ECJ ruling on support for passengers in “extraordinary circumstances” may cause airline costs to erupt

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On 31 January 2013 the European Court of Justice ruled that Ryanair should pay compensation for failure to provide care to passengers stranded because of the 2010 volcanic eruption in Iceland. The Court ruled that, if a flight is cancelled, airlines are obliged under EU law to provide care to passengers, even in “extraordinary circumstances” outside the airline’s control. The case has important implications for both airlines and passengers in clarifying airlines’ responsibilities to passengers.

Following the 2010 volcanic eruption in Iceland and the consequent closure of part of European airspace, an Irish passenger commenced legal proceedings against Ryanair for failing to provide her with any care during the closure period, in contravention of Regulation No 261/2004 (the “Regulation”). She sought to recover from Ryanair the cost of meals, refreshments, accommodation and transport incurred by her during that time.

The Court held that:

  • the partial airspace closure as a result of a volcanic eruption constituted “extraordinary circumstances” under the Regulation;
  • as a result, air carriers (i.e. airlines such as Ryanair) must provide care to passengers whose flights were cancelled; the provision of care includes refreshments, meals and (where appropriate) hotel accommodation and transport between the airport and place of accommodation, as well as means of communication with third parties. This obligation is not limited to a specific time frame or monetary cap; and
  • the air carrier is, however, exempt from its obligation to provide additional financial compensation of up to EUR600 if it can prove that the cancellation of a flight is caused by extraordinary circumstances that could not have been avoided.

Whilst the Court recognised that the obligation to provide care in circumstances beyond the control of air carriers would result in a significant financial burden, it considered that this was proportionate to the aim of ensuring a high level of protection for passengers, particularly in cases of “extraordinary circumstances” which persist over a long time.

This is the latest in a series of controversial judgments relating to the Regulation which have widely been seen as interpreting the provisions beyond their original intended scope. One of the driving forces behind the Regulation was the perception that airlines deliberately overbooked flights to allow for “no shows” and the concern that, where flights were too full, passengers were denied boarding. The Regulation was therefore introduced to make this practice more costly to airlines. The impact of the Court’s decisions has, however, been further reaching. For example, in 2009, the Court held that, in spite of the absence in the Regulation of any express obligation on airlines to compensate passengers for delay, passengers are entitled to compensation for any delay of over three hours provided the airline cannot raise a defence of “extraordinary circumstances” (Sturgeon v Confor and Bock v Air France (C-402/07 and C-432/07). On 26 February the Court will consider this further and clarify the situations in which it applies.

The obligation to provide care to passengers in the event of flight cancellations caused by “extraordinary circumstances” beyond an airline’s control will undoubtedly lead to increased financial and administrative pressures on airlines across the EU, particularly low cost airlines.

Furthermore, there is a concern that the lack of an “extraordinary circumstances” defence may put commercial pressures on airlines for aircraft to depart on time where safety is compromised (since the costs of refunding/ assisting every passenger on a full aircraft are substantial).

Ultimately, however, it is passengers who are most likely to feel the adverse effects of the decision, as the Court recognised that the increased financial burden on airlines is likely to be passed on to passengers through increased fares.

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