Introduction

On July 6 2017 the European Court of Justice (ECJ) ruled on the interpretation of Articles 22 and 23 of EU Regulation 1008/2008 in relation to:

  • the extent to which air carriers can publish air fares without specifying the amount of additional fees (eg, taxes and airport charges) included in the final price; and
  • whether Article 22 precludes national legislation that invalidates the general terms and conditions under which additional flat-rate charges for no-show passengers are implemented.(1)

Facts

The plaintiff, a private German association for the advancement of consumer rights, simulated various booking processes on the website of the defendant, a German air carrier.

The defendant's website depicted a table of items in relation to flights being booked and the corresponding prices for customers. The plaintiff claimed that in various cases the booking system displayed under the header "Taxes and charges" a range which was far lower than that payable in practice.

The plaintiff brought an action before the Berlin Regional Court, claiming violation of Article 23(1) of EU Regulation 1008/2008 which states:

"[In] addition to the indication of the final price, at least the following shall be specified: (a) air fare or air rate; (b) taxes; (c) airport charges; and (d) other charges, surcharges or fees, such as those related to security and fuel; where the items listed… have been added to the air fare or fee."

In addition, the plaintiff disputed the legality of part of the general terms and conditions in use by the defendant, under which passengers who cancelled their flights had to bear an additional €25 fee that reduced their refund claim.

The consumer association claimed that this violated Section 307 of the Civil Code, which – implementing Articles 3(1) and (2) of Council Directive 92/13/EEC – invalidates general terms and conditions that unduly disadvantage one party of a contract.

The regional court upheld the application. Following the dismissal of the appeal brought by the carrier before the Berlin Upper Regional Court, the airline lodged a remedy of review before the Federal Court of Justice, which stayed the proceedings and referred the case to the ECJ for a preliminary ruling.

Decision

Regarding the first question, the ECJ held that when publishing air fares "air carriers must specify separately the amounts payable by customers in respect of taxes, airport charges and other charges… and may not, as a consequence, include those items, even partially, in the air fare".

The court established that "where the items listed… have been added" (Article 23(1)) did not mean that it is left to the airline's discretion which parts of the total fare are to be specified and which parts could, under omission of explicit specification, be included in the total fare. The phrase is therefore intended to liberate air carriers which choose to bear the costs themselves from the obligation to specify the corresponding items.

Unsurprisingly, the court reached this conclusion pursuant to Article 23(1) Sentence 3 of EU Regulation 1008/2008, which is intended to bring transparency for consumers who, by themselves, cannot distinguish the different amounts that comprise the total fare.

Regarding the second question, the ECJ determined that EU Regulation 1008/2008 does not preclude the application of any consumer protection rule implemented by an EU member state. The regulation, being "the culmination of progressive elimination of price controls by Member States", is not intended to limit the applicability of consumer rights under national law implementing EU legislation.

Comment

The decision maintains the court's consumer-friendly interpretation of EU legislation on the rights of passengers through the entire process – from booking a flight to arriving at a destination.

The judgment is in line with previous ECJ decisions in ebookers.com Deutschland GmbH v Bundesverband der Verbraucherzentralen und Verbraucherverbände – Verbraucherzentrale Bundesverband eV (C-112/11) and Vueling Airlines SA v Instituto Galego de Consumo de la Xunta de Galicia (C-487/12).

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.

For further information on this topic please contact Ulrich Steppler or Katja Helen Brecke at Arnecke Sibeth by telephone (+49 69 97 98 85 0) or email (usteppler@arneckesibeth.com or kbrecke@arneckesibeth.com). The Arnecke Sibeth website can be accessed at www.arneckesibeth.com.

Endnotes

(1) Air Berlin plc v Bundesverband der Verbraucherzentralen und Verbraucherverbände – Verbraucherzentrale Bundesverband eV (C 290/16).