This week has seen publication of the EU Commission's 'proposals' for a new and improved flight delay, flight cancellation and denied boarding regulation. The much maligned EC Regulation 261/2004 has been given a re-boot following the furore of the Volcano crisis in 2010. Judging by the reactions this week, we have seen various commentators hyperventilating about the merits of the Commissions 'proposals'.
You may have noticed that I have been placing the word 'proposals' between quote marks; there is a good reason for this because this is exactly what they are - 'proposals'!
Let's just put some of this into perspective! At the time of the Icelandic Volcano crisis, I was one of the many thousands of travellers affected by the inability to travel by air. I had to take a very long route to Brussels to speak about the issues relating to the Package Travel Regulations. The very morning I was due to speak, the airline industry, reeling from the sheer volume of the logistical nightmare they were faced with, called for the repeal of EC Regulation 261/2004.
Their argument was that the Regulation was unsuitable for the needs of 21st Century air travel and a burden on business as demonstrated by the Volcano crisis.
At that stage we were already advising Consumers of their rights under 261/2004 but recognised the need to inject balance into the Regulation during times of crisis. We therefore called on the Commission to reject the siren voices and to strengthen the Regulation by importing a crisis clause in the event that another major event was to affect the air routes of Europe.
All relevant stakeholders were invited thereafter to set out their stall on how they thought the Regulation should be changed and we were invited to a Stakeholders conference in Brussels in 2012.
At that conference there were some 300 delegates from the Airline, Consumer and Government 'industries'. There was a spirited debate but it was clear to most observers that the cry for de-regulation was not going to happen; if anything the Regulation was going to be strengthened.
Fast forward to 2013 and the Commissions 'proposals' which is the result of much lobbying - and yes that includes the Aviation Industry (I was severely censored by a delegate from the European Low Fares Airlines Association at the Brussels meeting of 2010, for having the temerity to suggest that they were an active and powerful lobbying machine!). The 'proposals' created by the Commission reveal a fine balance between all the competing interests (is that really a surprise?), for onward discussion!
Yes that's right, more discussion, this time in the EU Parliament and with the Member States before it is passed into law in 2014!
So commentators getting vexed with the 'proposals' are somewhat premature in venting their spleen as to whether Consumers or the Aviation Industry have got the better deal!
On Saturday, I had the very great pleasure in probably being one of the last contributors on the BBC News program coming from the now defunct television centre in London. In that interview I highlighted what I thought was the problem with the 'proposals' but I also stated that in general terms there were a lot of positive 'proposals' coming from the Commission.
This opinion would seem to be at odds with some commentators but the simple fact is this, on all but one major point and one minor point, the Commission has listened! I think the issue can be divided in 2 ways - the argument between paying attention to your customers needs and actually paying them compensation.
On the plus side of the 'proposals', that is paying attention to your customers needs, are the following:
- Tarmac assistance and rejection of a flight after 5 hours;
- A clear statement on providing re-routing on comparable transport, including other airlines, after 12 hours;
- The right to care for all passengers, regardless of distance to be flown, after 2 hours, when a flight is delayed (this logically applies to passengers suffering flight cancellation and denied boarding?);
- Those suffering with misspelt names on flight tickets will be able to have them changed - without charge - up to 48 hours after purchase;
- Those who do not show for one portion of their flight are to be no longer penalised and will be able to take the next flight portion;
- Passengers with disability or vulnerable persons are to have 'uncapped' rights of care;
- Passengers with mobility equipment are to be allowed to declare the actual value of their equipment at check-in so as to ensure that they receive the full value should that equipment be damaged or lost;
- Small musical equipment will be allowed into an aircraft cabin so avoiding baggage charges (this was a point well advocated by musician interests);
- Information on the problems with flights to be given to Consumers within 30 minutes of the scheduled departure;
- Clearer systems and documentation to ensure the handling of baggage claims at airports;
- Where baggage claims arise, there has to be greater transparency and the National Enforcement Bodies (in the UK's case this is the CAA) will have a duty to enforce the Regulations;
- Complaints made to airlines must be acknowledged in 1 week and a substantive response given within 2 months - the Consumer must make the complaint within 3 months of the flight in question;
- Where moments of crisis arise, airports must co-ordinate with airlines and create a contingency plan to aide Consumers;
- Consumers and by inference airlines, to be allowed to move toward out of court settlement procedures such as mediation/arbitration;
- There are no changes to the levels of compensation criteria (some would criticise that point, but in these hard pressed times is that a reasonable position to take - is it equally reasonable to say they should reduced when expenses are on the rise? I dare say that sometime in the future these levels will be reviewed again).
The negative side of the proposals revolves around the defence that airlines can deploy, under the guise of 'extraordinary circumstances'!
At the Consumer coalface, the main complaints can be summarised as follows:
- The use by airlines of the extraordinary circumstances 'defence';
- Following the recent European Court of Justice decision on flight delay compensation - currently you can receive it if you are delayed for 3 hours or more (the new 'proposals' suggest that this should be increased to 5 hours for short flights and 9 hours for longer flights). Consumers are now faced with a raft of claims by airlines that their flights were affected by 'extraordinary circumstances';
- This claim of 'extraordinary circumstances' causes problems for Consumers when they try to prove that their flight was not caused by 'extraordinary circumstances' and suggests that claiming may be a costly affair;
- Consumers suffer with poor or no responses from airlines to their complaints;
- Consumers suffer with the 'light touch' response from the National Enforcement Bodies (in the UK's case the CAA).
To help Consumers understand what 'extraordinary circumstances' are, these are currently defined in the Regulation as:
'Obligations on operating carriers should be limited or excluded in cases where an event has been caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken. Such circumstances may, in particular, may 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 could affect the operation of an operating carrier.
(should be) deemed to exist where the impact of an air traffic management decision in relation to a particular aircraft on a particular day gives rise to a long delay, or the cancellation of one or more flights by that aircraft, even if all reasonable measures had been taken by the air carrier concerned to avoid the delays or cancellations'.
So we need to break that down to understand the defence further:
- The airlines right to compensate you should be limited or excluded if an 'extraordinary circumstance' exists;
- Such a circumstance could not be avoided;
- Such a circumstance could not be avoided if all reasonable measures were taken by the airline;
- The examples given by the Regulation 'may' 'in particular' arise in:
- Political problems,
- Weather conditions,
- Security problems
- Flight safety issues which arise unexpectedly,
- Industrial disputes,
- Air traffic Control decisions (even if all reasonable measures to prevent delay or cancellation have been taken by the airline).
That is quite a lot for an ordinary Consumer to take in and challenge!
The 'proposals' of the Commission have chosen not to divide the definition of 'extraordinary circumstances' but rather re-hash the same definition with reference to an European Court of Justice case which refers to defects arising in an aircraft as not being 'inherent' in the normal operations of the aircraft. They also refer to natural events and strikes as qualifying the airlines to evade responsibility for compensation.
What is also surprising is the cap on care that has been imposed via this new 'extraordinary circumstances' definition. If we were to have another Volcano crisis, accommodation would be limited to 3 nights in 'exceptional circumstances'!
So the Commission is now proposing a 2-stage test for Consumers:
- That the airline did not suffer with an 'extraordinary circumstance' and
- That the Consumer must show that an 'exceptional circumstance' had arisen for them to benefit from the rights within the Regulation.
Quite simply I am not sure how this new 'proposal' has taken us any further. It is our view that far from creating a level playing field it will give rise to a greater uncertainty and greater costs for Consumers to mount challenges.
The problem is that on these points, the 'proposals' are currently vague and I suspect that the devil is in the detail yet to come!
For example, on one point, strikes, the Commission had a golden opportunity to make the distinction between 'advance notice' strikes and 'wild-cat strikes'. The latter creates a problem for everyone, the former allows an airline to forward plan; quite simply an 'advance notice' strike cannot be simply claimed to be an 'extraordinary circumstance'.
Another area of concern is the new definition on 'exceptional circumstance' - this along with what constitutes an 'extraordinary circumstance', or not as the case may be, will I suspect create nothing more than a determined 'defeat the claim at all costs' culture, not to mention salivating lawyers!
In short, the Consumer is not served well by these particular 'proposals'!
Another area of concern is in the apparent failure to deal with the problem of the 'National Enforcement Bodies'.
It is suggested that the new 'proposals' will reinforce coordination, but there is a lack of detail in the 'proposals' on how this can be achieved.
The Commission suggests that it will have the power to launch joint investigations, presumably on breaches by airlines or the failures of the National Enforcement Bodies themselves?
It will apparently be the duty of the NEB's to monitor airline policies, insolvency, persuading Consumers toward Insurance solutions (an interesting comment) and Consumer rights with credit cards (on this latter point and given the attitude of credit card issuers on many travel claims, I suspect that more work is going to have to be done with DG Enterprise to ensure the credit card issuers are on-board?).
There is a lack of clarity on the role of NEB's and enforcement and I suspect that we are going to have to guide Consumers to make more direct complaints to the Commission to ensure that Regulation is being properly enforced, even before 2014!
We are also concerned that the 'proposals' did not bring forward the 'key facts' documents point. As a very simple device, not in any way cost prohibitive on the Industry, this would have provided a real incentive for Industry and Consumers to get it right and re-set the relationship between both!
There are quite simply solutions to these conundrums, as we set out in our response to the Commission in 2012:
'The EU Commission should refer to our reports of 2010. This organisation made clear within a couple of days of the crisis, that the siren voices calling for the abolition of the Regulation should not be heeded. We presented publicly and to the Commission that the general operation of the Regulation should not be changed; the issue during and following the Ash Cloud Crisis was the need to consider adding a ‘Crisis Clause’ into the Regulation. Simply, the Regulation should make specific provision for such crises (such as Volcanic, Nuclear, Tsunami, Pandemics etc) and provide power to the EU Commission to declare a ‘crisis’ within the operation of the Regulation. This would remove arguments over ‘extraordinary circumstance’ and make clear that a unique situation has arisen and attracts a different but comparable set of rights. We would suggest that within the scope of those rights, sensible limits are set which are fixed (subject to annual review) and reflect the range of assistance found within the general operation of the Regulation. The creation of a ‘crisis clause’ would bring certainty to Airlines, Consumers and would perhaps also serve notice on the Insurance industry the need for them to react to the creation of such a clause within their contracts to cover shortfalls in any cost recovery'.
'We are of the opinion that great care must be exercised in developing a list of ‘technical reasons’ which negate an airline’s liability in ‘extraordinary circumstances’. The problem for Consumers is that in the drafting of such a clause, how will they know what is reasonable to include as they have no technical knowledge? In the drafting of the ‘technical clause’ care must be exercised to ensure that the Consumer is represented by an objective technical representative, who will guarantee that the ‘clause’ is both reasonable and that it is not also drafted vaguely to provide for a wider interpretation than intended!'
'With regards to the ‘non-technical’ clause, we would initially draw attention to the issue of strikes. It is quite clear to this organisation that the threat of an industrial dispute is usually advertised well in advance. It is remarkable that in the planning of schedules, airlines fail consistently to factor this issue into their operations until the last minute. We argue that it cannot be possible to argue an ‘extraordinary circumstance’, when advance public notice of a strike has been given. A clear distinction needs to be made between a ‘lightening’ or ‘wild-cat’ strike and one that is presented with prior notice. We would also offer caution on weather & political events. The sudden on-set of a weather or political event is accepted as being an ‘extraordinary circumstance’, however, following the ‘sudden on-set’ of the event, we do not agree that the following days or weeks can be classed as an ‘extraordinary circumstance’. It therefore follows that in the first instance, clear rights/lack of rights exist, but in the following days, there will be a need to perhaps consider the aftermath of these events, defining rights on a sliding scale (in other words increasing from their minimum) as you move further away from the index event'.
'We foresee problems for Consumers if this issue is passed to Insurance Companies; we are confident that such Companies would create new and restrictive clauses preventing claims. We would refer the EU Commission to our replies on this issue in 2010'.
'On the issue of a ‘key facts’ document, we have advocated this position within our 2010 response and before the Stakeholder meeting on the CAA (UK) Consumer Objective in January 2010. During that meeting the airline representatives made strong objections to such a documentary requirement. We take the view that the purchase of an airline ticket is a complex financial issue, with detrimental issues to the Consumer if the process or contract should go wrong. As in all complex financial transactions, there is a sensible requirement that ‘key facts’ should be demonstrated for ease of reference. We cannot understand the reluctance to do so (one low cost airline representative stated that such a document would impart ‘bad news’ for Consumers and that their marketing people would not agree with it (what of the ‘bad news’ contained in a safety sheet on-board the aircraft?)). Such a document should not only set out the information above but should also provide basic information on 261 rights, mobility rights and those rights that affect baggage problems'.
So we take the view that these 'proposals are a positive step forward, subject to the problems with 'extraordinary circumstance', NEB's and 'Key facts'!
We should remember that this Organisation is still dealing with Consumers who have yet to settle their ash cloud claims and that is under the current Regulation; this is why it is important to get this right!
There is a long way to go yet before we know the full extent of the new Regulation and I suspect a great deal of lobbying; in the meantime, Consumers should read and digest the current 261/2004 Regulations and ensure that they receive the full range of air passenger rights that they are entitled to!