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AerospaceMarch2013NEW PROPOSALS FOR AIRPASSENGER RIGHTS ANNOUNCEDThe obligations of carriers to provideassistance and compensation to passengersin the event of delay, denied boarding andcancellation of flights has been a topic ofmuch contention in recent years. Indeed, sinceRegulation 261/2004 (the Regulation) cameinto force in 2005, carriers have struggledto understand the precise scope of theirresponsibilities, a problem exacerbated bythe ambiguous drafting of the Regulation,seemingly arbitrary rulings by the EuropeanCourt of Justice (most notably in the Sturgeoncase) and significant (and unexpected)exposures arising from the volcanic ashchaos of 2010. Passengers have also facedfrustration in seeking to understand (andenforce) their rights under the Regulation.Such difficulties triggered a review of theRegulation by the European Commission,which began in April 2011 and which thisweek has culminated in the announcement ofa package of proposed measures designed toclarify passenger rights in four key areas:1. Clarifying legal “grey areas”The proposals seek to address theuncertainties faced by both passengers andcarriers in understanding the scope of theirrespective rights and obligations, including inrelation to rights to information, the scope ofthe “extraordinary circumstances” defence,and carriers’ obligations in respect of longdelays. Amongst other things, the proposalscall for:• An obligation on carriers to provide onthe-spotinformation about the situationof their delayed or cancelled flight, notlater than 30 minutes after the scheduleddeparture time.• An express definition of the term“extraordinary circumstances”, namelycircumstances which are not inherent inthe normal exercise of the activity of theair carrier concerned and are beyondits actual control, together with expressexamples of such circumstances (which

• The introduction of alternativedispute resolution servicesprovided by complaints handlingbodies.• A requirement that nothingin the Regulation or nationallaws shall prevent carrierswho have paid compensationor provided assistance underthe Regulation from seekingredress against third partieswho have contributed to theevent triggering compensation/assistance.4. Disproportionate financialburdenThe proposals also seek to introducea cap on carriers’ obligations toprovide assistance to passengersin cases of “extraordinarycircumstances”. Such obligations are,under the the Regulation, currentlyunrestricted, regardless of whetheror not delays or cancellations arebeyond a carrier’s control, a situationwhich left many carriers facingconsiderable exposures followingthe 2010 volcanic ash chaos. Theproposals therefore limit passengers’right to accommodation, in cases ofdelays, cancellations or changes inschedule caused by extraordinarycircumstances (subject to a smallnumber of exceptions), to threenights, at a maximum cost of €100per night per passenger.The proposals also lift the obligationto provide accommodation (subjectto limited exceptions) on operatorsof small aircraft (less than 80 seats)offering short flights of less than 250km,on the basis that the burden on suchcarriers to provide accommodationwould be disproportionate to theireconomic strength.Industry reactionThe Commission’s proposalshave immediately been met withdisappointment from the aviationindustry. In particular, IATA hasraised concerns that, whilst someof the proposed changes arepositive (including the clarificationof when passengers are entitled tocompensation for long delays andthe caps on assistance in casesof e.g. ash cloud disruption) thereare still “major deficiencies” in theproposals. In particular, IATA hassuggested that many of the changeswill be difficult for governments toenforce and will add unnecessarycosts. Specific examples of suchshortcomings identified by IATAinclude:• The proposed measuresin respect of connectingflights place the burden forcompensation for delays onthe operator of the first flight,in circumstances where theMontreal Convention regimealready sets out rules on theallocation of liability betweencarriers in such cases (as dostandard “interline” agreements).IATA fear that the proposalsregarding connecting flights mayalso deter European carriersfrom offering connections tolong-haul destinations.• The proposal to treat a diversionas if it were a cancellation willpotentially trigger significantmonetary compensation topassengers, notwithstandingthat the majority of diversionsare made for safety or medicalreasons (and applicableexceptions may not provideadequate protection).What happens next?The proposals are still at the draftstage and have now been passedto the European Parliament andCouncil for review and possibleamendment. It is hard to tell whenthe proposals will be finalised andcome into force, albeit this is notexpected to happen before 2014.It is also uncertain as to whatextent the proposals will be subjectto further change, in the face ofcriticism from the industry, althoughwholesale changes are unlikely.Carriers will no doubt be watchingthe progress of these proposals withgreat interest.Further information on the proposalscan be found on the EuropeanCommission’s website (http://europa.eu/rapid/press-release_MEMO-13-203_en.htm).For more information, please contactSue Barham, Partner, on +44 (0)207264 8309 or sue.barham@hfw.com,or Pierre Frühling, Partner, on +32 (0)2643 3406 or pierre.fruhling@hfw.com,or Mark Waters, Associate, on+44 (0)20 7264 8275 ormark.waters@hfw.com, or your usualHFW contact.Aerospace 03

Lawyers for international commerceHOLMAN FENWICK WILLAN LLPFriary Court, 65 Crutched FriarsLondon EC3N 2AEUnited KingdomT: +44 (0)20 7264 8000F: +44 (0)20 7264 8888© 2013 Holman Fenwick Willan LLP. All rights reservedWhilst every care has been taken to ensure the accuracy of this information at the time of publication, the information is intended as guidance only. It should not beconsidered as legal advice.Holman Fenwick Willan LLP is the Data Controller for any data that it holds about you. To correct your personal details or change your mailing preferences pleasecontact Craig Martin on +44 (0)20 7264 8109 or email craig.martin@hfw.comhfw.com

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