Flight Compensation Regulation


The Flight Compensation Regulation is a regulation in EU law establishing common rules on compensation and assistance to passengers in the event of denied boarding, flight cancellations, or long delays of flights. It requires compensation of €250 to €600 depending on the flight distance for delays over of at least 2 hours, cancellations, or being denied boarding from overbooking. Delays shorter than two hours means no entitlement to any compensation of any kind even if the delay was classified as non-extraordinary. Airlines must provide refreshments and accommodation where appropriate. The Court of Justice of the European Union has interpreted passenger rights strictly, so that there are virtually no exceptions for airlines to evade their obligations for breach of contract.
It repealed Regulation No 295/91, and went into effect on 17 February 2005.

Applicability

The regulation applies to any passenger:
if that person has:
or
unless
It does not apply to helicopter flights, to any flight not operated by a fixed-wing aircraft, nor to flights from Gibraltar Airport.
While Switzerland and Norway are not members of the EU, the regulation does apply to it under bilateral agreements.

Denied boarding

Before denying passengers boarding involuntarily, the airline is required to first seek volunteers to give up their reservation in return for whatever benefit is negotiated between the airline and the volunteers. Irrespective of such negotiation, such volunteers are also entitled to reimbursement or rerouting.
If insufficient volunteers are obtained, the airline may then proceed to involuntarily deny passengers the right to board their flight. All passengers so denied must be offered all three types of compensation and assistance.

Cancellation

If a flight is cancelled, passengers are automatically entitled to their choice of
  1. re-routing to the same destination at the earliest opportunity ;
  2. later rerouting, at the passenger's convenience, to the same destination under comparable conditions ; or
  3. a refund of the ticket as well as a return flight to the point of first departure, when relevant.
Any ticket refund is the price paid for the flight not used, plus the cost of flights already flown in cases where the cancellation has made those flights of no purpose. Where applicable, passengers are also entitled to refreshments, communication and accommodation as described below. Where re-routing is to another airport serving the same destination, the airline must pay for onward transport to the original airport or to a close by destination agreed with the passenger. These choices, and the entitlement to refreshments, etc., apply to all cancellations, regardless of whether the circumstances are extraordinary or not.
It is unclear whether "the earliest opportunity" requires airlines to endorse a ticket onto another carrier.
The airline is also required to pay cash compensation as described below, unless one of the following conditions applies:
The airline must also provide an explanation to passengers of alternative transport.

Flight types

Compensation is specified at different thresholds:
  1. A flight of less than 1500 km in distance
  2. A flight within the EU of greater than 1500 km in distance, or any other flight of greater than 1500 km but less than 3500 km in distance
  3. A flight not within EU of greater than 3500 km in distance
with the great circle method being used to determine distance.
Note: In the rest of this article, we use type 1, 2, and 3 to refer to the above thresholds.

Delays

If an airline expects a flight to be delayed, passengers are entitled to refreshments and communication if the expected delay is more than:
Additionally, if the flight is expected to depart on the day after the original scheduled departure time, passengers are entitled to accommodation.
If a flight is delayed by five hours, passengers are additionally entitled to abandon their journey and receive a refund for all unused tickets, a refund on tickets used already if the flight no longer serves any purpose in relation to their original travel plan, and, if relevant, a flight back to their original point of departure at the earliest opportunity.
Finally, various court decisions have established that a passenger experiencing a loss of time equivalent to three hours or more at the final destination is entitled to compensation as though their flight had been cancelled.
Flight delay is based on the scheduled arrival time. This is defined as when the doors are opened on the plane and not when it lands.
In case of an arrival delay of more than 3 hours, passengers are entitled to cash compensation, unless the delay is caused by extraordinary circumstances.
In October 2017, an EU Court of Appeal confirmed the UK CAA's interpretation that the final destination must be included in the total delay. This means that, if the passenger misses a connection outside the EU and ends up with a delay longer than the times indicated above, even if the delay on the flight leaving the EU was inferior to the aforementioned times, the total delay will be used and not only the delay on leaving the EU.

Compensation and assistance

There are three broad categories where airlines may be required to make payments or otherwise assist passengers, in cases of delays, flight changes/cancellations or denied boarding.

Cash compensation

Cash compensation for cancellation is a payment of:
  1. €250, in the case of a type 1 flight
  2. €400, in the case of a type 2 flight
  3. €600, in the case of a type 3 flight
Where a passenger has been rerouted due to cancellation or denied boarding, the above amounts are payable if the passenger's actual arrival time is delayed beyond the scheduled arrival of their originally booked flights, by two/three/four hours for type 1/2/3 flights respectively. But if rerouting only delays the passenger by less than these thresholds, half of the specified amounts are payable as compensation.
Payments are strictly compensation for customers' inconvenience and do not replace or form a part of any potential reimbursements for unused tickets, trips in vain, additional transport costs, meals and accommodation.
Airlines are not obliged to provide cash compensation in the case of extraordinary circumstances which could not have been avoided even if the airline took all reasonable precautions, according to Article 5, Paragraph 3.

Rerouting or refunding

Rerouting or refunding is, at the passenger's choice, one of the following three reimbursements:
  1. Repayment of the cost of unused flight tickets, and for used tickets where the flight taken no longer serve any purpose in relation to the passenger's original travel plan, and where applicable, a flight back to the original point of departure at the earliest opportunity
  2. Rerouting under similar conditions to the intended final destination at the earliest opportunity
  3. Rerouting under similar conditions to the intended final destination at the passenger's leisure, subject to the availability of seats.
If a passenger's destination is an airport at a city with multiple airports and rerouting results in the passenger being taken to another of those airports, the airline must also pay for transport for the passenger to the original intended airport or an agreed nearby destination.

Refreshments, communication and accommodation

When passengers become entitled to assistance, they must be offered, free of charge,
In the case of a delay, the airline may withdraw or abrogate these entitlements if offering them would delay the flight further.

Upgrades and downgrades

If a passenger is placed in a higher class than that for which a ticket was purchased, the airline may not request any additional payment.
If a passenger is placed in a lower class than that for which a ticket was purchased, the airline must refund 30/50/75% of the cost of the ticket for type 1/2/3 flights. For the purpose of this condition, flights to the French overseas departments are not considered to be within the European Union. It is unclear whether the refund relates to the price of the entire ticket, or the segment on which the passenger was downgraded.

Method of refund

Refunds and compensations payable under this regulation may be paid in cash, by electronic bank transfer, bank draft, or cheque. With the signed agreement of a passenger, they may also be paid in travel vouchers or other services.

Obligation to notify passengers

Airlines are obliged to display a notice at their check-in counters stating:
Additionally, when an airline cancels a flight, denies a person boarding, or incurs a delay exceeding two hours to a flight, it is obliged to provide each passenger affected with a written notice setting out their rights under the regulation, and the contact details of the national body tasked with enforcing the regulation.

Relevant court cases

In the case Wallentin-Hermann v Alitalia—Linee Aeree Italiane SpA of 22 December 2008, the European Court of Justice in Luxembourg ruled on the interpretation of Article 5 of the regulation relating to cancellations, specifically paragraph 3 which states:
The Court agreed with Wallentin-Hermann that any technical issues during aircraft maintenance don't constitute "extraordinary circumstances" that would allow airlines to avoid paying passengers compensation for canceled flights.
This case therefore closed the loophole which had allowed the airlines to abuse passengers by frivolous interpretation of "technical or extraordinary circumstances"; it further defined the phrase and limited its exploitation. The definition of "technical and/or extraordinary circumstances" by the Court now stands firm and solid: any carrier must prove that the alleged mechanical problem leading to the cancellation was "beyond its actual control", the court affirmed in a statement. In its judgment, the Fourth Chamber of the Court of Justice held:
However, what actually lies within the concept of defining what is inside or outside of the "actual control of the air carrier" is not clear and is subject to litigation in many EU-states.
Furthermore, in the joined cases of Sturgeon v Condor, and Bock v Air France, the Fourth Chamber of the European Court of Justice held on 19 November 2009 that despite no express provision in the Regulation to compensate passengers for delay, passengers are now entitled to the compensation as set out in Article 7 for any delay in excess of three hours providing the air carrier cannot raise a defence of "extraordinary circumstances".

"Articles 5, 6 and 7 of Regulation EC 261/2004 must be interpreted as meaning that passengers whose flights are delayed may be treated, for the purposes of the application of the right to compensation, as passengers whose flights are cancelled and they may thus rely on the right to compensation laid down in Article 7 of the regulation where they suffer, on account of a flight delay, a loss of time equal to or in excess of three hours, that is, where they reach their final destination three hours or more after the arrival time originally scheduled by the air carrier."

The fourth Chamber also ruled that under the definition of "extraordinary circumstances", technical faults within an aircraft should not be included and therefore an air carrier cannot rely on a technical fault within an aircraft as a defence from a valid claim under the Regulation, "unless that problem stems from events which, by their nature or origin, are not inherent in the normal exercise of the activity of the air carrier concerned and are beyond its actual control". Various passenger rights groups reported the case and encouraged passengers to bring claims against airlines in the event of a delay of over three hours.
The Sturgeon ruling was reconfirmed in a ruling of the European Court of Justice on 23 October 2012 in Nelson v Deutsche Lufthansa AG and R v Civil Aviation Authority.
In the case of Denise McDonagh v Ryanair Ltd, the Third Chamber of the European Court of Justice ruled that natural disasters such as the eruption of the Icelandic volcano Eyjafjallajökull and the subsequent cloud of volcanic ash in 2010, which shut down most European air traffic, do constitute "extraordinary circumstances" that release air carriers from the obligation to pay compensation, but that there is no such category as "super-extraordinary circumstances" that would release them from the obligation to provide care. According to the court's ruling, air carriers continued to have an obligation of care towards passengers under Art. 5 and 8 of the regulation during the week-long shutdown of European airspace, and this obligation does not have a temporal or monetary limit.
In the case of Jet2 vs. Huzar, the English Court of Appeal ruled on 11 June 2014 that "ordinary technical problems that cause flight disruption, such as component failure and general wear and tear, should not be considered “extraordinary circumstances”". Therefore, general technical faults found during routine maintenance checks before departure will generally not be considered "extraordinary circumstances". Jet2 subsequently confirmed it planned on seeking permission to appeal to the Supreme Court.
On 4 September 2014, in the case of Germanwings GmbH v. Ronny Henning, the Ninth Chamber of the European Court of Justice ruled that
Germanwings initially refused to pay the passenger compensation, arguing the delay was 2 hours and 58 minutes when the plane touched the ground.
In September 2015, the Court of Justice of the European Union judged, regarding Case C-257/14:
affecting the safety of flights or acts of sabotage or terrorism may exempt air carriers from their
obligation to pay compensation.

Intermediaries

The general difficulties claiming from airlines directly has led to the rise of online intermediaries that operate on a "no-win, no fee" basis contingency fee. All help filing claims against airlines, including going to court if necessary.
In response, airlines have repeatedly criticised such intermediaries for forcing more costs on the airline industry, which then passes extra costs on to passengers in the form of increased ticket prices. For example, in response to the added pressure caused by the increase in EU 261 claims in recent years, in 2011 Ryanair put in place a €2.00 surcharge per ticket to compensate for its additional costs. In 2013 it then increased this levy to €2.50.

Brexit and British Consumers

The UK Government has said it will convert directly-applicable EU laws into UK law in its Great Repeal Bill White Paper. This means on the face of it that EU261 will be ported over to UK law and nothing will change should the UK leave the EU. However, the Repeal Bill does state that the regulation will continue to apply ‘until legislators in the UK decide otherwise’. This could mean the government decide to drop the regulation from UK law at a later date.

More pertinently, if the UK does indeed leave the EU then air passengers will get less protection even if the regulation is enshrined in UK law. This is due to the regulation only covering any flight departing the EU or any flight arriving into the EU on an EU carrier. If the UK is no longer part of the EU then any flight departing the UK arriving outside of the EU would cease to be covered. Passengers would only be protected by the legislation if they depart the UK and arrive in the EU on an EU carrier.

Future developments

The European Commission has proposed a number of revisions to the regulation, which have not yet been adopted as of 2019: