 2(b) defines an 'operating air carrier' as an air carrier that performs or intends to perform a flight under a contract with a passenger or on behalf of another person, legal or natural, having a contract with that passenger. The Federal Court of Justice held that in case of a wet lease, the lessee must be regarded as the operating air carrier.

The Federal Court of Justice based its decision mainly on Recital 7 of EU Regulation 261/2004. According to Recital 7 of the German version of the regulation, the obligation rests with the operating air carrier which performs or intends to perform a flight, whether the aircraft is owned or leased and with or without a crew (or on any other basis).

For the Federal Court of Justice, these examples show that an airline may perform a flight without its own aircraft or crew and still be regarded as the operating air carrier under EU Regulation 261/2004. The court also referred to the Danish, English, French, Portuguese and Finnish versions of the regulation, which explicitly use the term 'wet lease' in Recital 7.

The Federal Court of Justice held that this understanding corresponds with the purpose of ensuring the effective application of EU Regulation 261/2004. As the responsibility for marketing and organising the flight lies with the lessee and generally requires a presence at the airport, the lessee must offer the services set out in Articles 8 and 9 of EU Regulation 261/2004.

According to the Federal Court of Justice, this interpretation may not be questioned by EU Regulation 2111/2005, under which the operating air carrier must be interpreted as being the airline actually performing a flight with an aircraft of its own. Therefore, in case of a wet lease, the obligation set out in Article 11(1) of EU Regulation 2111/2005 to inform passengers of the identity of the operating air carrier (ie, the lessor) lies with the lessee. The court justified this contrary interpretation with the different purpose of the regulations. EU Regulation 261/2004 must protect consumer rights, whereas EU Regulation 2111/2005 fulfils a security-related purpose.

For further information on this topic please contact Kathrin Lenz at Arnecke Sibeth by telephone (+49 69 97 98 85 0) or email (klenz@arneckesibeth.com). The Arnecke Sibeth website can be accessed at www.arneckesibeth.com.

Endnotes

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

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