The European Court of Justice (ECJ) has thrown out a challenge brought by IATA and Europe’s low-cost airlines against new rules covering passenger rights in cases of denied boarding, cancellations and delays.

The decision was widely expected, given a similar decision by the court’s advocate general late last year. IATA and the European Low Fares Airlines Association had argued that the new regulations, which came into force in February last year, was contrary to the Montreal Convention and, as they were not based on the actual price of the ticket, infringed the principle of proportionality.

The ECJ rejected both arguments, ruling that the Montreal Convention dealt with the conditions in which, after a flight has been delayed, passengers may bring an action for damages, where as the new regulation sets out actual compensation measures. The Court also ruled that the price of the ticket was a matter for the airlines, and should not bear any relation to the compensation for the inconvenience caused.

The ruling brought strong protests from European airlines. “The European Commission is trigger-happy to penalise low-fares airlines when it turns a blind eye to the billions that go into carriers like Alitalia or Olympic Airlines,” says easyJet. The Association of European Airlines said it was “disappointed” at the ruling, regarding it as “fundamentally flawed”, setting “unclear and unworkable standards”.

However, with the Commission promising to review the regulations in 2007, commentators point out that the case, although lost, has helped build up pressure on Brussels to amend the rules.

Airlines also received a boost at the close of 2005 when the first test at local level went in their favour. The regulations says that airlines do not have to pay compensation if they can prove that the cancellation was due to “extraordinary circumstances which could have been avoided even if all reasonable measures had been taken”.

This has been one of the aspects of the regulation that airlines have complained is unclear. In a case late last year in the UK, a county district court ruled that KLM did not have to pay compensation for a flight between Newcastle and Amsterdam that was cancelled due to a fuel leak.

The court ruled that the leak constituted extraordinary circumstances and that KLM could not have been expected to keep spare aircraft available in such circumstances

Kathryn Ward, an aviation lawyer at the London offices of DLA Piper, which defended KLM in the case, says: “The regulation places undue pressure on airlines to pay compensation in situations which are often completely beyond their control. Passenger safety is paramount and airlines should not be penalised for putting safety first, even where this may lead to cancellation or delay.” ■


Source: Airline Business