Airlines subject to new EU Regulations

Airlines are now subject to new obligations relating to overbooking, flight cancellations and long delays. The new passenger rights enter into force on 17 February. The new regulation applies to all flights departing from the EU as well as to those flights operated by EU airlines whose destination is in the EU.

Events resulting in compensation are often connected with flight cancellations and long delays. The regulation now entering into force obliges all airlines to take care of their passengers if a schedule flight departure is delayed. It also gives passengers the option of cancelling their journey completely if their flight is delayed by more than five hours. If a journey is made pointless because of a long delay, the price of the ticket will be refunded if the passenger so chooses.

The regulation defines a clear course of action in the event of flights being cancelled. If the cancellation of a flight occurs less than seven days before departure, the airlines may have to pay to passengers a one-off compensation payment, as defined separately. Airlines will not be liable to pay compensation if the reason for the cancellation is 'force majeure' as far as the airline is concerned. Such reasons are factors relating to safety, the state of the weather, aircraft technical faults, alterations to aircraft movements due by exceptional situations, air space restrictions as well as possible consequential effects resulting from these factors.

The new EU regulation specifies a compensation payment of double the current sum in overbooking situations. One European airline, Finnair, said it would offer its passengers the alternative compensation specified in the regulation and will enhance further measures to prevent overbooking arising. The number of overbooking situations has been growing, because an increasing number of passengers are leaving their reserved flight seats unused.

Owing to the current decline in flight prices and increasing cost levels, many airlines have opposed the new regulation because of the cost pressures it imposes. Attempts have been made to postponed the regulation's entry into force and measures to possibly cancel the regulation are under way. The regulation may have the greatest impact on low-cost airlines, which have minimised responsibility issues.