Introduction

The Eyjafjallajökull eruption in Iceland and the resulting cloud of volcanic ash has caused the unprecedented unavailability of European airspace and the worst air traffic chaos since the September 11th attacks on the USA. At the time of writing, Eurocontrol reports that the (rapidly changing) situation affects airspace in Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Hungary, Ireland, northern Italy, Luxembourg, the Netherlands, Poland, Romania, Slovakia, parts of Sweden, Switzerland, Ukraine, and the United Kingdom. With IATA estimating the cost at in excess of US$200m per day in lost revenues, airlines will want to limit their exposure to passenger and cargo claims …

EC Regulation 261/2004

As most carriers will be aware, EC regulation 261/2004 provides rules on compensating and assisting passengers in circumstances of delay, denied boarding or flight cancellation. The Regulation applies to all flights (including non-scheduled flights) operated by EU carriers, whether flying to or departing from an EU airport and to flights operated by non EU carriers departing from an EU airport. The Regulation only applies to “operating carriers” (i.e. those carriers who perform or intend to perform a flight) and relates only to passengers, not to cargo.

Where a flight is cancelled, the Regulation requires that passengers are offered:

a.ticket reimbursement or re-routing;

b.care and assistance; and

c.compensation, calculated by reference to the flight distance (up to Euro 600).

However, where a flight is only heavily delayed or the cancellation is necessitated by “extraordinary circumstances”, the passenger may not claim the additional compensation, but they are still entitled to reimbursement and/or re-routing as well as to care and assistance (which may include hotel accommodation), even where the cost of these exceeds the price of the passenger’s ticket.

As expected, the EU Transport Commissioner, Siim Kallas, stated in a press release (memo 10/131) that this “can be considered a very exceptional circumstance” …“Nevertheless, it is important to remind passengers and airlines that EU passenger rights do apply in this situation”. Those rights may be summarised as follows:

Right to Reimbursement or Re-routing (Article 8)

Passengers should be offered the option of either:

Reimbursement

  • paid within 7 days;
  • for the full cost of the ticket purchase price;
  • for the part(s) for the journey not made (or for the parts already made if the flight no longer serves any purpose in relation to the passenger’s original travel plan); and
  • when relevant, a return flight to the first point of departure, at the earliest opportunity.

or

Re-Routing

  • under comparable transport conditions;
  • to the passenger’s final destination, either:

a.at the earliest opportunity; or

b.at a later date at the passenger’s convenience, subject to the availability of seats.

The European Commission’s Information Document on Regulation 261/2004 confirms that in cases of re-routing, flights need not be operated by the air carrier the passenger booked with and that indeed, re-routing need not be by air - alternative transport “such as train, taxi or bus” can be proposed “if the distance to be covered is appropriate for such transport modes”. The guidance also states that where a passenger is offered a re-routing at the earliest opportunity but chooses to travel at a later date, the carrier is not obliged to provide ongoing assistance to them.

Right to Care and Assistance (Article 9)

Passengers must be offered:

  • meals and refreshments in reasonable relation to their waiting time;
  • hotel accommodation, in cases where an overnight stay(s) is necessary;
  • transport between the airport and place of accommodation; and
  • two free phone calls, telexes, faxes or emails.

Carriers should prioritise those passengers with children and/or reduced mobility and have a positive obligation under the Regulation to inform passengers of their rights.

Montreal Convention 1999

Many carriers may face claims from cargo consignors/consignees and/or from passengers which are not covered by Regulation 261/2004, such as those flying to the EU on a non-EU carrier. These claims will most likely be brought under Article 19 of the Montreal Convention, which provides that the carrier “is liable for damage occasioned by delay in the carriage of passengers, baggage or cargo”. The Convention applies to contracting as well as actual (i.e. operating) carriers.

However, liability may be excluded if the carrier “proves that it and its servants and agents took all measures that could reasonably be required to avoid the damage or that it was impossible for it or them to take such measures”. Given the unavailability of European airspace through the withdrawal of air traffic control services, carriers should easily be able to defend such claims on the grounds that in these circumstances, it was impossible for them to avoid the delays.

What Can Air Carriers Do?

Carriers should have no liability for delay claims under the Montreal Convention and whilst they will have obligations to their passengers under EC Regulation 261/2004, they should be able to minimise their exposures, by implementing the following measures:

  • advise all passengers to remain at home until it has been confirmed that not only is the affected airspace re-opened, but there is an available seat on a flight - in the first few days following the re-opening of the affected airspace, seats will not be available for all those affected by the crisis;
  • prioritise those passengers with children and those with reduced mobility;
  • wherever possible, consider prioritising the repatriation of holiday and business travellers, in order to avoid ongoing hotel accommodation and care requirements;
  • from a practical perspective, arranging group transportation and group accommodation at acceptable rates would be a prudent measure to avoid passengers making their own (potentially expensive) bookings, for which passengers may later seek reimbursement from the carrier.