House of Commons - Transport

Select Committee on Transport Eighth Report

8 Complaints and compensation

Air Transport Users' Council

146. When things do go wrong for the air passenger, it is not clear that people are aware of who they can complain to and what, if any, assistance or compensation they may be entitled to. As outlined earlier in this report, the Air Transport Users' Council (AUC) is the consumer body for air passengers. Its website is buried away on the larger Civil Aviation Authority website and we are not convinced that it is especially well publicised. Ms Tina Tietjen, Chairman of the AUC, told us that the organisation attempts to be "reasonably well publicised" but that it "could perhaps have a higher profile".[206] Ms Tietjen and her colleague could only think of one major airline that publicised the organisation on its website - Flybe.[207] This is not surprising, there is little incentive for airlines to publicise an organisation for passengers to go to if they wish to complain or seek compensation. It would appear that most people find the AUC via a more generic consumer organisation like the Citizens' Advice Bureaux.[208]

147. The Air Transport Users' Council does a fine job with limited resources and what appears to be no advertising budget. We recommend that the CAA look at devising some kind of cross-subsidy for the Council from airport and airline fines for poor performance and that the Council does more to advertise itself.

EU Directive on Denied Boarding, Cancellation and Compensation

148. EU Regulation EC 261/2004 on denied boarding, cancellation and compensation was ratified by both the Council and the European Parliament in January 2004 and came into force on 17 February 2005.[209] Under the Regulation travelers flying from an EU airport are entitled to the following where their flight has been delayed:[210]

Distance of flight Length of delay Assistance

All flights Overnight and more than 5 hours Meals and refreshments in relation to waiting time; two free phone calls, emails, telexes or faxes; hotel accommodation and transfers; and reimbursement of ticket (if passenger decides not to travel).

More than 5 hours Meals and refreshments in relation to waiting time; two free phone calls, emails, telexes or faxes; and reimbursement of ticket (if passenger decides not to travel).

Over 3,500km More than 4 hours Meals and refreshments in relation to waiting time; and two free phone calls, emails, telexes or faxes.

1,500-3,500km More than 3 hours

Up to 1,500km More than 2 hours

The provisions relating to cancellation vary according to how far before departure the cancellation occurs. However, if it is within 14 days of the date of travel the compensation available is the same:

Length of journey Delay to destination Compensation

Up to 1,500km Up to 2 hours €125

More than 2 hours €250

1,500km to 3,500km Up to 3 hours €200

More than 3 hours €400

More than 3,500km Up to 4 hours €300

More than 4 hours €600

In cases where the flight is cancelled more than 14 days before departure, no financial compensation is available. The AUC estimates that the Regulation is responsible for a four-fold increase in complaints.[211]

149. The European Commission recently undertook a review of the operation of Regulation 261/2004 and reported its findings to the European Parliament and Council in April 2007. The Commission concluded that there are two main reasons why there have been difficulties with the Regulation: "imprecise text in the Regulation in certain areas" and "ineffective enforcement in some Member States".[212]

'Extraordinary circumstances'

150. Under all circumstances, the airline is not obliged to pay compensation if it can prove that the cancellation was caused by 'extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken'. Such extraordinary circumstances might occur 'in cases of political instability, meteorological conditions incompatible with the operation of the flight concerned, security risks, unexpected flight safety shortcomings and strikes that affect the operation of an operating air carrier'.

151. The AUC told us that airlines are routinely citing the 'extraordinary circumstances' defence in the Regulation to avoid paying compensation for cancellations in addition to looking after passengers (through provision of meals and hotel accommodation etc) whilst they wait for alternative flights. The lack of definition of some key terms in the Regulation has also led to significant differences in interpretation of airlines' obligations.[213] A Danish citizen has brought a case before the European Court of Justice regarding the scope of the 'extraordinary circumstances' exclusion.[214]

152. We are disappointed that airlines are routinely using the 'extraordinary circumstances' clause as a means of avoiding paying compensation to passengers for cancelled flights. We are not, however, surprised given how poorly drafted the Regulation is. We hope that the challenge to the wording in the European Court of Justice will produce a precise interpretation that will mean that airlines can no longer blame nebulous external factors.

CAA prosecution powers

153. The CAA can prosecute UK airlines for non-compliance with the EC Regulation.[215] The CAA told us that while it is prepared to use these powers when appropriate, it considers that this should be very much a last resort, not least because enforcement action itself would not help consumers get their rights. Mr Richard Jackson, Group Director of Consumer Protection at the CAA, explained that prosecution is better used as a threat.[216]

154. The CAA's enforcement action has focused on improving the extent to which carriers meet their obligations under the Regulation. Examples of the CAA's enforcement action to date include:

requiring air carriers to address cases of non-compliance by payment of compensation where appropriate;
requiring carriers to amend their websites, guidance and procedures to ensure compliance with the Regulation going forward; and
meeting with the Directors of air carriers to discuss specific areas of non-compliance and ensure correction.[217]

The CAA is also working to ensure that there is effective cross-border cooperation with other Member States on enforcement of the Regulation.[218]

Information from the European Commission

155. When Regulation EC 261/2004 came into force in February 2005 it was accompanied by inaccurate reporting of the new entitlements, a consequence largely of the misleading information on the European Commission's website and posters and in its information leaflets which were widely distributed. Mr Evans of the AUC told us that this information led people to believe that they could get compensation that they were not entitled to.[219] ABTA agreed that the Commission had handled the situation badly.[220] The Commission refused to withdraw its misleading information until the European Ombudsman found against it in January 2007 in response to a complaint from airline trade associations.[221]

156. We note that the recent review by the European Commission of its compensation Regulation failed to mention the Commission's own incompetence when drawing up advertising and publicity for the Regulation. An error when drawing up these materials may be excused, but the refusal to withdraw them once the error has been brought to your attention is inexplicable. It is disgraceful that European taxpayers' money has been wasted forcing the Commission to withdraw materials that were inaccurate and misleading to the public. We commend our own Government and the Civil Aviation Authority for bringing the inaccuracies to the Commission's attention and recommend that, in future, the Commission pay more attention to them.

206 Q7 Back

207 Q8 Back

208 Q10 Back

209 in force in the UK from 23 April 2005 under the Civil Aviation (Denied Boarding, Compensation and Assistance) Regulations 2005 (SI 2005/975) Back

210 the following taken from information on the AUC website Back

211 Q6 Back

212 COM(2007) 168 final, 4 April 2007, p11: http://ec.europa.eu/transport/air_portal/passenger_rights/doc/2007/com_2007_0168_en.pdf Back

213 Ev 98 Back

214 http://eur-lex.europa.eu/LexUriServ/site/en/oj/2006/c_294/c_29420061202en00290030.pdf Back

215 Maximum penalty is a fine of £5,000 Back

216 Q765 Back

217 the CAA currently has 26 cases where they are pursuing these remedies, of these 26 the authority has 'resolved' 17 (Q766) Back