Tuesday, 12 March 2013

IATA recommends the use of unfair contract terms to airlines?

In the fascinating world of regulating air travel we have some more news with respect to consumer protection on the EU level. In February BEUC (European Consumers' Organisation) sent a letter to Mr. Tony Tyler, CEO of IATA (International Air Transport Association), in which it points out that IATA recommends the use of certain contract terms to its members that have been declared as unfair by various national courts in the EU. Some of these terms were also used by non-members of IATA who modelled their standard terms on those of IATA. The following contract terms are mentioned:

  • code share agreements without the consent of the passenger - where an airline sells tickets for a flight that will be operated by another carrier without informing consumers in advance => This has happened to me once when I booked a flight with the KLM to NYC and it was operated by Delta - as a result I ended up in an old plane without the individual TVs on each seat. Belgian and Spanish courts declared such clauses as unfair (in cases against Brussels Airlines and Iberia) since consumers may not receive the same guarantees from another operator as what they expected when concluding the contract.
  • use of 'no show' clause - in case a consumer booked several flights and he doesn't take one on his flight itinerary, the airlines are free to automatically (unilaterally) cancel the remaining flights and rescind the contract => this clause has been declared as unfair by courts of, among others, Germany, Austria, Spain (in cases against: Lufthansa, British Airways, Iberia). This situation would happen if a consumer, e.g., booked a flight from Amsterdam to Houston, and another flight a week later from Houston to Austin, and then another week later from Austin through Houston to Amsterdam. Imagine the consumer decides to travel by road from Houston to Austin and forgoes the already booked flight, and then the airline on his 'no-show' automatically cancels his flight back to Amsterdam.
  • obligation to reconfirm bookings - when airlines may deny boarding and cancel a reservation if the consumer doesn't confirm the flight in advance => Belgian courts consider this term unfair (against Brussels Airlines)
  • no right to refund in case of force majeure - when airlines refuse to refund the ticket to passengers in case of force majeure preventing passengers from taking the flight (e.g., illness), only offering another ticket at a later date as a remedy => Belgian and Spanish courts (against Easyjet and Vueling) declared these terms as unfair
  • exclusion of carrier liability for non-compliance with timetabling - Belgian and French courts declared these terms as unfair since timetable was not seen as a part of the contract
  • exclusion of liability in case of death or disease - when airlines exclude responsibility and liability for injury or disability attributable to passenger's physical condition or for aggravation thereof => Belgian courts declared this clause as unfair and contrary to provisions of Montreal Convention
  • prohibition to check-in certain items and exclusion of liability of the airline - when airlines prohibit check in items such as money, jewellery, precious metals, computers, PED, business documents, etc. and exclude their liability for loss or damage thereof => Spanish court declared it unfair since there were no valid legal or safety reasons to justify prohibition of transporting such items
  • non-automatic refund of (undue) taxes - if paid taxes, fees or charges are reduced the passenger is only entitled to claim a refund of those, does not get it automatically => French courts declared this unfair
  • price increase charged after the booking - when the increase is disproportionate and passenger is not given a possibility to cancel the contract => French and Spanish courts declared it unfair
  • the lack of transparency, accessibility and clarity of contract terms - Belgian, French and Spanish courts consider it unfair if terms: overlap; there are abundant cross-references; they are not accessible offline; are imprecise and unclear (e.g. extra fees for excess baggage, supplementary charges)
  • non-transferability of tickets - even in case of force majeure passengers may not transfer tickets - BEUC considers this unfair since the airline may transfer the contractual obligation to another party (code share) as well as package travellers are allowed to transfer the package in some situations
That's quite a list, isn't it? Let's see whether IATA will respond to it publicly. 

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