Tuesday, 9 October 2012

Denial is not the right way to avoid troubles...

... at least not for airlines.

On October 4, the CJEU issued two decisions which help clarify the scope of Regulation 261/04 on Denied Boarding, also in relation to its predecessor Regulation 295/91 (repealed).While Regulation  295/91 was explicitly limited by its Article 1 to cases "where passengers are denied access to an overbooked scheduled flight", no mention to overbooking is made in the new text- the CJEU was therefore requested by two national courts to clarify the implications of this novelty, resulting in the decisions Finnair v Lassooy (C-22/2011, from now on Finnair) and Rodríguez Cachafeiro and de los Reyes Martínez-Reboredo Varela-Villamor v Iberia (C-321/11, Iberia).

In very short terms, the Court seems to indicate that the Regulation is- generally speaking- intended to grant compensation to all passengers who are denied boarding on grounds which are "in no way attributable to the passenger to whom boarding is denied (Finnair par 33,  Iberia par 32). 

The concept of "denied boarding" is defined by the Regulation as "a refusal to carry passengers on a flight, although they have presented themselves for boarding under the conditions laid down in Article 3(2), except where there are reasonable grounds to deny them boarding, such as reasons of health, safety or security, or inadequate travel documentation". 
Therefore in principle 
"the concept of denied boarding [...] must be interpreted as relating not only to cases where boarding is denied because of overbooking but also to those where boarding is denied on other grounds[...]." (Finnair par 26)

Thus, provided that the passengers have showed up for check-in on time and with the appropriate travel documents, "reasonable grounds" are required to deny them boarding. Even though the CJEU acknowledges that "the EU legislature intended to provide a non-exhaustive list of the situations in which there are reasonable grounds for denying boarding." (Finnair par 30, Iberia par 29), but these reasonable grounds cannot be taken to encompass events such as those involved in the cases decided. Rescheduling due to a strike or the decision to cancel a reservation in the erroneous belief that the passengers would have missed the connection because of a previous delayed flight (operated by the same company!) cannot be considered as "reasonable grounds". The Court observes that 
"it cannot be accepted that an air carrier may increase considerably the situations in which it would have reasonable grounds for denying a passenger boarding. That would necessarily have the consequence of depriving such a passenger of all protection, which would be contrary to the objective of Regulation No 261/2004 which seeks to ensure a high level of protection for passengers by means of a broad interpretation of the rights granted to them." (Iberia par 33, but see Finnair par 34 for an almost identical consideration).
It seems, then, that the "reasonable grounds" clause has to be interpreted strictly in view of the Regulation's objective of offering travellers a high degree of protection.

In the Finnair decision, the CJEU also clarified that, different than in the case of cancellation, the regulation does not exempt airlines from their obligation to compensate passengers to whom they deny boarding on a confirmed flight on grounds of "extraordinary circumstances". (Finnair par 36) A fortiori, no exemption can thus be foreseen when the denied boarding is only, such as in the case at stake in Finnair, only an indirect consequence of those circumstances (par 37).

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