Friday, 23 March 2012

Whatever happens, air passengers need to be cared for - AG's opinion in McDonagh (C-12/11)

22 March 2012: AG's Bot opinion in case McDonagh (C-12/11)
Everyone in Europe still recalls the consequences of volcano's eruption in Iceland in March 2010: closing of airspace over most of northern Europe for over a week in April. Flights cancelled (over 100.000 flights), people stuck away from home (10 million passengers unable to travel), often without any or with little assistance from their air carriers or travel agencies. Ryanair had to cancel ca 9.500 flights, which effected 1.4 million of its passengers due to these extraordinary circumstances. The Regulation 261/2004 limits passengers rights in case the cancellation of the flight is a result of extraordinary circumstances. Passengers are not entitled to any compensation based on Article 7 of the Regulation under such circumstances. Ms McDonagh was one of the passengers that was supposed to travel from Faro to Dublin on the 17th of April 2010 and her flight got cancelled because of the volcano eruption. She was able to return to Ireland only on the 24th of April 2010. Ms McDonaugh claims she did not receive any care and assistance from Ryanair, to which she was entitled based on Article 5 and 9 of that Regulation. She claims compensation of the costs she incurred for meals, refreshments, accommodation and transport. 

The question referred to the CJEU is whether the prolong disruption to air travel, such as caused by the eruption of the volcano in Iceland, could be seen as going beyond 'extraordinary circumstances' within the meaning of the Regulation that would justify exclusion of the application of Articles 5 and 9 of the Regulation. If that is not the case, the referring court inquires whether the application of these articles could not be excluded based on the violation of the principles of proportionality and non-discrimination, and the principle of an 'equitable balance of interests' as expressed in the Montreal Convention. However, if the CJEU considers that these articles should still be applicable in such extreme circumstances, the referring court inquires whether the obligations places on air carriers in these articles could be subject to an implied limitation (temporal and/or a monetary limit)... Summing up, the referring court does not consider the obligation of air carriers to provide all passengers of cancelled flights with care and assistance for a prolonged period as a fair one and tries to find a way to justify an exclusion or limitation of such an obligation under the EU law.

The Advocate General's answer in short is: no limitation nor release from an obligation of providing care for passengers whose flights have been cancelled owing to extraordinary circumstances, even if they have a prolonged character.

If the CJEU follows the reasoning of the AG that will be good news to passengers, and a rather devastating one to the airlines. Providing meals, alternative accommodation, transport etc. to thousands of stranded passengers in 2010, could well financially cripple most of the airlines operating in the EU. Of course, consumers may also end up not being so happy with this assessment, since in the end if the CJEU confirms it, the cost that the airlines have to incur will be passed on to consumers by airlines raising the price of tickets.

The AG in its opinion reminds that Art. 5 provides the passengers of cancelled flights with rights to receive assistance as well as to receive compensation. Only this second right is excluded in case of the cancellation due to extraordinary circumstances. (Par. 27) The notion of extraordinary circumstances is supposed to encompass all exceptional events that could not have been avoided even if all reasonable measures had been taken, which seems to encompass closing of airspace due to the eruption of a volcano, as well. (Par. 29, 32-34) The AG uses language interpretation of the term used in the Regulation, as well as refers back to the drafting process thereof, the aim of the provisions and their context to justify that there may not be a category of 'particularly extraordinary' events that would fully release the air carrier from its obligations. (Par. 32-26)

"In that regard, the obligation on the air carrier, which consists in providing care for passengers whose flights have been cancelled, by supplying them with refreshments, meals or accommodation or making available to them means of communication with third parties, is designed to cater for passengers’ immediate needs on the spot, whatever the cause of the flight’s cancellation, and to enhance the protection afforded to passengers’ interests." (Par. 38)

The aim of this provision is to enable passengers continuation of their travel under satisfactory conditions (Par. 41), when they find themselves in a vulnerable position, which is even more the case when the passengers are stranded at an airport on account of extraordinary circumstances. (Par. 42) Therefore, the AG considers prolonged closing of airspace as a 'regular' extraordinary circumstance, that still obliges the air carriers to provide care and assistance to their passengers, based on Art. 5 and 9 of the Regulation.

The AG does not find a justification to limit that obligation of air carriers to, e.g., a specific daily amount that would be provided to passengers to cover their accommodation or meals, or compensation of only public transport used by passengers and not taxis, or compensation for only a certain amount of time. (par. 50)

"It is precisely in situations where the waiting period occasioned by the cancellation of a flight is particularly lengthy that it is necessary to ensure that an air passenger whose flight has been cancelled can have access to essential goods and services throughout that period. It should be noted in that connection that Article 9 of Regulation No 261/2004, far from placing an implied limitation on the provision of care, states that passengers are to be offered free of charge ‘meals and refreshments in a reasonable relation to the waiting time’." (Par. 52)

The AG contradicts here the European Commission's guidelines that have been issued to airlines after the volcano eruption (see our earlier post). While the European Commission insisted on passengers needing to be provided with care and assistance, it also claimed that providing this care should not impose an unfair and disproportionate burden on the air carriers. Therefore, pursuant to the EC, the assistance should be provided within the limits of what is proportionate and reasonable in the light of specific circumstances. (Par. 56) The AG sees these guidelines as effectively placing an implied limitation on the provision of care. Such factors should only be taken into account by a national court assessing whether the sums claimed by passengers are reasonable. (Par. 57) Moreover, the AG considers the airlines to be free to pass on the costs incurred as a result of the obligation to provide care and assistance to passengers to airline ticket prices, which also Ryanair had done. (Par. 58-59) All in all, it does not consider that the application of Articles 5 and 9 would infringe the principle of proportionality, in this case (nor any other principle).

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