A last-ditch attempt by airlines to persuade Europe's transport ministers to abandon controversial passenger rights regulations has ended in failure, but this is unlikely to be the end of the story.
Europe's airlines had lobbied hard to persuade transport ministers not to ratify the European Union regulation that covers compensation for denied boarding, long delays and cancellations. But with only the UK and Ireland voting against, and Germany abstaining, their efforts proved to be in vain. Parliament has already given its blessing to the proposals after agreeing a compromise position with Europe's transport ministers.
No other legislative proposal has caused such consternation in the industry during European Commissioner Loyola de Palacio's five-year term of office, which is due to end late this year. Europe's main airline trade bodies, including the newly established European Low Fares Airline Association, are looking at the possibility of a joint legal challenge.
"Legal opinion indicates that the text does not meet the obligations of member states under the Warsaw and Montreal Conventions and includes a number of unclear provisions," complains Association of European Airlines (AEA) secretary general, Ulrich Schulte-Strathaus.
"Inept drafting of legislation and the failure of the European Commission to apply its own principles on good governance will add €1.5 billion [$1.9 billion] a year to air fares," warns Mike Ambrose, director general of the European Regions Airline Association (ERA).
Brussels put forward its proposals on passenger rights in 2001, pushing aside a voluntary scheme drawn up by European carriers. The European Commission has always made it clear that one of the reasons it rejected the voluntary approach was the fact that it was rejected by some low-cost carriers.
However, what has infuriated the airline industry is that a process that was originally designed to update a regulation on denied boarding compensation has extended in scope to include a wide-ranging change in compensation and assistance for cancellations and delays.
The compromise reached between Parliament and Europe's transport ministers was based on a three-distance band system, with compensation levels of €250 for flights of under 1,500km (930 miles); €400 for European flights of less than 1,500km, and other flights between 1,500km and 3,500km; and €600 for all other flights.
In the case of delays of two hours or more, passengers will be offered meals and refreshments and if the departure is not until the next day they will be offered free accommodation, as well as two telephone calls, faxes or e-mails free of charge.
In the event of a cancellation due to events beyond the control of the airline concerned, carriers will not be liable for providing overnight accommodation, food and refreshments, or reimbursement - but they will be liable for long delays (over 5h) and over-booking. Parliament succeeded in removing any reference of "extraordinary circumstances" as a reason for airlines not to be liable for offering assistance.
Airlines warn that the system is open to abuse. For instance, Andrew Clarke, air transport policy director at the ERA says that passengers living close to airports who could easily travel home in the event of long delays or cancellations will now be tempted to make use of the overnight accommodation.
Source: Airline Business
