Europe says yes to cash for delays

Travellers reading these pages gleefully voted last week for the free money they thought should follow the ruling by the European Union’s highest court that airlines must pay passengers large amounts of compensation for long delays.

In fact, such a rule in Australia is unlikely as punctuality is one of the local airline business’s better distinguishing features, with more than 80% of flights arriving on time on average.

It helps that Australia doesn’t have the congested airways and the comparatively extreme weather of Europe and America – one of the major causes of flight delays.

Nevertheless, there has been a clear trend around the world towards greater consumer protection from airlines that suit themselves instead of their customers.

In the past few years, America has cracked down on flight delay rules, although it has pulled up short of mandatory financial compensation for passengers.

Instead it has made rules stopping airlines cooping up passengers in planes waiting to take off for hours on end.

There was a loud outcry from airlines when the US Department of Transportation (DOT) introduced rules mandating that airlines could not allow delays of more than three hours without taking the plane back to the terminal and disembarking passengers.

And, in the case of a long delay, airlines have to tell passengers at least once every 30 minutes that they are free to disembark if they’re still at the gate.

This is a nightmare scenario for the airline as well, as having passengers coming and going from the plane necessarily delays the departure when the plane is finally ready to go.

In fact, the new rules have led to a massive reduction in long delays as they have encouraged a greater effort by the airlines to ensure that long delays don’t become routine.

And when the rules are broken, the DOT is quite willing to act. In August, the DOT fined low-cost carrier JetBlue (one of America’s better airlines as rated by consumers) $US90,000 for failing to tell San Francisco-bound passengers delayed at New York’s John F. Kennedy airport that they were free to disembark.

In fact, JetBlue forked out only $20,000 after the DOT suspended half the fine as an incentive not to misbehave in future and deducted another $25,000 to cover compensation the airline had already made to passengers.

Meanwhile, the European Union Court of Justice has ruled that airlines must pay financial compensation if they are delayed more than four hours, reaffirming a right established three years ago in a case involving Air France.

Passengers on flights operated by EU airlines starting or ending in the EU are entitled to compensation of between €250 and €600  ($A315-$A764) for delays or cancellations under EU rules.

“The Court of Justice has confirmed its previous ruling that passengers whose flights have been delayed for a long time may be compensated,” the ECJ’s ruling said. It did not say what circumstances leading to a delay might be beyond an airine's control.

The European Consumer Organisation (BEUC) said the EU's executive arm should do more to reinforce passenger rights. “In the long run, the European Commission needs to set this and similar recent judgments in stone in its ongoing review of the regulation,” said BEUC Director General Monique Goyens, referring to the 2004 EU rules.

“Keyhole surgery is needed, not dramatic reform. The main challenge is enforcing what already exists. They also need to withstand what is quite robust industry pressure to dilute the law.”

However, it has become standard practice for airlines around the world to offer compensation. The effect of the ECJ rules is to increase costs for all airlines.

The continent’s biggest airline, Ryanair, last year threatened to introduce a compliance surcharge to protect itself from the high cost of doing business in Europe after the EU ruled it must pay for food and accommodation for passengers on flights cancelled during the volcanic ash cloud disruptions.

I don’t think the current Australian government will further antagonise the local airline industry after hitting tourism in the May budget with an increase in the Passenger Movement Charge from $47 to $55, which has had a measurable effect on the number of people coming to Australia, especially from New Zealand.

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