Good tidings: airline bites the dust before Court of Appeal Amsterdam

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On 6 December 2011, the Amsterdam Court of Appeal confirmed that Sturgeon is good law. It considered that there was no reason to ask the ECJ preliminary questions or to stay the proceedings and it awarded the passengers’ claim for compensation.

It did so in a case brought by China Southern Airways against EUclaim, the Dutch-based company that handles claims based on EU Regulation 261/2004 on Air Passenger Rights.

The case was about a couple and their son who had booked a flight Amsterdam-Beijing from tour operator Kuoni. The flight was to be carried out by China Southern Airlines. However, a technical problem with the aircraft caused the family to arrive in Beijing with a delay of over 24 hours. The three passengers transferred their claim of € 600 compensation per person to EUclaim on a no cure no pay basis.

In July 2010, the Dutch first instance judge considered that the ECJ’s Sturgeon decision is valid and it awarded the claim for compensation. The airline lodged an appeal with the Amsterdam Court of Appeal where it sang the chorus most airlines have been singing over the past two years. So here we go again: the airline argued that the ECJ’s Sturgeon decision is invalid, that the Court of Appeal should ask the ECJ preliminary questions and if it was not prepared to do so stay the proceedings until the ECJ has answered the pending preliminary questions regarding Sturgeon.

Like virtually all Dutch first instance judges, the Amsterdam Court of Appeal was not impressed by the airline’s arguments. It considered that the ECJ’s case law has been consistent from IATA to Sturgeon and that there are no indications that the ECJ will change its mind. It went on to refute the airline’s point of view with the same arguments I set out in my article in Air & Space Law. It did not come as a surprise that the Court concluded it saw no reason to ask the ECJ preliminary questions. 

The decision is a major boost for passengers and for claim handler EUclaim who are now able to bring thousands of claims against the airlines, backed by this Court of Appeal decision. 

At the same time, the decision is another blow for the airlines. This is the first time a Dutch Court of Appeal decides a Sturgeon case as a matter of principle and considers Sturgeon valid. The airlines are becoming more and more desperate and indeed China Southern Airlines has decided to bring the case before the Dutch Supreme Court (Hoge Raad). The Supreme Court will deal with this appeal, together with a number of similar appeals, in the spring of 2012. This may sound like a cliffhanger, but even the airlines know that it is not. Story to be predictably continued.

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European Commission updates airlines blacklist

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This week, the European Commission published its updated black list of carriers that are banned from flying to and from an EU airport.

When you have booked a European flight (Air Passenger Rights, p. 13) and your carrier appears to be on the black list, you find your rights in Air Passenger Rights, p. 105.

If an airline is not on the list, this does not necessarily mean that it meets the applicable safety standards.

Also note that passengers are not banned from flying with airlines that are on the list.

See for the complete list:

http://ec.europa.eu/transport/air-ban/doc/list_en.pdf.

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The European Court on hotels, meals, and taxi costs (Rodriguez II)

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In my previous blog post (21 October 2011), I discussed the first part of the European Court’s decision in Rodriguez. In the second part the Court confirmed the airline’s duty to reimburse passengers for the costs of meals, hotels, and taxis.

It follows from the first part of the Court’s decision that the Air France flight from Paris to Vigo was cancelled. Something no one doubted apart from Air France and some French and British government officials in their pleadings before the European Court.

Fixed compensation

In case of cancellation a passenger is entitled to a fixed amount of compensation (€ 250 for this flight of under 1.500 km), unless the cancellation is caused by extraordinary circumstances (Air Passenger Rights, p. 35-37). Whether this was the case with respect to the Air France flight is for the referring Spanish court to decide.

Assistance: meals and hotel

In case of cancellation, a passenger is always entitled to assistance, such as meals and hotel accommodation, regardless of the reason for the cancellation. Air France breached its obligations under the Regulation by failing to provide passengers with meals and hotel accommodation. When passengers later asked Air France to reimburse them for the costs they had incurred, the airline refused to do so. In Rodriguez, the Court confirmed that Air France was wrong. If the airline fails to provide assistance, it must compensate passengers for the costs they incurred for hotel and meals (Air Passenger Rights, p. 33). If the passenger is also entitled to fixed compensation (here: € 250), the reimbursement comes on top of this.

Re-routing and taxi costs

In case of cancellation a passenger is always entitled to either a re-routing or a refund. If the passenger is re-routed to a different airport, he is also entitled to a free transfer to the original destination (Air Passenger Rights, p. 30-32). In the Air France case, three passengers were rerouted to Oporto and had to take a cab to Vigo (90 miles). The airline refused to pay for the costs of the cab (€ 170). In Rodriguez, the Court confirmed that Air France was wrong: it must reimburse passengers for these costs. If the passenger is also entitled to fixed compensation (€ 250), the reimbursement comes on top of this.

Compensation for spending the night at the airport

If a passenger is not offered hotel accommodation and he is not able to find it himself, he has no choice but to spend the night on a cold airport floor. This experience comes for free so he has no expenses to claim from the airline. In such a situation only the passenger feels the pain (non-material damage), not the airline.

The problem is that the Regulation does not provide for a remedy for this airline’s breach of European law. However, the Court confirmed that the passenger can claim compensation on the basis of his national law or the Montreal Convention (see the European Court in Walz). Not all national laws provide for compensation for non-material damage. But in such a case it may very well be that European law requires the national law to be interpreted in such a way that it provides a real and effective remedy (compensation for the passenger) for the airline’s breach of European law.

Alternatively, in the forthcoming review of the European Regulation, the European Commission could consider proposing a right of passengers to claim € 200 compensation for each night the airline fails to provide hotel accommodation to encourage airlines to respect the passengers’ right to assistance.

Article 12 European Regulation

The Court also explained Article 12, one of the more opaque provisions of the Regulation. It runs as follows: ‘This Regulation shall apply without prejudice to a passenger's rights to further compensation. The compensation granted under this Regulation may be deducted from such compensation.’

The Court said that Article 12 allows the national court to order an airline to pay a passenger compensation for breach of contract on another legal basis than the Regulation. This ‘other legal basis’ may be the Montreal Convention or national law. Compensation on the basis of the Regulation may be deducted from compensation on the basis of Montreal or national law.

What does this mean in practice? Claims for reimbursement of costs a passengers makes for hotels, meals, and taxis (Article 8 and 9 Regulation) always come on top of the fixed compensation (Article 7 Regulation). Claims for other damage based on Montreal or national may (not: must) be set off with the fixed compensation.

And what about the claim for spending the night at the airport? This would be a claim under Montreal or under national law and such a claim may be set off with the fixed compensation of the Regulation. However, it is unlikely the courts will do this because this claim is so strongly related to the breach of Article 8 of the Regulation that offsetting would be unreasonable.

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The European Court on: ‘When is a flight cancelled?’ (Rodriguez I)

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In my first posts on this blog, I discussed the Advocate General Sharpston’s Opinion in the Rodriguez case (29 June, 1, 3, and 8 July). On 13 October 2011, the European Court followed her Opinion, thus further clarifying and strengthening the rights of air passengers. The Court's decision concerns two topics: cancellation (this post) and compensation (next post).

The case was about an Air France flight from Paris to Vigo (Spain) that took off as planned, but returned to Paris a short time later due to a technical problem. The plane did not proceed any further and all passengers were rebooked onto alternative flights, most on flights that only departed the following day. Air France did not offer the passengers meals or hotel accommodation. Some of the passengers were rebooked on a flight to Oporto and had to take a cab to Vigo (90 miles). The airline refused to pay for the costs of the cab (€ 170, £150).

Passenger: My flight was cancelled and I need a hotel room for me and my two children.

Air France: Je suis désolé, but your flight was not cancelled.

P: Excusez-moi? Our flight returned to the airport and here we are again!

AF: This doesn’t mean your flight was cancelled.

P: Why not?

AF: Because the flight took off.

P: Yes, but we're back and didn’t get to our destination.

AF: Madame, the European Regulation only requires us to get you in the air, not to get you to your destination. And, à propos, did we ever say the flight was cancelled?

P: But if it wasn’t cancelled, then what the hell was it?

AF: I don’t know. That’s not my business. My business is to reject passenger claims.

P: So you don’t offer us accommodation for the night?

AF: Of course I do. This wonderful airport is all yours so please find yourself a nice spot on the floor. I’m sure your children will love it.

In short, Air France argued that a flight could only be cancelled if it did not take off at all. As the flight did take off, the airline said it was not obliged to assist or compensate the passengers under the European Regulation.

In the European Court, it was not Air France that argued its case because it was late with submitting its observations. Their interests were duly represented by ... the French and British governments. In the European Court, governments often act as lobbyists for their national airlines, identifying them with their ‘national interests’, and consequently considering consumer rights as not being in the national interest.

Not surprisingly, the European Court wiped the floor with the airline’s/governments’ arguments. It said that a flight is not only cancelled if the aircraft fails to take off at all, but also if the aircraft takes off but, for whatever reason, returns to the airport of departure where the passengers are transferred onto other flights.

How did the Court reach its conclusion? The Regulation defines a cancellation as ‘the non-operation of a flight which was previously planned and on which at least one place was reserved’. This definition begs the question what the term ‘flight’ means. When can you speak about the non-operation of a flight?

The Court answered this question in two steps. First, it repeated that a flight consists of air transport performed by an airline that fixes its itinerary (Emirates Airlines, paragraph 40). Second, it recalled that the itinerary is an essential element of the flight, as the flight is operated in accordance with the carrier’s pre‐arranged planning (Sturgeon, paragraph 30).

The Court then considered (par. 28) that ‘itinerary’ means: the journey to be made by aircraft from the airport of departure to the airport of arrival according to a fixed schedule. So, for a flight to be operated the aircraft must have left in accordance with the scheduled itinerary and have reached its destination as appearing in the itinerary. If the latter is not the case, the flight cannot be considered as having been operated. A decision of the airline to cancel the flight is not necessary. For a flight to be cancelled, it is sufficient that the passenger’s original flight planning has been abandoned.

This implies that the focus must be on the predicament of the individual passenger, not on the predicament of the aircraft (oops, not exactly the way many airlines tend to think). 

The Court’s decision also implies that the passengers’ flight was cancelled so they were entitled to meals and a hotel, regardless of the reason for the cancellation (Air Passenger Rights, p. 33).

The reason for the cancellation is only relevant to determine a passenger’s right to compensation (€ 250 for this short haul flight). A passenger is not entitled to compensation if the airline proves that the cancellation is caused by extraordinary circumstances (Air Passenger Rights, p. 35-37). It is now for the referring Spanish court to decide on the facts whether this was the case for the cancelled Air France flight to Vigo.

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Relationship between managers and common sense: it’s complicated

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At Amsterdam Schiphol airport, a woman and her husband check in for their flight to Athens. After going through security and some shopping they cheerfully make their way to the departure gate. Just before boarding they are suddenly stopped by a bright blue KLM uniform: ‘I’m terribly sorry but the flight is full. You cannot board.’

The couple is flabbergasted. It’s like having ordered dinner at a restaurant and seeing the waiter arriving with two empty plates, saying something like: ‘I’m terribly sorry but we just found out we have run out of food. Would you mind very much if I bring your coats?’

At Schiphol the couple is trying to get to grips with the situation when they see another bright blue uniform moving into their direction. Its voice says:

‘I have wonderful news for you.’

The couple doesn’t know what to think of this.

‘We managed to find a free seat in the business class.’

The uniform smiles brightly and looks as if she has just saved the couple’s life.

‘So, if I may ask, whom of you is going to fly?’

Did we hear this correctly? Let’s listen again: 
‘I have wonderful news for you. The chef had another look in the kitchen and found food for one person. So, if I may ask, which one of you can I serve dinner tonight?’

At the airport, the bright blue uniform is starting to lose its patience.

‘I’m terribly sorry but the plane is ready to depart, so can you please make up your mind? No worries, the person who stays in Amsterdam will be all right because my manager has kindly agreed to offer you a rebooking for tomorrow and a hotel room for tonight. All free of charge.’

But the couple shows itself to be passengers of a very ungrateful nature. ‘Actually,’ they say, ‘we would like to stay in Amsterdam together and fly together to Athens tomorrow.’

The KLM uniform turns into stainless steel. ‘I’m afraid I can’t do that. KLM has been very reasonable in this matter and you really can’t ask us to do the impossible. We will rebook one of you and offer you a hotel free of charge. But if neither of you is flying tonight, you have to buy a new ticket for Athens and pay for the hotel accommodation for one person.’

That does the trick. On the first night of their holiday, the man is in Athens while his wife stays at a Schiphol hotel. The following day they are reunited at Athens airport. (Mind you that if the stainless steel threat would not have done the trick with you, you are not just an ungrateful but also an impossible passenger).

Oh, and did I say that KLM paid denied boarding compensation? Without waiting for the passenger to go to court? Indeed, for one person only.

Ground staff are often blamed for an airline’s sloppiness and failures. That is usually not fair because they often just follow their ‘managers’ instructions. The type of guys many people know. Guys who often have difficulties seeing that passengers, aka human beings, are at the heart of their business. Guys who think in spreadsheets and bums on seats. And keep having trouble to imagine that two bums can be a couple and have a life.

The relationship between managers and common sense - it remains a complicated one.

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