On 23 Ocotber 2012, the European Court of Justice adopted a judgment in Joined Cases C-581/10 and C-629/10 in respect of the right to compensation in the event of delay of flights under Articles 5 to 7 of Regulation (EC) No 261/2004 and its compatibility with the Montreal Convention.
Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 provides that, if their flights are cancelled, passengers may receive compensation amounting between €250 and €600.
The facts of the Case C-581/10:
The Nelsons booked a flight for themselves with Lufthansa from Frankfurt am Main (Germany) to Lagos (Nigeria), returning on 27 March 2008. The scheduled departure time for that return flight was 22.50. However, the return flight did not depart at the scheduled time and they were accommodated in a hotel. Flight finally departed at 01.00 on 29 March 2008. The plane landed at 07.10, that is more than 24 hours later than the arrival time originally scheduled. Following that flight, the Nelsons brought an action before the court of Germany requesting the court to order Lufthansa to pay each of them EUR 600 on the basis of Regulation No 261/2004.
The referring court asked whether passengers whose flights were delayed enjoyed the right to compensation under Regulation No 261/2004.
The facts of the Case C-629/10:
The airlines TUI Travel plc, British Airways plc, easyJet Airlines Company Ltd and International Air Transport Association requested confirmation from the Civil Aviation Authority, which is the United Kingdom’s independent aviation regulator, that it would not interpret Regulation No 261/2004 as imposing an obligation on airlines to compensate their passengers in the event of delay. The Civil Aviation Authority refused that request, stating that it was bound to give effect to the ruling in Sturgeon and Others (Joined Cases C-402/07 and C-432/07) in which the Court of Justice found that if passengers reached their final destination three hours or more after the arrival time originally scheduled, they may claim fixed compensation from the airline, unless the delay was caused by extraordinary circumstances.
The airlines brought proceedings before the referring court in order to challenge the position of the Civil Aviation Authority.
The referring court asked whether the obligation under Regulation No 261/2004 to compensate passengers whose flights are subject to a long delay is valid in the light of the principle of proportionality, as well as whether this obligation is compatible with the Montreal Convention for the Unification of Certain Rules for International Carriage by Air.
Judgment in Joined Cases C-581/10 and C-629/10:
Firstly, the Court of Justice argued that passengers whose flights are delayed by three hours or more cannot be treated differently from those receiving compensation under the Regulation No 261/2004. However, air carriers are not obliged to pay compensation if they can prove that the cancellation or long delay is caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken, namely circumstances which are beyond the air carrier’s actual control.
Secondly, the Court of Justice stated that obligation under Regulation No 261/2004 to compensate passengers whose flights were subject to a long delay is compatible with the Montreal Convention.
Thirdly, it was found that compensation provided in Regulation does not breach the principle of proportionality as this Regulation is intended to ensure a high level of air passenger protection. Moreover, the amount of compensation may still be reduced by 50% in accordance with provisions of the Regulation. Air carriers are not obliged to pay compensation if they can prove that the cancellation or long delay is caused by extraordinary circumstances.
On those grounds, the Court of Justices ruled, that mentioned provisions of Regulation No 261/2004 must be interpreted as meaning that passengers whose flights are delayed are entitled to compensation under that regulation where they suffer, on account of such flights, a loss of time equal to or in excess of three hours, that is, where they reach their final destination three hours or more after the arrival time originally scheduled by the air carrier. Also consideration of the questions referred for a preliminary ruling has disclosed no factor of such a kind as to affect the validity of Articles of Regulation No 261/2004 providing for the right to such compensation.
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