Explanatory Memorandum to COM(2013)130 - Amending rules on compensation and assistance to passengers when denied boarding, cancellation or long delay of flights and air carrier liability on carriage of baggage - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2013)130 - Amending rules on compensation and assistance to passengers when denied boarding, cancellation or long delay of flights and ... |
|---|---|
| source | COM(2013)130  |
| date | 13-03-2013 |
Regulation (EC) No 261/2004[1] depending on the circumstances of the travel disruption, requires air carriers to:
· provide passengers with assistance, such as meals, refreshments, telephone calls and hotel accommodation;
· offer re-routing and refunds;
· pay a flat-rate compensation of up to €600 per passenger, depending on the flight distance; and
· proactively inform passengers about their rights.
The airline is not obliged to pay financial compensation if it can prove that the cancellation or delay was caused by extraordinary circumstances. However, the obligations for care and assistance are upheld even in such situations.
The Regulation also requires Member States to establish National Enforcement Bodies (NEBs) to ensure the correct application of the Regulation.
The rights of passengers under the Regulation should not be confused with their rights under the Montreal Convention: whilst the Convention provides for individualised damage to travellers, assessed on a case-by-case basis depending on the individual circumstances of the passenger, Regulation (EC) No 261/2004 establishes standardised entitlements (with regard to assistance and care) applicable to all passengers, regardless of their individual circumstances.
Under the Montreal Convention (as translated by Regulation (EC) No 2027/97[2] into EU law), a passenger may be entitled to compensation in case of mishandled baggage (but with a limit of about €1200), except if the airline can demonstrate it has taken all reasonable measures to avoid the damages or it was impossible to take such measures. Unlike Regulation (EC) No 261/2004, neither Regulation (EC) No 2027/97 nor the Montreal Convention requires the establishment of enforcement bodies to ensure their correct application.
Airlines often fail to offer passengers the rights to which they are entitled in instances of denied boarding, long delays, cancellations or mishandled baggage, in particular under Regulation (EC) No 261/2004 ("the Regulation") and Regulation (EC) No 2027/97.
The Commission EU Citizenship Report of October 2010 on dismantling obstacles to EU citizens' rights[3] announced measures to ensure a set of common rights for passengers travelling by any transport mode across the EU and the adequate enforcement of these rights.
The Commission White Paper on Transport adopted on 28 March 2011 mentioned among its initiatives the need to 'develop a uniform interpretation of EU law on passenger rights and a harmonised and effective enforcement, to ensure both a level playing field for the industry and a European standard of protection for the citizens'.[4]
The Commission Communication of 11 April 2011[5] reported on the varying interpretation being taken on the provisions of Regulation (EC) No 261/2004, due to grey zones and gaps in the current text, and the non-uniform enforcement across Member States. Furthermore, it is difficult for passengers to enforce their individual rights.
On 29 March 2012, the European Parliament (EP) adopted a resolution[6] in response to the above Commission Communication. The EP believes that proper application of the existing rules by Member States and air carriers, enforcement of sufficient and simple means of redress and providing passengers with accurate information concerning their rights should be the cornerstones of regaining passengers’ trust. The EP regrets that the national enforcement bodies do not always ensure effective protection of passenger rights. With regard to Regulation (EC) No 261/2004, the EP asks the Commission to propose a clarification of the passengers' rights, in particular the notion of ‘extraordinary circumstances’.
EU legislation must be in full conformity with the Charter of Fundamental Rights[7]. More specifically, it follows from Article 38 that a high level of consumer protection should be attained in all Union policies. Other relevant provisions include the right to the protection of personal data (Article 8), the prohibition of any form of discrimination and the integration of persons with disabilities (Articles 21 and 26) and the right to an effective remedy and to a fair trial (Article 47).
Case law has had a decisive impact on the interpretation of the Regulation. In case C-344/04 (IATA), the ECJ confirmed its full compatibility with the Montreal Convention and the complementarities between the two legal instruments. In case C-549/07 Wallentin-Herrman, the Court clarified when a technical problem in an aircraft should not be regarded as an ‘extraordinary circumstance’. In the Sturgeon case (Joined Cases C-402/07 and C-432/07), the ECJ held that a long delay of at least three hours at arrival entitles passengers to compensation.
This proposal aims to promote the interest of air passengers by ensuring that air carriers comply with a high level of air passenger protection during travel disruptions, while taking into account the financial implications for the air transport sector and ensuring that air carriers operate under harmonised conditions in a liberalised market.
Contents
- RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND IMPACT ASSESSMENT
- LEGAL ELEMENTS OF THE PROPOSAL
- Budgetary implication
- 1.1. The current legal framework
- 1.2. Recent developments
- 2.1. Consultation process
- 2.2. Impact assessment
- 3.1. Legal basis
- 3.2. Subsidiarity and proportionality
- 3.3. Detailed explanation of the proposal
- 3.3.1. Ensure effective and consistent enforcement of passenger rights
- 3.3.1.1. Clarification of key principles
- 3.3.1.2. Ensure effective and consistent sanctioning
- 3.3.1.3. Ensure effective handling of individual claims and complaints
- 3.3.2. Better take into account the financial capacities of the air carriers
- 3.3.3. Ensure better enforcement of passenger rights with regard to mishandled baggage
- 3.3.4. Adapt liability limits in accordance to general price inflation
A public consultation was carried out between 19 December 2011 and 11 March 2012; 410 submissions were received. The results are available on the Commission's website[8]. Moreover, a consultant undertook individual and more detailed interviews and consultations with 98 stakeholders from all stakeholder groups.
Finally, on 30 May 2012, the Commission and the European Economic and Social Committee co-organised a conference giving stakeholders the opportunity to respond to the results of the public consultation. The presentations and the minutes of the conference can be found on the Commission's website[9].
The consumer and passenger representatives mainly focused on poor compliance and inadequate enforcement, especially with regard to financial compensation in case of delay. Airlines and their associations mainly considered that the financial cost of the Regulation is excessive, particularly that airlines face unlimited liability for incidents which are not their fault (e.g. volcanic ash cloud crisis in April 2010). The airlines heavily criticised the consequences of the Sturgeon judgement as causing excessive costs. The views of the travel agent and tour operator associations were similar to those of the airlines, but with some notable exceptions such as in regard to the right to rerouting or to the use of individual segments of a flight ticket ("no show" policy). Airports expressed strong opposition towards being given any responsibilities under the revised Regulation.
The national and sub-national authorities that responded to the public consultation expressed views on most issues which were similar to those of the consumer/passenger associations, but were more sensitive to economic, budgetary and legal constraints.
The Commission has assessed four policy options in view of improving the application and enforcement of air passenger rights. They differ by the chosen trade-off between stronger enforcement and adjusted economic incentives for airlines: a heavier cost is an incentive for airlines for minimising costs of compliance and trying not to grant passengers their rights. A stronger sanctioning policy is an incentive for compliance. Therefore, for options where the cost imposed by the obligations of the Regulation is higher, the enforcement policy must be stricter and better coordinated, and vice versa.
Such a selection was considered because a full focus on enforcement without addressing the economic disincentives for compliance would require considerable public resources to be devoted to the enforcement bodies.
Option 1: focus on economic incentives (moderate change of enforcement): under option 1, enforcement is better coordinated, mainly via a better stream of information between the NEBs and the Commission. The option mainly focuses on the reduction of costs by replacing some of the obligations with regard to care (i.e. catering, accommodation) by the obligation for airlines to propose optional insurance to passengers.
Option 2: balancing stronger enforcement policy with economic incentives: enforcement policy is reinforced through stronger coordination of NEBs. NEBs would be required to improve the information they provide to the Commission about their activities and the Commission may request investigations, especially in cases involving several Member States. Additional costs flowing from enhanced care and assistance are compensated by adjustments in the global amount of financial compensation. This can be achieved by reducing the frequency of compensation payments via two variants:
· Variant 2a: increasing the time threshold after which the passenger has a right to compensation in case of delays from the current three hours to at least five;
· Variant 2b: extending the scope of 'extraordinary circumstances' to include most technical defaults.
For both variants 2a and 2b, the impact assessment report analyses whether an additional adjustment of the lump-sum compensation amounts would be useful.
Under option 2, there would be a limit of 3 or 4 days on the obligation of accommodation in situations of extraordinary events of long duration. To mitigate the impact on passengers, contingency planning and a quicker rerouting are introduced.
Option 3: focus on enforcement: this option entirely focusses on stronger enforcement and clarifies existing passenger rights to render their application more effective.
Option 4: centralised enforcement: option 4 entirely focuses on a fully centralised enforcement policy which must counteract the negative incentives from the compliance cost: a central EU enforcement body is therefore part of this option.
In options 3 and 4, an industry fund – financed by a levy on every airline ticket - would ensure continued care in cases of extraordinary events of long duration by reimbursing at least part of the costs airlines incurred.
All policy options have some common features such as:
· the clarification of a number of issues (e.g. extraordinary circumstances as mentioned above, rerouting obligations, care during tarmac delays, rights in case of missed connections, etc.);
· a functional separation of general enforcement and of individual complaint handling where the latter may be taken charge of by alternative dispute resolution bodies (ADR). Both, the air carriers and the bodies in charge of individual complaints would be submitted to clear complaint handling procedures (including maximum response times);
· involvement of other market players: enhanced possibility for recourse of airlines against third parties responsible for disruptions; setting up of contingency plans among airport users.
The impact assessment concludes that option 2 is preferable over the others as it would most effectively and efficiently enhance passengers' rights while taking into account the financial impact on the air transport sector. Variant 2a is slightly preferred over 2b because keeping the delay threshold too short (as in 2b) might lead to more cancellations and because 2a ensures a better consistency between the right to compensation and the right to reimbursement (both arise at the earliest after 5 hours). The impact assessment does not indicate a preference with regard to further sub-variants of option 2a (i.e. adjusted compensation levels and/or multiple time thresholds for delay compensation).
Compliance costs for air carriers would be similar under option 2 compared to today's Regulation, but its upward potential would be limited in case a growing proportion of passengers claim their compensation or in an extraordinary event of long duration.
The Commission has decided to present a proposal in line with the conclusion of the impact assessment, i.e. corresponding to its option 2a, including a uniform 5-hour threshold for delay compensation for all intra-EU journeys. With regard to the sub-options, the proposal does not modify the compensation levels, but it introduces a longer threshold for delay compensation for extra-EU journeys of more than 3500 km, given the specific problems encountered by long-haul journeys to deal with the causes of delays far from the air carrier's home base (9 hours for extra-EU journeys between 3500 and 6000 km and 12 hours for extra-EU journeys of 6000 km and more).
The proposal is based on Article 100(2) TFEU.
Firstly, there is limited scope for Member States to act alone to protect consumers, as the Air Services Regulation (EC) No 1008/2008[10] does not allow Member States to place additional requirements on air carriers operating intra-EU services.
Secondly, most of the problems with air passenger rights refer to divergences of application/enforcement of Regulations (EC) No 261/2004 and (EC) No 2027/97 across Member States weakening passengers' rights and affecting the level-playing field between air carriers. Only coordinated EU intervention can address these problems.
Furthermore, the proposal complies with the proportionality principle. Any additional costs for economic operators and national authorities are limited to those necessary to improve the application and enforcement of passengers' rights. Cost increases related to the provision of care and assistance or to compensation in case of long delays are offset by modifications in the time thresholds giving rise to the right to compensation.
The proposal aims to improve enforcement by clarifying key principles and implicit passenger rights that have given rise to many disputes between airlines and passengers in the past; and by enhancing and better coordinating the enforcement policies carried out on a national level.
· Definition of 'extraordinary circumstances': the proposal clearly defines the term in line with the European Court's decision in the case C-549/07 (Wallentin-Herman), i.e. circumstances which, by their nature or origin, are not inherent in the normal exercise of the activity of the air carrier concerned and are beyond its actual control. Furthermore, for further legal certainty, the proposal introduces a non-exhaustive list of circumstances to be regarded as extraordinary and of circumstances to be regarded as non-extraordinary (Article 1(1e) of the proposal – Article 2(m) of the amended Regulation 261/2004 – and Annex 1).
· Right to compensation in case of long delays: the proposal explicitly introduces the right to compensation in case of long delays - as announced by the ECJ in the joined cases C-407/07 and C-432/07 (Sturgeon) - into the text of Regulation (EC) No 261/2004. However, to avoid an increase in cancellations (which are in general more inconvenient to passengers), the time threshold after which the right to compensation arises is proposed to be increased from three to five hours for all journeys within the EU. While a single threshold is proposed for the EU, for journeys to/from third countries, the threshold will be made dependent upon the journey distance to take into account the practical problems encountered by air carriers when addressing the causes of delays at remote airports (see below; paragraph 3.3.2) (Article 1(5) of the proposal – Article 6(2) of the amended Regulation (EC) No 261/2004).
· Right to rerouting: the proposal clarifies that if the air carrier cannot reroute the passenger on its own services within 12 hours, it must consider other carriers or other transport modes, subject to seat availability (Article 1(8) of the proposal – Article 8(5) of the amended Regulation (EC) No 261/2004).
· Right to care: where currently the time threshold for care is dependent on the flight distance (2, 3 or 4 hours), the proposal simplifies by introducing a single time threshold of 2 hours for flights of all distances (Article 1(5) of the proposal – Article 6(1)(i) of the amended Regulation (EC) No 261/2004).
· Missed connecting flight: the proposal confirms that passengers that miss a flight connection because their previous flight was delayed have a right to care (to be provided by the operating air carrier of the missed flight which is best positioned to provide this care) and, under certain circumstances, a right to compensation (to be provided by the air carrier operating the delayed flight as it was at the origin of the total delay). However, such right would only apply where the connecting flights are part of a single contract of carriage as in that case the air carriers concerned have committed to and are aware of the intended connection between the flights. The air carriers retain the right to agree on distributing costs between themselves (Article 1(6) of the proposal – Article 6a of the amended Regulation (EC) No 261/2004).
· Rescheduling: the proposal confirms that passengers of flights rescheduled with a notice of period of less than two weeks in advance of the originally scheduled time have similar rights to delayed passengers (Article 1(5) of the proposal – Article 6 of the amended Regulation (EC) No 261/2004).
· Tarmac delays: the proposal clearly sets out the rights of passengers when their aircraft is delayed on the tarmac, in particular a right to disembark after five hours (in line with the right to reimbursement) (Article 1(5) of the proposal – Article 6(5) of the amended Regulation (EC) No 261/2004).
· Partial ban of the 'no show' policy: the proposal confirms that passengers may not be denied boarding on a return journey of the same ticket on the grounds that they did not take the outward journey. However, such ban does not affect the right of airlines to impose particular rules with regard to the sequential use of flights within a same journey. The Commission decided against a full ban of the 'no show' policy because it would impair airlines from offering indirect flights at lower prices than direct flights and therefore hurt competition (Article 1(3(b)) of the proposal – Article 4 i of the amended Regulation (EC) No 261/2004).
· Right to information: passengers should have a right to information about the flight disruption as soon as the information is available (Article 1(13) of the proposal – Article 14 of the amended Regulation (EC) No 261/2004).
The proposal clarifies the role of the National Enforcement Bodies (NEBs) by clearly allocating the role of general enforcement to the NEBs while out-of-court handling of individual complaints will be a role for complaint handling bodies which may become Alternative Dispute Resolution Bodies (ADR) under the new ADR Directive[11]. Both types of bodies will closely cooperate (Article 1(15) of the proposal – Articles 16 and 16a of the amended Regulation (EC) No 261/2004).
The NEBs will adopt a more proactive monitoring policy than today and their role will be extended to the monitoring of compliance with the baggage provisions of Regulation (EC) No 2027/97 (and of the Montreal Convention) (Article 2 i of the proposal – Article 6b of the amended Regulation (EC) No 2027/97).
The exchange of information and the coordination between the NEBs, and between the NEBs and the Commission, will be enhanced with reporting obligations and formal coordination procedures (Article 1(15) of the proposal – Article 16b of the amended Regulation (EC) No 261/2004).
Under the proposal, air carriers should inform passengers, at the time of reservation, about their claim and complaint handling procedures, provide electronic means to submit complaints and give information about competent complaint handling bodies. Airlines will be required to respond within a deadline of two months to passengers (Article 1(15) of the proposal – Article 16a of the amended Regulation (EC) No 261/2004).
A limited number of measures aim to reduce the most costly aspects of Regulation (EC) No 261/2004:
· The right to compensation in case of delay will arise after five hours for all journeys within the EU. For journeys to/from third countries, to take into account the particular problems encountered by air carriers to handle causes of delays at remote airports, these thresholds will be made dependent upon the journey distance: 5 hours for extra-EU journeys of 3500 km or less, 9 hours for extra–EU journeys between 3500 and 6000 km, and 12 hours for extra-EU journeys of 6000 km and more (Article 1(5) of the proposal – Article 6(2) of the amended Regulation (EC) No 261/2004).
· In the case of delays and cancellations due to extraordinary circumstances, the air carrier may limit the right to accommodation to 3 nights with a maximum of EUR 100 per night and passenger (Article 1(9) of the proposal – Article 9 i of the amended Regulation (EC) No 261/2004). However, the impact on passengers is mitigated by two additional measures: first, faster rerouting should reduce the risk of passengers being stranded for so long (see above); second, airports, air carriers and other actors in the air transport chain will be required to set up contingency plans to optimise the care and assistance to stranded passengers (Article 1 i of the proposal – Article 5(5) of the amended Regulation (EC) No 261/2004). Furthermore, the limitation in the provision of accommodation does not apply to passengers with reduced mobility (PRMs), those persons accompanying them, pregnant women, persons in need of specific medical assistance and unaccompanied children - provided they have pre-notified the air carrier 48 hours before the scheduled time of departure (Article 1(11) of the proposal – Articles 11(3) and 11 i of the amended Regulation (EC) No 261/2004).
· In view of the specificities of small-scale (regional) operations, air carriers are not compelled to provide accommodation to passengers of flights of less than 250 km on aircraft with a maximum capacity of 80 seats (except on connecting flights). Again, this derogation does not apply to PRM, persons accompanying them, pregnant women, persons in need of specific medical assistance and unaccompanied children (Articles 1(9) and 1(11) of the proposal – Articles 9(5), 11(3) and 11 i of the amended Regulation 261/2004).
· The proposal specifies that national law may not restrict the air carriers' right to seek compensation from third parties responsible for delays or cancellations (Article 1(12) of the proposal – Article 13 of the amended Regulation (EC) No 261/2004).
Taking into account the UN Convention on the Rights of Persons with Disabilities and the Charter of Fundamental Rights (Articles 21 and 26), passengers with reduced mobility should have the same right to free movement, freedom of choice and non-discrimination as other citizens.
The liability of air carriers with regard to mobility equipment will be increased up to the actual value of the equipment. This is achieved, in conformity with the Montreal Convention, by compelling air carriers to automatically offer the option to make a special declaration of interest laid out within the Convention, at no additional cost (Article 2 i of the proposal – Article 6a of the amended Regulation (EC) No 2027/97).
The proposal enhances the transparency with regard to baggage allowances. It explicitly requires air carriers to clearly indicate the cabin and hold baggage allowances, at booking and at the airport (Article 2 i of the proposal – Article 6d of the amended Regulation (EC) No 2027/97).
The proposal includes measures with regard to musical instruments. It compels air carriers to accept small instruments inside the passenger cabin, subject to certain conditions, and to clarify their rules with regard to the carriage of larger instruments in the cargo compartment (Article 2 i of the proposal – Article 6e of the amended Regulation (EC) No 2027/97).
Taking into consideration the strict time limits of the Montreal Convention within which passengers can submit claims for mishandled baggage to air carriers, it is proposed that air carriers issue a claim form at the airport where passengers can complain about delayed, damaged or lost baggage (such as the common Property Irregularity Report or PIR) and then to accept this as a claim for the purposes of Regulation (EC) No 2027/97 and the Montreal Convention (Article 2(1) of the proposal – Article 3(2) of the amended Regulation (EC) No 2027/97).
Under the proposal, the National Enforcement Bodies designated under Regulation 261/2004 will also be responsible for the enforcement of the provisions of Regulation 2027/97 that relate to the rights of passengers with regard to delayed, lost or damaged baggage (Article 2 i of the proposal – Article 6b of the amended Regulation (EC) No 2027/97).
Regulation (EC) No 2027/97, as amended by Regulation (EC) No 889/2002, introduces the Montreal Convention into EU law and extends its scope to domestic flights (in addition to international flights). The Convention sets limits of liability with respect to the carriage of passengers, baggage and cargo, which have been revised upwards by 13.1% with effect from 30 December 2009. The present proposal updates the limits in the EU Regulation to take into account these revised amounts in the Convention (Articles 2(2) and 2(3) and annex 2 of the proposal – Articles 5(2) and 6(1) and the annex of the amended Regulation 2027/97).
The proposal has no implications for the EU budget.