On 17 February 2005, Regulation 261/2004 came into force in the European Union (then EC). This Regulation was designed to provide passengers with more rights against airlines in cases of delay, cancellation and denied boarding of their flight.
In short: in case of cancellation or denied boarding the Regulation provides that a passenger is entitled to care (e.g. meals and refreshments), reimbursement or rerouting, and depending on the distance to the destination, a compensation of €250, €400 or €600. In the case of a substantial delay, the passenger is, according to the Regulation, entitled to care (the level depending on the number of hours delayed) and in case of more than five hours’ delay, reimbursement. In case of extraordinary circumstances beyond the control of the airline, the airline is exempted from the obligation to award compensation.
At first sight, it would seem that everything is nice and clear, no problem in sight!
However, since its adoption the Regulation has been subject to quite some questions and criticism, as will be demonstrated by means of the Sturgeon & Nelson cases, as well as the issue of the Exclusivity of the 1999 Montreal Convention.
Delay vs. cancellation
Due to the fact that compensation for cancelled flights was much higher than that for delayed flights, the coming into force of the Regulation led to a situation whereby airlines were inclined to ‘delay’ flights for e.g. 20 hours instead of cancelling them, and the question arose “what is a delay?,” and, “when does a delay become a cancellation?“ Via national courts these questions found their way to the Court of Justice of the European Union (CJEU).
Sturgeon & Nelson cases
In the so-called Sturgeon case (2009), the CJEU in its preliminary ruling ruled that for flights delayed for more than three hours, the same compensation scheme had to be applied as for cancelled flights. This ruling has been confirmed by the Nelson case (2012), and was based on the application of the equal treatment principle between delayed passengers and passengers whose flight had been cancelled, as well as on the proportionality principle: the CJEU found the provisions in line with the objectives.
The CJEU has been criticized widely for this ruling, because it has given its own interpretation to Regulation 261/2004 and therefore created new law, instead of redirecting the Regulation back to the EU Council and Parliament, which would have been the appropriate course of action if the Court deemed the provisions of the Regulation inadequate.
Exclusivity of the Montreal Convention
Another point of criticism has been the infringement of the exclusivity of the 1999 Montreal Convention: all EU Member States, as well as the EU itself, are party to the Montreal Convention. This convention deals with liability of airlines towards their passengers in case of death, bodily injury, damage or delay. Article 29 of this Convention provides that the Montreal Convention is an exclusive ground of action. By addressing delays, and by providing compensation schemes for damage resulting from delays, the EU Regulation infringes on the exclusivity of the Montreal Convention. The CJEU has been creative in its reasoning to refute this accusation: it argues that loss of time is not damage, but an inconvenience, which does not fall under the scope of the Montreal Convention. The obligation to compensate passengers for delays as such is therefore not contradictory, but additional to the obligations under the Convention.
Well, that’s a nice try, but from my point of view delay remains delay, and falls under the scope of Article 29 of the Montreal Convention, the last sentence of which states that non-compensatory damages are not recoverable. Apparently, the CJEU tries to justify the infringement of the Montreal Convention by distinguishing between damages and damages. Can you still follow...?
Some food for thought on your next €200-seven-hours-delayed-flight to Barcelona or Rome!