Low cost airlines warned of ‘massive financial burden’ of passenger compensation

Low cost airlines could face a massive financial burden if the European Court of Justice upholds a judgement allowing passengers delayed by three or more hours to have a right to compensation, according to a UK law firm.

Speaking at the recent ABTA (Association of British Travel Agents) Travel Law Seminar, Joanna Kolatsis, a partner at law firm Gates and Partners, told delegates that the effect of providing compensation in event of delay will impose a massive financial burden to carriers.

In May the European Court of Justice Advocate General Yves Bot said that passengers suffering delays of three hours or more are entitled to compensation, confirming a European Court decision of 2009. This opinion isn’t binding, but it is an independent opinion given to the Judges of the Court, who are now beginning to deliberate the issue. Airlines, including easyJet, have launched legal challenges against the original decision. However if the final judgement is to still uphold the decision, claims could be backdated as far as 2005.

A statement from the Court said that Advocate General Bot “considers that the airlines have put forward nothing new which might call into question the interpretation of EU law that the Court gave in Sturgeon. There is therefore no reason why the Court should reconsider its interpretation. That interpretation is based, amongst other things, on the very objective of the European legislation, which is to ensure a high level of protection for air passengers regardless of whether they are denied boarding or whether their flight is cancelled or delayed, since they are all caused similar serious trouble and inconvenience connected with air transport.”

Advocate General Bot’s opinion means passengers whose flights are delayed have the right to compensation when they reach their final destination three hours or more after the arrival time originally scheduled. Compensation can be up to 600 Euros, although isn’t payable on ‘extraordinary circumstances’.

Now, Kolatsis said, it is feared the European Court of Justice will permit compensation when there is a delay.