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For Business, Corporate Travel & Meeting Buyers & Arrangers

Legal: Delayed reaction

Pile of money to represent compensation

The long-running battle between airlines and passengers over compensation for flight delays is off to the Court of Appeal

An article within EU Regulation 261 allows airlines to defend compensation claims from passengers who have suffered flight delays. Airlines have to prove that the cancellation or delay was caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken.

This has generated plenty of litigation for airlines and claimants seeking rulings upon what might be deemed extraordinary and when airlines must pay the set levels of compensation for delays.

Extraordinary events
The regulation contains a number of recitals putting the regulations into context. In particular, examples are given of possible extraordinary events, including political instability, weather incompatible with the operation of the flight, security risks and strikes (recital 14).

Recital 15 states that extraordinary circumstances should be deemed to exist when a long delay is caused by the impact of an air traffic management control (ATC) decision, even though all reasonable measures had been taken by the airline.

Many passenger claims are defended on the basis of delay due to weather conditions and other associated ATC decisions that the airline was obliged to follow. Such a case was decided in the airlines’ favour in Blanche vs Easyjet at Luton county court earlier this year.

The passenger’s claims were dismissed on the basis that while recital 15 is not binding on the court, it is persuasive and it was not for the court to go into the reasons and merits of the ATC decision. The passenger’s argument that the delay was caused by thunderstorms over Gatwick and did not amount to “freak weather conditions” was irrelevant.

It was the consequences of the ATC decision that caused the delay and, therefore, “extraordinary circumstances” apply. This decision has now been appealed to the Court of Appeal.

This case has significant impact upon the operations of major airlines given the number of passengers who are delayed by weather-related issues and ATC decisions, and they will be anxiously awaiting the decision of the Court of Appeal expected by the end of the year.

Regulation overload
There has been a lot of groaning in the travel industry about regulations arriving like buses – several at once – with 2018 requiring travel firms to comply with the General Data Protection Regulation, the Package Travel Regulations and the Payment Services Directive 2, all of which will impact their businesses.

Perhaps not surprisingly, many industry players are leaving review processes and any necessary changes to the last minute. However, there are positives to getting ahead of the curve, as this can help to enhance a company’s reputation as well as demonstrating knowledge and compliance with these new rules.

Some of the main implications for the corporate travel sector from these regulations are:

•  Corporates are increasingly expecting TMCs, intermediaries and suppliers to be fully compliant with these new regulations. Those already complying are in a far better position in any RFP (request for proposal) or tender process to show that they understand and have implemented the changes required by these new regulations.

•  Many TMCs, corporates and suppliers are revisiting their standard terms of trading. New and compliant contracts give consistency across their legal landscape and demonstrate that they are complying with the new rules.

•  Travel buyers are particularly concerned about compliance with GDPR. They want the best possible compliance by their business partners and indemnities to protect their traveller data.

•  Non-compliance with the new regulations is likely to create a bad impression, which will put a company at a disadvantage when competing for clients.

Compliance doesn’t have to be expensive. The Information Commissioner’s Office (ICO) is well aware of potential costs to SMEs in particular. The ICO’s website is a good starting point to analyse what needs to be done. Noncompliance may end up costing a company considerably more.

Related: Airline passengers can be compensated for ‘wildcat’ strikes

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