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Newsletter May 2012: Newsletter FLO – Aviation

Arthur Flieger, Attorney at law Flieger Law Office bvba
With the cooperation of Stijn Brusseleers, Attorney at law Flieger Law office bvba

VOLCANIC ERUPTION – OPINION OF THE ADVOCATE GENERAL IN THE CASE McDONAGH V RYANAIR LTD –
AND SOME THOUGHTS ABOUT STATE LIABILITY NOT INCLUDED IN THE EU REGULATION: A DUTY OF THE STATES

A. Introduction

At the end of 2009 seismic activity in the Eyjafjallajökull, Iceland commenced, resulting with the volcanic eruption started on March 20th, 2010.

On April 14th, 2010, the volcano entered an explosion phase which resulted on April 15th, 2010 in the closure of the airspace of several member states.

The unique damaging effect of this eruption was that the volcano was covered with a large mass of ice that melted spontaneously, transforming the lava and ice into aerosol form, which stayed airborne for days and travelled long distances. This in turn caused much of the airspace over European States to be closed for a week from April 15th, 2010.

The problem was unprecedented as, unlike in earlier volcanic eruptions elsewhere, this eruption affected airspace over some European States, which is usually congested.

The closure of that airspace resulted in the cancellation of more than 100.000 flights, and approximately 10 million passengers were unable to travel during that period.

Ryanair cancelled around 9500 flights because of the volcanic ash cloud causing disruption to the travel plans of 1.4 million of its passengers.

In the preliminary ruling from the Dublin Metropolitan District Court ( Ireland ) it occurs that the referring court states that Ryanair was willing to provide services to its passengers but it was not permitted to do so owing to the closure of air space.

The Commission for Aviation Regulation in Ireland stated that the eruption and the resulting airspace closures constituted extraordinary circumstances in the sense of Regulation 261/2004. In its view pursuant to Article 5 ( 3 ) of Regulation 261/2004 passengers whose flights had been cancelled had no basis for seeking compensation under article 7 of the Regulation ( compensation ).

The plaintiff in this matter, Ms McDonagh, purchased a ticket for a Ryanair flight from Faro to Dublin on April 17th, 2010. Since the airspace was closed on said date, Ryanair did not provide Ms McDonagh with care in accordance with section 9 of Regulation 261/2004. According to the plaintiff, Ryanair is required to pay her compensation or damages, corresponding to the costs which she incurred for meals, refreshments, accommodation and transport. She claimed an amount of € 1.129,41.

B. The legal status questions:
The Dublin Metropolitan District Court has doubts as to the interpretation to be given to articles 5 and 9 of Regulation 261/2004, and more in particular as to the validity of those provisions.

Following questions are referred to the European Court:
1) Do circumstances such as the closure of the European airspace resulting from the volcanic eruption in Iceland, which caused widespread and prolonged disruption to air travel, go beyond “extraordinary circumstances” in the sense of Regulation 261/2004.
2) If the answer is affirmative, is the liability for the duty to provide care excluded under Articles 5 and 9 of Regulation 261/2004?
3) If the answer is negative to question 2, are articles 5 and 9 of Regulation 261/2004 invalid in so far as they violate the principles of proportionality and non-discrimination, the principle of an equitable balance of interests enshrined in the Montreal Convention, and articles 16 and 17 of the Charter?
4) Is the obligation in articles 5 and 9 of Regulation 261/2004 to be interpreted as containing an implied limitation, such as a temporal and/or monetary limit, to provide care in cases where cancellation is caused by extraordinary circumstances?

C. The analysis of the Advocate General

C.1.
The Advocate General concludes that by the two first questions the Dublin Metropolitan District Court asks whether articles 5 and 9 of Regulation 261/2004 must be interpreted as meaning that circumstances such as the closure of airspace due to the eruption of the volcano go beyond “extraordinary circumstances”, releasing the operating air carrier from its obligation to provide care for passengers whose flight has been cancelled because of that closure.

Thus one needs to verify if such closure constitutes circumstances which go beyond “extraordinary circumstances”, but nevertheless do not release the air carrier from its obligation to provide care for passengers whose flight has been cancelled.

Subsequently the referring Court wants to know if the obligation laid down in articles 5 and 9 of Regulation 261/2004 is innately tempered by an implied limitation – such as a temporal and/or monetary limit – on the provision of care to passengers whose flights have been cancelled, where the cancellation is caused by extraordinary circumstances.

If such is not the case the Dublin Metropolitan District Court asks whether the provisions 5 and 9 of Regulation 261/2004 are invalid in so far they are contrary to the principles of:
– proportionality;
– non-discrimination;
– an equitable balance as enshrined in the Montreal Convention and articles 16 and 17 of the Charter.

C.2.
In the Advocate General’s view the notion of extraordinary circumstances also encompasses all exceptional events, such as the closure of airspace owing to the eruption of a volcano, which could not have been avoided even if all reasonable measures had been taken.

As such the notion has not been defined in the Regulation 261/2004 itself.

As the Court has consistently held, the meaning and scope of terms for which EU law provides no definition, must be determined in accordance with their usual meaning in everyday language. In everyday language, the term “extraordinary” is defined as something which is out of the usual course of order. In the Advocate General’s mind the choice of that term clearly shows that the EU legislator intended the notion of “extraordinary circumstances” to embrace all circumstances over which the air carrier has no control.

See as well the Wallentin-Hermann case in which the Court ruled that extraordinary circumstances for the purposes of Regulation 261/2004 relate to an event which is not inherent in the normal exercise of the activity of the air carrier concerned and is beyond the actual control of that carrier on account of its nature or origin.

The Advocate General considers that there is no room for a category of events which go beyond extraordinary circumstances as suggested by Ryanair. An event such as the eruption of the volcano certainly constitutes an example of “extraordinary circumstances” for the purposes of Regulation 261/2004 triggering for the air carrier the attendant obligation of providing care for passengers whose flights have been cancelled owing to that eruption.

The clear wording of Articles 5 and 9 of Regulation 261/2004 means that it is not possible, without adding to the text, to create a separate category of particularly extraordinary events which would fully release the air carrier from its obligations.

In the frame of the Regulation 261/2004 recitals 1 to 4 and in line with the Sturgeon and Others case the regulation seeks to ensure a high level of protection for air passengers regardless of whether they are denied boarding or whether their flight is cancelled or delayed, since they are all caused similar serious trouble and inconvenience connected with air transport.

There is therefore an obligation on the air carrier in providing care for passengers whose flights have been cancelled by supplying them with refreshments, meals or accommodation or making available to them means of communication with third parties, so that their immediate needs on the spot are catered for, whatever the cause of the flight’s cancellation may be, and to enhance the protection afforded to passengers’ interests.

Consequently the assistance is even more vital where the passengers are stranded at an airport on account of extraordinary circumstances.

The EU legislature took this view, according to the Advocate General’s point of view, by contrast with the obligation for the air carrier to pay compensation, which does not apply where the air carrier proves that the cancellation of the flight was the result of extraordinary circumstances which could not have been avoided, the obligation to provide care must remain compelling, whatever the event which resulted in the cancellation and whether or not the air carrier was responsible for that event.

Therefore the Advocate General concludes that Articles 5 and 9 of Regulation 261/2004 must be interpreted as meaning that circumstances such as a closure of airspace owing to the eruption of a volcano constitute extraordinary circumstances for the purposes of the Regulation.

C.3.
The following question which needs to be answered is to know if the obligation under Articles 5 and 9 of Regulation 261/2004 to provide care must be limited in temporal or monetary terms, where the cancellation of the flight has been caused by extraordinary circumstances.

Ryanair contents that the obligation on the air carrier to provide care must be limited where the cancellation is caused by extraordinary circumstances. Ryanair argues that accommodation should be limited to a fixed daily amount, namely € 80,00 per night, for a maximum of three nights. Similarly, Ryanair argues that there should be a temporal and monetary limit on the provision of meals and refreshments and that cover of the costs of transport between the airport and the place of accommodation should be limited to the cost of a journey by public transport.

There is in the view of the Advocate General no question of temporal or monetary limits being placed on the provision of care since this provision is particularly important in the case of extraordinary circumstances which persist over a long time. In those situations it’s necessary to insure that an air passenger whose flight has been cancelled can have access to essential goods and services throughout that period. The Advocate General considers that one cannot abandon the passengers to their fate once a certain term has been past, and such would deprive articles 5 and 9 of Regulation 261/2004 of their effectiveness.

In this light articles 5 and 9 of the Regulation 261/2004 do not infringe the principle of proportionality.

Ryanair contends that the obligation to provide care for passengers, where the cancellation of a flight is caused by extraordinary circumstances, is contrary to the principle enshrined in the third and fifth paragraphs of the preamble to the Montreal Convention, that state that compensation for consumers must be based on an equitable balance of interests.

In this respect one needs to refer to the Court’s ruling in IATA and ELFAA, where the assistance and taking care of passengers envisaged by article 6 of Regulation 261/2004, which makes a renvoi to Article 9 of same Regulation, in the event of a long delay to a flight, constitute standardised and immediate compensatory measures, notwithstanding the fact that they are not regulated by the Montreal Convention.

However in the Walz case the Court stated that in the various situations in which an air carrier is held liable, the equitable balance of interests requires that there be limits on compensation so as not to impose a very heavy burden of damages, which would be difficult to determine and to calculate, and would be liable to undermine, and even paralyse the economic activity of that carrier. This case however did not turn on the obligation to provide care for passengers, but their right, pursuant to Chapter III of the Montreal Convention, to obtain individual reparation in the event of damage sustained (see paragraph 17 of IATA and ELFAA case ). The legal context of that decision is different than the case under consideration right now.

Therefore the Advocate General considers that Articles 5 and 9 of Regulation 261/2004 are not contrary to the principle enshrined in the Montreal Convention of an equitable balance of interests.

The last question which needs to be answered is if one can impose an obligation to provide care for passengers which is not imposed on operators of other modes of transport. Here the general principle of non-discrimination is involved. The Court said in the past that different modes of transport are not interchangeable as regards conditions of use ( IATA and ELFAA, paragraph 96).

With regard to air transport, passengers whose flights are cancelled or significantly delayed are in a situation which is objectively different from the situation of passengers using other means of transport in the event of incidents of same nature. The Court concluded in the past that Articles 5 to 7 of Regulation 261/2004 are not invalid by reason of a breach of the principle of equal treatment ( IATA and ELFAA, paragraph 99).

Then there is still the argument submitted by Ryanair maintaining that the obligation to provide care has the effect of depriving a party of the fruits of its labour and its investments. The Advocate General notes in this regard that Article 52(1) of the Charter provides that any limitation on the exercise of the rights and freedoms recognised by the Charter must be provided for by law and must respect the essence of those rights and freedoms. Subject to the principle of proportionality, limitations may be made only if they are necessary and genuinely meet objectives of general interest recognised by the European Union of the need to protect the rights and freedoms of others.

The French Government has noted that Article 169(1) TFEU provides that the European Union must promote the interests of consumers and ensure a high level of consumer protection. Article 38 of the Charter provides that EU policies must ensure a high level of protection for air passengers, and Regulation 261/2004 seeks to ensure a high level of protection for air passengers, regardless of whether they are denied boarding or whether their flight is cancelled or delayed, since they are all caused similar serious trouble and inconvenience connected with air transport.

The obligation on the air carrier under Articles 5 and 9 of Regulation 261/2004 to provide care for air passengers where the cancellation of the flight is caused by extraordinary circumstances does not appear to be capable of breaching the principle of proportionality.

Therefore the Advocate General considers that Articles 5 and 9 of Regulation 261/2004 does not infringe Articles 16 and 17 of the Charter.

In the view of the Advocate General Articles 5 and 9 of Regulation 261/2004 must be interpreted as not implying any release from or limitation of the obligation to provide care for passengers whose flights have been cancelled owing to extraordinary circumstances.

With its pro-consumer jurisprudence, the Court is likely to decide in the line of the Advocate General’s opinion.

D. Side note about State Obligations: and duties of States
In the frame of the actual thoughts and discussions of the European Commission to amend Regulation 261/2004, the Iceland Eyjafjallajökull issue is not the first one which happened. One refers to some landmark events as of a British Airways B747 being affected by volcanic ash occurred on June 24th, 1982 where the aircraft lost power on all its engines while flying at an altitude of 37,000 feet on its way from Kuala Lumpur to Perth, and also f.i. the KLM flight 867 on December 15th, 1989 flying from Amsterdam to Anchorage.

In the frame of the above discussed opinion, its paramount to refer as well to the Chicago Convention which provides in its Article 9 that each Contracting State may, for reasons of Military necessity or public safety, restrict or prohibit uniformly the aircraft of other states from flying over certain areas of its territory, provided that no distinction in this respect is made between the aircraft of the State whose territory is involved, engaged in international scheduled airline services, and the aircraft of the other Contracting States likewise engaged.

Annex 3 to the Chicago Convention provides that a Member State of ICAO, having accepted, consequent upon a regional air navigation agreement, the responsibility for providing a Volcanic Ash Advisory Centre, within the framework of the international airways volcano watch, is required to arrange for that centre to respond to a notification that a volcano has erupted or is expected to erupt or volcanic ash is reported in the area of responsibility, by arranging for that centre to monitor relevant geostationary and polar orbiting satellite data. There is indeed an obligation for Member States of ICAO to maintain volcano observatories monitoring active volcanoes. The Annex recommends that the occurrence of pre-eruption volcanic activity, volcanic eruptions and volcanic ash clouds should be reported without delay to the associated air traffic services unit, aeronautical information services unit, and MWO. It will lead us too far to enter the whole issue of State liability, however the first issue here is whether a State is liable to compensate an airline for loss of business caused as a result of the closure of airspace. It is good to refer to former IATA Director General Giovanni Bisgnani’s statement that the Icelandic crisis cost airlines at least €200 million a day in loss of revenues, and that the European economy suffered billions of dollars in lost business. British Airways requested financial compensation from the European Union and the British government for the closure of Airspace, basing its claims on the fact that its test flight through the designated no-fly zone revealed that there were no variations in normal operational performance. In the frame of the responsibility and right of a State to close airspace to all aircraft in the case of an emergency under the Chicago Convention, there is incontrovertible recognition that it is the State concerned that is primarily responsible for aviation safety. Regulation 261/2004 recognizes that action in the field of air transport should aim at ensuring a high level of protection for passengers, moreover, and full account should be taken of the requirements of consumer protection. From a public international law perspective, the Chicago Convention ( Article 28) obligates Contracting States to provide in their territories airports, radio services, and other air navigation facilities to facilitate international air navigation in accordance with the standards and practices established pursuant to the Convention.

Air Carrier Liability to passengers
As far as passengers on non-Community carriers are concerned, Regulation 261/2004 is only applicable for them if they are departing from an airport located in a Member State but not if they are flying into a Member State airport from a third Country airport. The Regulation also applies to passengers departing from an airport located in a third country to an airport situated in the territory of a Member State to which the Treaty applies, unless they have received benefits or compensation and were given assistance in that third country, if the operating air carrier of the flight concerned is a Community carrier. In our view airlines do meet a liability for circumstances beyond their control and responsibility to bear the burden of consequence wrought by governmental policy. The European politicians and the Court should also understand that the aviation industry is in a crisis. Losses are there, and against this backdrop natural phenomena come to offer the aviation community some thoughts. A natural disaster is no one’s fault, and least of all the airlines fault. A natural phenomena such a volcano eruption calls upon to look after their citizens around the world if they are stranded for a period of time, which require expenses for sustenance beyond their budget. Diplomatic or consular services help their citizens in situation of death, serious illness a.o. In our view if the circumstances are beyond their control, airlines should not be expected to look after their passengers abroad, which is really the duty of the respective states of which they are nationals.

Hopefully the European legislation will see and finally understand that Airlines also have rights and that their position needs to be brought in balance. Consumer rights are to be protected, but those of the European Airlines as well. One will keep in mind that they employ many consumers as well. So let’s hope for an acceptable balance!

 

1. Wallentin-Hermann C-549/07;
2. Sturgeon and other C-402/07, C-432/07;
3. IATA and ELFAA C-344/07;
4. Manual on vocanic Ash, Radioactive Material and Toxic Chemical Clouds, ICAO, Doc nr 9691 AN/954, 2nd Edition (2007), I-1-1;
5. Ruwantissa Abey ratine, Responsibility and liability aspects of the Icelandic Volcanic Eruption, Air Space Law, Air & Space Law, 2010, 281;
6. ICAO DOC NO 9740;
7. MEMO/11/235 of 12 April 2011, “ Volcanic ash disruption: one year and crisis preparedness”.

For further information and comment, please contact Arthur Flieger at Flieger@fliegerlaw.com, Website: www.fliegerlaw.com, telephone: +32 3 238 77 66

Copyright A. Flieger