| Around quarter of a million people a year in Europe are bumped off their flights with scheduled EU airlines. The European Community has now tightened up its 1991 legislation on compensation and assistance for such passengers in a bid to dissuade airlines from excessive overbooking, while recognising that the practice cannot be eliminated altogether. The European Parliament helped ensure that airlines will also have to do more for the comfort of passengers stranded at airports because of cancellations and long delays.
The new legislation, set to come into force in February 2005, lays down EU-wide rules on compensation and assistance to air passengers in three situations: "denied boarding" (essentially caused by airlines overbooking their flights), flight cancellations and long delays. The new rules cover non-scheduled (charter) flights, including those sold as part of a package holiday, as well as scheduled flights. And they apply not just to passengers departing from an EU airport but also to those travelling to the Community from a non-EU country on a flight operated by a Community air carrier.
Volunteer schemes for passengers bumped off flights
The number of passengers denied boarding against their will (or "bumped off" their flight) is set to be reduced by using a new approach based on the highly successful US "volunteer scheme". When an airline expects to bump passengers off, it must first call for volunteers to surrender their reservations in exchange for money or other inducements to be agreed between the passenger and the air carrier. Over and above these inducements, volunteers must be offered a choice between a refund of the full cost of their ticket (plus a return flight to the first point of departure) or an alternative flight to their destination (known as "re-routing"). Only if insufficient volunteers come forward will the airline be allowed to deny boarding to passengers against their will. It must then give priority to boarding the elderly and the disabled and anyone accompanying them, as well as unaccompanied children.
Compensation for non-volunteers
Passengers who are denied a place on their flight against their will are suffering more than volunteers and should therefore not be dependent on the level of inducements an air carrier is prepared to offer. Instead, they will be entitled to fixed rates of compensation, which should deter airlines from indulging in too much overbooking.
When it first started negotiating the new rules with the Council of Ministers at the end of 2001, the European Parliament had two main aims: to bring the proposed legislation into line with the real needs of passengers and to take account of commercial realities for air carriers. Overbooking cannot be eliminated completely, as airlines need to make sure that their planes are as full as possible in order to be profitable. They therefore have to forecast the likely number of passengers who will not turn up for a given flight ("no-shows") and then accept more reservations up to the plane's capacity. If they could not overbook, they would be left with too many empty seats, their revenue and profits would fall and they would be forced to raise fares.
MEPs felt that the fixed compensation rates originally set by the Commission (twice the average business class fare for intra-European flights) would impose too great a burden on airlines, which were already experiencing difficulties in the wake of the September 11 attacks in the USA. The proposed rates were 750 euros for flights of less than 3500 km and 1500 euros for flights of 3500 km or more. Parliament persuaded the Council to reduce the rates and introduce a three-band system for compensation which is more in line with the reality of European flights: 250 euros for flights of less than 1500 km; 400 euros for intra-Community flights of more than 1500 km and for all other flights of between 1500 and 3500 km; and 600 euros for all remaining flights. It hoped that compensation at such levels would prompt air carriers to calculate their overbooking margins more carefully while still not jeopardising their profitability. Parliament also managed to ensure that the rules would come into force nine months later than originally proposed, thereby giving airlines more time to adapt.
Passengers who are denied boarding against their will must not only be compensated at these fixed rates but - like volunteers - must also be offered the choice between a refund plus a return flight to the first point of departure or re-routing. However, if passengers can be offered alternative flights enabling them to arrive at a time close to their original schedule the compensation rates may be reduced.
Lastly, travellers will be entitled to "assistance" in the form of meals and refreshments, two free phone calls, faxes or e-mails as well as hotel accommodation and transport between the airport and hotel if an overnight stay is needed.
Softening the blow of cancellations
Cancelled flights are another unpleasant surprise that sometimes awaits air travellers. Under the new legislation, passengers whose flights have been cancelled for commercial reasons will be entitled to refunds or re-routing and also to compensation on broadly the same terms as victims of denied boarding. However, compensation will not be provided if the cancellation is due to unavoidable circumstances such as political instability, severe weather conditions or unexpected safety failures. And if the passengers are notified of the cancellation two weeks in advance or offered alternative flights the compensation rule will also not apply.
The Commission originally proposed restricting passengers' rights to refunds or re-routing to cases where flights are cancelled for commercial reasons. Parliament changed the legislation so that, whatever the reasons for cancellation, travellers will be entitled to a refund or re-routing - plus meals, refreshments and other assistance.
Easing the frustration of delays
One final scourge of air travel - delayed flights - is also dealt with by the new legislation. MEPs acknowledged that airlines are not usually responsible for delays, which are generally caused by air traffic control problems and other mishaps. But they felt that passengers should be properly looked after if they have to endure long waits at airports when flights are delayed. Thanks to their efforts, the legislation includes provisions entitling passengers to meals, refreshments, phone calls - and even hotel accommodation in some cases - in the event of delays of two hours or more, depending on the distance of the flight. And when the delay is at least five hours, passengers will be refunded the full cost of their ticket and, if appropriate, flown back to the initial point of departure at the earliest opportunity.
Business needs reconciled with consumer protection
Overall then, the new law attempts to strike a balance between allowing the air industry to operate in a competitive business environment, while at the same time ensuring that passengers receive a quality service and are compensated for any inconvenience and discomfort caused by a failure to deliver that service. MEPs also extracted a pledge from the Commission that it would propose similar measures in the future for other modes of passenger transport such as rail and shipping.
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