Annual Report 2002—2003 - Air Transport Users Council

The proposal for legislation is highly contentious both in terms of principle and detail.Airlines have argued strongly that the potential costs of the provisions would have to bepassed on to passengers in one way or another, and would far outweigh any consumerbenefits.We have always accepted that we need to take account of the potential cost topassengers of any demands that we make on the industry. But airlines have hadthings their own way for too long, and this proposed Regulation represents a majoropportunity to redress the balance. The proposal was proceeding through the EUlegislative process at the time of writing. We hope to be able to report a positiveoutcome on this proposed Regulation in next year's Annual Report.Airlines' Contracts with PassengersAs far back as our 1996-1997 report, we were welcoming the fact that the EuropeanCommission had issued a tender for a study into airline conditions of carriage (that is,the terms of the contract that passengers enter into when they buy a ticket). We hadrepeatedly pressed the Commission to conduct such an investigation, and weretherefore gratified when the report of the study (published in July 1997) concluded thata number of the terms of these contracts were unfair to passengers.Having received the report and recommendations of the study, however, theCommission decided to stay its hand whilst an International Air Transport Association(IATA) task force reviewed IATA's own Recommended Practice on General Conditionsof Carriage (RP1724) in the light of the report. The AUC accepted invitations to meetwith members of the IATA task force but, despite our best efforts, the changes toRP1724 that were subsequently adopted by IATA did not meet all of our concerns.The Commission nevertheless remained unwilling to consider bringing forward anyproposals for legislation at least until all other avenues for bringing about improvementshad been explored. In particular, it looked to Member States to apply the EC Directiveon Unfair Terms in Consumer Contracts to airlines' contracts with passengers.Therefore, in January 1999, we made a formal complaint to the Office of Fair Trading(OFT) about RP1724. The ensuing discussions between the OFT and IATA resulted ina new version, which was formally adopted by IATA in June 2000 but has still not comeinto effect.Meanwhile, the Commission published its consultation paper and subsequentCommunication on air passenger rights (to which we refer in the introduction to thissection on page 11). Then, in June 2002, it published a further consultation paper, thistime specifically on airlines' contracts with passengers. The paper drew heavily on theconclusions of the Commission's 1997 study and on the work of the AUC, the OFT andIATA.13