Tuesday, 5 June 2012

The New Myth: Air Passenger Rights cause safety risks

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In a recent Dutch report ‘experts’ argue that European Air Passenger Rights cause dangerous situations. Their ‘evidence’? One example that does not prove anything. Their only purpose seems to scare off passengers by using nonsensical arguments. Here is the example (Dutch original, p. 32-33, my translation):

The departure of a Boeing 747, bound for the US West coast, was delayed because of a damaged cargo hold that had to be repaired for safety reasons. During the flight the headwind appeared to be much stronger than predicted so more fuel was used than planned for. The flight reached a stage for which the handbook advises to make an unplanned refuel stop. The plane could have continued its journey and would possibly not have gotten in an emergency situation (definition: at landing less than enough fuel to fly for half an hour) when landing at the airport of destination. The airline put pressure on the captain to continue the journey but he decided to make a stopover, which led to two hours extra delay. This caused a total delay of 8 minutes over the limit for a claim.

Such a claim was indeed submitted by four passengers. If awarded the fine (sic) would be 4 times 600 makes 2400 euro. However, in principle, all 400 passengers could have claimed, with potentially a total amount of 240,000 euro. This knowledge has, of course, an impact on considerations in marginal situations where enough pressure exists, see the case above, to choose the cheapest option.

The example raises a number of questions.

1. It suggests that we are still living in the early days of flying and that a plane needs to make several stops to get to a far-away-destination. However, nowadays a long haul airliner can fly between 9,500 and 17,500km non-stop. A flight from (say) Amsterdam to (say) San Francisco is 8,740km. Hence, with full fuel tanks the destination can be reached without any problem. Of course, this would not be safe and efficient so airlines decide on the basis of several data how much fuel will be needed so that the destination is reached with a safe fuel level (neither too much, nor too little). Considering the high fuel prices, this means that to a great extent the airline's decision about the amount of fuel is a commercial decision. Therefore, it is this decision, and not any Air Passenger Right, that may cause a necessary stop to refuel, as well as the subsequent delay and any safety concerns.

2. The example suggests that flying with a safety risk is a cheaper option than possibly having to pay compensation for delay. That is rubbish. The risk of having to pay compensation for delay is always lower than the risk of an accident. Hence, the safest option is always the cheapest option. If all 400 passengers claim compensation for delay (a theoretical possibility), this might cost the airline € 240.000 (but it will boost customers’ confidence in the airline). The alternative is that 400 passengers might be killed. This would cost the airline at least € 240.000.000, leaving aside the huge additional damage to brand and reputation. Could it be that airlines may underestimate the latter risk because it is insured whereas the former is (probably) not?

3. It would be interesting to know which airline puts its captain under pressure to continue the flight despite safety concerns. In most countries such conduct amounts to a criminal act (it may very well be that the incident never happened but was simply made up to make a case against air passenger rights - so much for the reliability level of the report).

4. The key rule in flying is that it is the captain and the captain only who takes decisions about the airplane from before departure until after arrival. Compensation concerns must not be of any concern to the captain. And he or she must not in any way be influenced by the airline. An airline that nonetheless does so or tries to do so should be blacklisted.

5. One of the ways to implement this key rule is for the airline to take out insurance for the risk of having to pay compensation. This can be done through an insurance company or captive insurance. It implies that the management of the compensation risk is moved to a third party that is at arm’s length of day-to-day operations. This may help the airline to link the compensation risk to the sum of its operations, rather than to one flight. It may also help to put the airline’s focus on structural rather than incidental measures to limit the compensation risk.


6. It is worrying that these so-called ‘experts’ provide the Dutch government with such poor advice. Their only aim seems to be to echo the airline lobby by unfoundedly putting air passenger rights in a bad light.

7. Finally, the DEGAS report makes an interesting observation: ‘Unlike often assumed, safety can of course never be the first priority.’ Hopefully, the authors meant to say that safety can never be an absolute priority. Obviously, safety must always be the first priority and, fortunately, for most airlines it is.


By the way: at the Thames Diamond Jubilee Pageant, the Duchess of Cambridge looked splendid in her Air Passenger Rights dress.

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Know your Air Passenger Rights when you need them
Air Passenger Rights Book --- Air Passenger Rights App --- Passagiersgids
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4 comments:

  1. As I read the EU passenger rights it is the obligation of the operating airline or carrier to offer the compensation without demand from the passengers. Therefore i can´t see how the compensation claims can be considered to be indivduel claims as all passengers on the same flight have been subject to the same inconvienience that is compensated.

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  2. Besides my view point, it is a great article and shows the airlines will keep on trying to harras the passenger rights.

    Is it possible to give more information on the airlines possible insurance to take over the compensation claims ?

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  3. EC Regulation 785/2004 requires air carriers to insure their aviation-specific liability in respect of passengers, baggage, cargo and third parties. Although the Regulation refers to the air carrier’s Montreal liability, the wording of Article 4 of this Regulation is very general so may be interpreted as to include the Regulation 261/2004 liability.

    I have no doubt that the Regulation 261/2004 liability is insurable, particularly because the amounts are low and the frequency of the risk is foreseeable and calculable. Whether air carriers in fact insure these risks is unclear because they usually do not disclose this information.

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  4. You have shared a great information about All Risk Insurance and Business Travel.
    Which are very informative for us.Thanks

    ReplyDelete