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16
sep

Newsletter September 2011: Newsletter FLO – Aviation

 

 

Arthur Flieger, Attorney of Law Flieger Law Office bvba

With the cooperation of Stijn Brusseleers, Attorney of Law Flieger Law Office bvba

 

 

Regulation Nr. 261/2004 of the European Parliament and the Council of 11 February 2004, air passengers rights, revisited – Are Air carriers insurers?

 

 

Introduction

 

EU Regulation 261/2004 has been defined by the European Court of Justice the last years to give passengers of European Air Carriers the maximum rights and security. But is the position of the European Air Carriers as such not forgotten in this interpretation, and is the position of the air passengers and the Air Carriers in balance? We think it isn’t!

 

The last years many prejudicial questions were submitted to the General Court and the Court of Justice of the European Union.

 

The main idea of the European legislation lays in the fact that there was a will that the liberalisation of air transport would take place in a controlled mode and protect those using air transport. Passengers traveling to or from the European Union received a high level of protection of their consumer’s rights from behaviour that could be inconvenient or even harmful. It’s in this respect that some rules of the Montreal convention were declared integrated in European Law.

 

1. Introduction

 

Air Carriers have to consider that the contractual liability for personal injury or damage to goods during the journey as formulated in the Montreal Convention is included into European legislation. Regulation 261/2004 creates a system in which assistance and the payment of compensation is standardised and immediate ( ECI, January 10th, 2006; case C-344/044, ECR 2006, p I 403)

 

Denied boardings, overbooking, long delays or cancellations of flights are now dealt with, and rights were recognised for passengers with reduced mobility. Today there is a general and continuing increase in the protection of air passengers’ rights, however one may question the future of the evolution of air passengers’ rights, the more that an air carrier, in our view, may not be considered as an insurance company.

 

The fees/tickets/rates are getting cheaper and cheaper, however passengers’ rights are increasing and such at the cost of the airline companies. Needless to say that a change will have to take place.

 

II. Protection of air passengers’ rights

 

One doesn’t need to pinpoint that passengers’ rights are today better protected than ever. The European Court of Justice gave important guidelines about the interpretation of Regulation n°261/2004. As well there is the European Commission’s White Paper Road Map to a single European Transport Area, which intends to go further by ensuring transversal and transmodal rights to attain a high level of protection in order to develop a uniform interpretation of European law on passenger rights.

 

One will notice that the legislation of the passenger rights in the European Union is more than ensuring the passengers are compensated for any loss or damage that occurs during transport, and tries to ensure a minimum quality of service for European citizens. These obligations to provide a minimum quality of service include the obligation to ensure that passengers are fully and completely informed about the conditions under which the transport service will be provided and the duty to inform passengers of their rights. European secondary legislation is the first to establish immediate measures to take care of passengers in the event of denied boarding, flight delays or cancellations which were transposed.

 

But again we need to stress that the rights of the airline are not, in our view, sufficiently considered, and that there should be a balance between the price the client paid and the return he will get if his rights were not fully respected. However this remark isn’t the scope of this newsletter.

 

III. European Court is passenger oriented

 

The European Court of Justice and the General Court are passenger oriented.

 

Regulation n° 261/2004 has frequently been challenged by air carriers and is indeed a source of many disputes between passengers and air carriers before domestic courts and the European General Court and European Court of Justice.

 

The European Court of Justice gave already many guidelines on how the regulations should be interpreted, and reading the decisions one will understand they tend to favour the passengers.

 

It will lead us to far to go into detail of the several decisions of the European Court, however one can refer to the IATA-ELFAA case ( ECJ, January 10th, 2006 of the validity of the Regulation 261/2004 ) were the European Court of Justice decided that Regulation 261/2004 is consistent with the Montreal Convention of 1999. In the Emirates Airlines – Direktion für Deutschland v. Diether Schenkel, Case of July 10th, 2008 ( case C-173/07, ECR 2008, I-5237 ) it was decided that the word ‘flight’ is to be interpreted as not applying to the case of an outward and return journey, but that the assistance and the financial compensation of passengers must be granted for each individual flight, which implies that Regulation 261/2004 applies both for outward and return flights for a same journey. The principle of “extraordinary circumstances” which allow carriers to avoid paying financial compensations is interpreted very strictly. The Court held that a technical problem in an aircraft which leads to the cancellation of a flight is not covered by the concept of ‘extraordinary circumstances’…, 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 ( ECJ, December 2008, Wallentin-Hermann, Case C-549/07, ECR 2008, I-11061). Actually this decision is in line with continuing airworthiness.

 

Recently the European Court held that carriers must “provide for a certain reserve time to allow it, if possible, to operate the flight in its entirety once the extraordinary circumstances have come to an end”. This Eglitis and Rohnieks-case ( ECJ, 12 May 2011, Case C-294/10) is a very good example of the passenger oriented jurisprudence of the European Court of Justice since air carriers are not only obliged to be prepared for “extraordinary circumstances”, but need also to anticipate how much of a delay will be caused by those circumstances that “may, in particular, occur in cases of political instability, meteorological conditions incompatible with the operation of the flight concerned, security risks, unexpected flight safety shortcomings and strikes that affect the operation of an operating air carrier”.

 

The Sturgeon case of November 19th, 2009 ( Cases C-402/07 and C-432/07 ECR 2009 ) is the best example of the European Court of Justice passenger-oriented approach. In Regulation 261/2004 one will not find financial compensation for delayed flights, however the European Court of Justice ruled that in certain circumstances passengers arriving at their destination with a delay of three hours or more can be entitled to receive the financial compensation provided in the Regulation. With other words gaps are getting closed and passengers are entitled to compensation for delays.

 

 

IV. Future amendments: Regulation 261/2004 revisited?

 

Voices are indeed heard that Regulation 261/2004 may be amended. There are indeed still obstacles to the creation of a single Regulation protecting the rights of passengers due to the fact that the several members of the European Union have got different legal systems to protect passengers rights.

 

There are indeed some voices claiming that Regulation 261/2004 needs to be amended to comply the rights granted to passenger, however we are of the opinion that the protection of passengers’ rights are indeed important, however today with the safety rules, financial crisis and turmoil the EU legislation should also consider not to impose only rules and obligations to protect passengers to the air carriers, but also consider air carriers’ interests, with a view of the changed market.

 

 

V.Equal treatment

 

The principle of equal treatment of carriers implies that similar situations should be treated in the same way. In the abovementioned IATA and ELFAA case, the European Court of Justice decided that the different modes of transport are not interchangeable and therefore passengers using different modes of transport are not in comparable situations. In the Sturgeon case, which is the basis for the court to rewrite Regulation Nr. 261/2004 this issue was raised.

 

Uniform interpretation of Regulation 261/2004/EC wishful thinking of reality

 

Article 16 of Regulation 261/2004 states that each Member State designates a body responsible for the enforcement of this Regulation This means that there are indeed several differences in the interpretation of passengers’ rights in each Member State. There are also sanctions that can be imposed under domestic law on airlines that breach the Regulation which vary from Member State to Member State, which all creates a problem of competition within the internal market. The European Commission would like to continue to work with the national enforcement bodies to ensure an effective enforcement and a common interpretation of the Regulation as it said such in its communication of April 11th, 2011, but this all in a rather very moderate and in our view inappropriate way.

 

It’s stated that the European judges are defining and interpreting the regulation. But the European regulator should be find more precisely what may be considered for instance:

 

a – Extraordinary circumstances;

b – Delay

c – Which time period should be taken into consideration when determining whether a flight is said to be delayed upon its arrival;

d -The time when the aircraft lands or when the passengers finally disembark.

 

One will certainly understand that there are two big question marks which are important when claims are made for financial compensation for delayed flights, for instance when the delay is not quite or barely three hours.

 

In our view the European judges should give carriers more legal clarity in their dealings with passengers and the European air carriers’ interests should be taken into account. Needless to say that not every question can be solved in the regulation as such, and that the judges will always be there as a guarantor for the passenger’s rights as well as for the carriers but who in our view, do not always have a balanced position.

 

European air carriers interests

 

The European air carriers have a very important substantial financial burden, which was indeed bigger after the European Court decision in the Sturgeon and Wallentin Hermann case. Now with the financial turmoil affecting the air carriers, and with the introduction of the EU ETS, there is a growing awareness that air carriers’ obligations should be more proportionate. The European Commission demonstrated its intention to launch in 2011 an Impact Assessment to assess the proportionality of the current measures in the light of experience and the cost of the regulation for stakeholders, with a view to propose further measures on Air Passenger Rights, including of a legislative nature, in 2012 ( European Commission, Communication, April 11th, 2011 )

 

This all will not lead to a satisfactory solution, and in our view the protection of passengers’ rights should be reviewed and conceived as an issue of global competition. As the air industry is very well aware, Regulation 261/2004 applies only “to passengers departing from an airport located in the territory of a Member State to which the Treaty applies and 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 if the operating air carrier of the flight concerned is a Community carrier”.

 

Flights arriving into the EU by non-EU airlines are not subject to the same Regulation and in our view there are indeed big issues of enforcing EU law outside the European Union which is creating a disadvantage for European Carriers. As well the European judges and policymakers are also not using the possibility of the introduction of an extra-territorial rule in respect of European Regulation as some other countries in the world. The European Commission should behave more as a lion to defend the position of its Air Carriers!

 

European legislation should consider global competition as such and find a balance between the conflicting interests of the EU law without weakening the European industry.

 

The financial burdens, the economic crises and the non-consistent jurisprudence by which the European Air carriers are more and more considered to be an insurer for the passengers’ rights’ despite the fact that prices and rates are going down, one should make choices.

 

 

 

For further information and comment, please contact Arthur Flieger at Flieger@fliegerlaw.com, Website: www.fliegerlaw.com, telephone: +32 3 238 77 66 – fax: +32 3 216 18 44

 

 

 

Copyright A. Flieger

 

 

This newsletter has been drafted on the basis of publicly available resources. It is intended to provide information of general interest to the public and is not intended to offer legal advice about specific situations or problems. Flieger Law Office bvba does not intend to create an attorney-client relationship by offering this information, and anyone’s review of the information shall not be deemed to create such a relationship. You should consult a lawyer or Flieger Law Office bvba if you have a legal matter requiring attention. For further information, please contact Flieger Law Office bvba: flieger@fliegerlaw.com