Revision of EU travel rules

By Alex Azabache on Unsplash

Last week, on November 29th, the European Commission announced the forthcoming (long-awaited) revision of EU travel rules (Improved rights and better information for travellers). This concerns a few legislative measures: 

1. Revision of Regulation 261/2004 on Passenger Rights through a newly proposed Regulation as regards enforcement of passenger rights in the Union

• new rules for passengers who booked flights via an intermediary
• an intermediary being defined as any ticket vendor, organiser or retailer other than a carrier
• new Article 8a adds a reimbursement right 
• passengers will need to be clearly informed by the intermediary and air carrier about the reimbursement process
• free of charge
• if reimbursement occurs through intermediaries: Air carriers shall reimburse intermediaries within 7 days, with intermediaries reimbursing passengers within further 7 days
• if passengers do not receive reimbursement within 14 days of choosing for this remedy, the air carrier contacts passengers to receive payment details and reimburses them within further 7 days
• new Article 14a adds rules on the transfer of passenger information, its safeguarding and when to delete it
• this will facilitate intermediaries sharing passenger information with air carriers, so that air carriers can be in contact with passengers about their flights
• strengthening enforcement mechanisms (similar mechanisms have been proposed to be added also to Regulation 1107/2006, Regulation 1177/2010, Regulation 181/2011, and Regulation 2021/782)
• new Article 15a requires air carriers to establish 'service quality standards' (Annex II contains a minimum list thereof) and implement 'a quality management system'
• new Article 16a specifies that the Commission will adopt a common form for reimbursement and compensation requests under Articles 7 and 8 Regulation 261/2004
• passengers will retain the right to submit their refund requests by other means
• passengers shall be free to provide information in any of the EU languages
• new Article 16b specifies that national enforcement bodies should adopt a risk-based approach to monitoring compliance with passenger rights
• this should allow detection and correction of 'recurrent non-compliance'
• new Article 16bb determines that carriers shall share information with national enforcement bodies within 1 month from the request (max 3 months in complex cases)
• new Article 16bc requires informing consumers about ADR

2. Revision of Regulation 1107/2006 on Rights of Disabled Persons and Persons with Reduced Mobility when Travelling by Air through a newly proposed Regulation as regards enforcement of passenger rights in the Union

• special right to assistance for persons with reduced mobility 
• including right for free of charge travel for a companion (if necessary to comply with safety procedures) - in Article 4(2)

3. New proposal for a Regulation on passenger rights in the context of multimodal journey

• multimodal journey is defined as a 'journey of a passenger between a point of departure and a final destination covering at least two transport services and at least two modes of transport' (Art 3(1))
• whilst the new provisions will apply to various types of multimodal journeys (single contract, combined contract, separate tickets) the unifying link between them (and limitation to scope) is that all transport contracts need to be offered by a carrier or intermediary
• whether payment takes place together for all services or separate is irrelevant though
• still, this means that the Regulation will not apply when it is the traveller who seeks out various connection between travel modes on their own
• Art. 4 - establishes the right to non-discriminatory contract conditions and tariffs
• discrimination is not allowed on the basis of passenger's nationality or the place of establishment of the carrier or intermediary
• Art. 5 - better information for passengers combining different travel modes (air, rail, road) in one trip
• e.g. on minimum connecting times between different transport modes, time schedules and conditions for the fastest trip, highlighting the lowest fares, disruptions and delays, complaint procedures
• intermediary transfers passenger data to all carriers involved to facilitate direct communication between them
• caveat: SMEs are exempted from having to provide real-time information
• right to assistance in case of missed connections
• Art. 7 - right to reimbursement and re-routing
• re-routing with the same (or another commissioned) carrier should not bring with it additional costs to passengers
• reasonable efforts should be made to ensure short delays in total travel time and to avoid additional connections
• reimbursement should be paid within 14 days (and may include vouchers, provided passengers agree to this)
• Art. 8 - reimbursement through intermediaries
• provided carriers agree, travellers could request reimbursement from intermediaries
• carriers then reimburse intermediaries within 7 days, and intermediaries have further 7 days to reimburse passengers
• if passengers do not receive reimbursement within 14 days of choosing for this remedy, the carrier contacts passengers to receive payment details and reimburses them within 14 days
• Art. 9 - right to assistance
• free of charge
• means and refreshments - reasonable to waiting time
• accommodation (and transport to it) - up to 3 nights
• Art. 10 - liability for combined multimodal tickets (with a single point of payment for all services) in case of missed connections
• carrier/intermediary liable to reimburse total amount paid for combined multimodal ticket + compensation (75% of the total ticket price) 
• unless clear information that the combined multimodal ticket consists of separate transport contracts
• Art. 11 - common form for reimbursement and compensation requests
• Chapter IV - contains rights for passengers with reduced mobility
• Chapter V - contains provisions on assuring quality of services
• Chapter VI - information and enforcement provisions

3. Revision of Package Travel Directive (2015/2302)

• Package organisers granted a right to a refund from service providers in case of cancellation or non-provision of a service within 7 days (Art. 22)
• to facilitate reimbursement of travellers within 14 days
• Downpayments for packages limited (new Article 5a)
• to max 25% of the package price, unless higher downpayment is justified by package organisers having to pay upfront for service provision
• total payment should not be requested until 28 days before the start of the package
• this is to protect consumers against risk of bankruptcy of organisers
• Revised Art. 12 clarifies termination rights in case of extraordinary circumstances (such as Covid-19)
• e.g. the need to consider official warnings against travel, but also serious restrictions that would have applied to travellers' travel at destination or upon return from travel at home country - when looking for justified termination
• New Art. 12a clarified vouchers policies 
• travellers transparently informed on the right to insist on a refund and voucher characteristics (validity period)
• voucher's amount should at least equal the amount of the refund right
• vouchers shall be valid min 12 months from the day travellers' accept them (with an option to extend by 12 months - once)
• refunded automatically (within 14 days) if not used before the end of the validity period
• vouchers shall be transferable to another traveller without any additional cost
• vouchers and refund rights covered by insolvency protection

Additional proposals have been adopted that aim to facilitate better provision of information to travellers on available travel modes, incl. combining different types of travel (revision of Delegated Regulation 2017/1926 on the provision of EU-wide multimodial travel information services). This new service intends to provide real-time information and updates, also on delays and cancellations, as well as specific information, e.g. on possibilities of taking bikes on a train (see more here).

Update: Air passenger rights

In the busy past academic year we might have missed to report important consumer news. We will try to update the blog with the relevant references in the coming weeks, starting with this short update on air passenger rights.

Order in KLM Royal Dutch Airlines (C-367/20)

On 12 November 2020 the CJEU issued an order in this case asking for the clarification of some provisions of Regulation No 261/2004. The facts of the case concerned passenger travelling from outside of the EU to the EU via connecting flights (NYC-Amsterdam-Hamburg). The first connecting flight was operated by a non-Community air carrier under a code-share agreement, whilst the second one was operated by KLM (Community air carrier). The first flight was delayed to the extent that the final destination was reached with a delay of more than 3 hours. 

The main point of this order was that in case of connecting flights covered by a single reservation, if at least one of the connecting flights was operated by a Community air carrier, the connecting flights as a whole should be perceived as operated by a Community air carrier - and they fall, therefore, within the scope of the Regulation, pursuant to its Art. 3(1)(b) (para 23). As such, the long delay in reaching the final destination, which occurred as a result of events taking place during the first flight, could entitle the passenger to claim compensation under provisions of the Regulation. This claim could be made against the operator of the second flight, the Community air carrier involved in the performance of the connecting flights, despite them not being the cause of the delay.

Update on the revision of Regulation No 261/2004

This Regulation has been in the process of being revised since 2013, but the Council was at a stalemate in its discussion on it, partially due to the dispute between Spain and the UK as to the position of the airport in Gibraltar. Before the Covid-19 pandemic hit, the works in the Council moved forward - between November 2019 and March 2020. Then other issues took priority, but the revision of this measure is listed by the Commission on its priority list of its work programme for 2021 (See more on the EP website dedicated to this issue).

Vaccination Passports

Travelling during Covid-19 pandemic has been problematic and is meant to be facilitated nowadays by the use of vaccination passports. Notwithstanding various problems associated with the use of these passports (related to privacy, equal treatment, etc - see e.g. a paper by Ana Beduschi 'Covid-19 health status certificates: Key considerations for data privacy and human rights'), the technical process of not only putting them in place but also national passports being recognised in other countries (the ultimate goal for the travel industry) still is somewhat wonky. Just today The Independent reported on the British NHS Covid vaccine passports not being recognised in all of the Member States at the moment - e.g. Hungary, Italy and Latvia are mentioned as problematic. This apparently follows on the EU not having yet linked the UK's certification scheme to the EU one (although this has now been done for Swiss and Turkish schemes). See further: UK's NHS Covid Passport Still Not Recognised in Parts of Europe.

Vouchers for cancelled flights should be an (attractive) alternative to a cash refund – EU Commission’s Recommendation

The reimbursement of cancelled flights due to the coronavirus has been a hot topic in recent weeks. Several airlines have been obscure regarding their refund policies, not providing the relevant consumer information on their websites, providing conflicting information or even refusing to provide any refunds. For example, in the case of Ryanair, there have already been at least 3 different approaches to this issue between the 25^th of March and today. Ryanair initially allowed for a choice between a refund and the re-booking of the ticket. Then, Ryanair emailed all passengers asking whether the passengers would accept a voucher instead of a refund and that, in any case, the refund would only be paid after ‘the COVID-19 emergency has passed’. Finally, Ryanair emailed all passengers again informing them that a voucher had been issued (without the passenger’s active choice in that sense, and after the passenger had explicitly asked for a refund). While this email mentioned the apparent option for the consumer to re-submit her refund request, Ryanair re-directed the consumer to their FAQ on how to use the voucher, without any actual means of contact or any form to re-submit the consumer’s claim (this account is based on personal experience and on reports by the media, e.g. https://www.bbc.com/news/business-52370158).

According to the very clear Article 8 of Regulation 261/2004, in case of a flight cancellation all passengers are entitled to a choice between a refund or rebooking of their ticket (reimbursement or re-routing). It therefore appears that a mandatory voucher goes against the rights of the passengers. The airlines can, however, offer a voucher to the passengers as long as this remains voluntary, that is, as long as passengers can alternatively opt for (and receive) a refund. This is also the official position of the European Commission, who has announced earlier today that it has adopted a recommendation on vouchers for cancelled flights, based on the EU’s plan on ‘Tourism and transport in 2020 and beyond’ (here). These guidelines and recommendations follow the interpretative guidelines on EU Passenger Rights Regulations from the 18^th of March (here). The Commission wants voluntary vouchers to be a ‘viable and attractive alternative to reimbursement for cancelled trips’ and therefore wishes to provide incentives for passengers to accept vouches instead of a refund. The Commission’s goal is to encourage consumers to accept voluntary vouchers in order to prevent the insolvency of several airlines heavily operating in Europe. The Commission highlights, however, that consumers retain their right to be given the possibility to receive a cash refund. Furthermore, the Commission states that the vouchers should be protected against insolvency, should be reimbursable after one year, and should provide adequate flexibility for consumers who wish to use them (e.g. regarding their transferability). It is important to highlight that this applies only when the airline cancels the flight – situations where passengers cannot travel or want to cancel a flight on their own initiative do not fall under EU’s passenger rights regulations. It is now up to the Member States to adjust their laws accordingly.

Another hit on budget airlines: Italian authority fines Ryanair and Wizzair over cabin bag policies

Yesterday the Italian Competition and Market Authority fined Ryanair and Wizzair over their cabin bag policies. Last year Ryanair changed its cabin baggage policy allowing handbag sized carry on bags (bags that cannot fit under the seat) on board only if consumers paid for priority boarding. Wizzair shortly followed the same policy. Following these changes, the Italian Competition Authority opened a non-compliance investigation that concluded yesterday with their decision that this practice amounted to an unfair commercial practice. The Authority reasoned that hand-luggage is an essential service and that should not be subject to additional fees.

Now they are both faced with a fine, Ryanair with 3 million EUR and Wizzair with 1 million EUR and are given 60 days to change their hand luggage policy. Given the territorial scope of the decision, and given the problems of enforcement of EU consumer law (that we discussed here and here), the question is, will EU consumers/passengers of Ryanair and Wizzair benefit from their changed policies? Let's hope they (we) will!  

In which currencies should air fares be displayed online? CJEU in C-330/17 Germanwings

We would like to draw the attention of our readers to several interesting judgments and opinions published today at the Court of Justice. One of them concerns the case C-330/17 Verbraucherzentrale Baden-Württemberg v. Germanwings, in which the Court of Justice elaborated on conditions for price transparency under Regulation 1008/2008 on common rules for the operation of air services in the Community.

The dispute was rather simple. The prices of connections between London and Stuttgart operated by Germanwings were expressed in pounds, not euros. A German consumer protection organisation didn't like it and applied for an injunction. The claim was successful in the court of first instance, but the court of appeal disagreed and eventually the case was referred to the CJEU. The Federal Supreme Court wanted to know whether an assessment of the currency in which air fares are to be displayed should be based on particular parameters. 

Legal framework

To recall, pursuant to Article 23(1) of Regulation 1008/2008 "air fares and air rates available to the general public shall include the applicable conditions when offered or published in any form, including on the Internet, for air services from an airport located in the territory of a Member State to which the Treaty applies. The final price to be paid shall at all times be indicated and shall include the applicable air fare or air rate as well as all applicable taxes, and charges, surcharges and fees which are unavoidable and foreseeable at the time of publication". There is no mention of the relevant currency, other than in Article 2(18) which defines ‘air fares’ as "the prices expressed in euro or in local currency to be paid to air carriers or their agents or other ticket sellers for the carriage of passengers on air services and any conditions under which those prices apply, including remuneration and conditions offered to agency and other auxiliary services".

Judgment of the Court

It is understandable that a German passenger flying to Germany might prefer to have the air fare displayed in his local currency when booking his ticket online. However, as rightly pointed out by the Advocate-General and confirmed today by the Court, any such right is not reflected in the interpreted rules. A reference to Rome I regulation on applicable law did not seem justified, either. Eventually, the consumer organisation found no allies in Luxembourg.

There are some differences between the AG's opinion and today's judgment, though. Most notably, while the Advocate-General proposed that the Court steps away and leaves air carriers a margin of discretion, the Court did not show as much judicial restraint. According to the today's judgment, air carriers who do not express air fares in euros are required to choose a local currency that is objectively linked to the service offered. This is the case in particular for the currency of the Member State in which the place of departure or arrival is located.

Two observations

The case is not ground-breaking and the judgment appears to be well-balanced. There is really not much one can say against it. Coming from Poland, a non-eurozone member where complaining is a national discipline, I will nevertheless take a shot.

It is useful to take a step back and note that the entire discussion in the case at hand as to what local currency can be used to express air fares is secondary: it only becomes relevant if an air carrier chose not to express its fares in euros. In other words: displaying air fares in euros is always a good option - also when one travels between non-eurozone countries (so it seems).

To be sure, this is not entirely without justification. Following AG, the Court considered the background story behind the interpreted rules and observed that the previous version of the regulation made reference to ecu. Unlike euro, ecu was not a local currency for any Member State, but rather a common standard used to improve price comparability. This implies that it is not passenger protection that lies at the heart of the interpreted regulation, or at least not in the sense of ensuring that passengers are able to view and then pay the price in a currency to which their journey is related. The emphasis rather lies on price comparability - and to that end, a uniform comparator is preferable.

I do not quite remember the times when air fares were displayed in ecus (or perhaps there wasn't much to miss), but I can hardly imagine them being expressed in ecus only. This brings me to my second thought or rather lack of comprehension why, in the digital age, we are still in need of having this discussion at all (instead of focusing on other questions such as dynamic pricing). When flying from a non-eurozone to a eurozone country (or vice versa) or between non-eurozone countries couldn't one simply have a choice between the respective two currencies? I have already observed this in the market practice, at least of some air carriers. The technology, of course, offers an even broader range of options. One could think of a currency of the country of passenger's residence, as advocated by the German consumer organisation. The privacy concerns arising from such a solution are fairly obvious, though. All in all, a technological response could be preferable; however, for everyone's sake, let us not overcomplicate things.

Connecting fights saga tbc - AG Tanchev in flightright (C-186/17)

Last week we have discussed the judgement of the CJEU in the case Wegener (C-537/17), in which the CJEU confirmed that it doesn't matter whether a delay upon the arrival at the final destination was caused by a delay of one of the connecting flights, as long as they were part of one booking, the passenger could claim compensation from art. 7 Regulation 261/2004. Yesterday, AG Tanchev had to address this issue again in an opinion to the case flightright (C-186/17).

The difference between the factual situation of these two cases was that the contractual air carrier differed from the operating air carriers. In this case, passenger booked his flights through a tour organiser, who had a contract with Air Berlin. The latter air carrier has, however, on the basis of code sharing agreements, allowed the contract to be performed by Iberia Express, Iberia and Avianca - three air carriers for three flights of the whole, connected journey from Berlin via Madrid (first flight) and via San Jose (Costa Rica) (second flight) to San Salvador (El Salvador) (third flight). The first flight, operated by Iberia Express, was delayed - only by about an hour, but this led to a missed connection and arrival in El Salvador with 49-hour delay. 

Surprisingly, the German court dismissed the claim against Iberia Express, claiming that they weren't the operating air carrier on all flights and that they were not involved in the planning and booking of the journey, and, therefore, could not have taken the operational risk of short connection times. This would have been an acceptable reasoning except that provisions of the Regulation 261/2004 are crystal clear in assigning the obligations towards passengers (incl. compensatory ones) to operating carriers - regardless whether they have had contractual relationships with the passenger and, therefore, whether they have planned the flights. On the basis of code sharing agreements, the operating carrier could possibly try to claim redress from other involved parties (on the basis of Art. 13 Reg 261/2004). Such division of liability facilitates high level of consumer protection - as it is easiest for passengers to turn towards the operating carrier with their claims - as well as prevents possible manipulation of flights by air carriers, trying to evade liability by splitting up flights (see para 41 of the opinion, as well).

AG Tanchev rightly then advises the CJEU to recognise the need to hold the operating air carrier liable.

No loophole for airlines- ECJ says an electronic complaint is a complaint in writing

On 12^th April the ECJ judgement on the Finnair case was published on article 31 of the Montreal Convention, with the main question revolving around what qualifies as a complaint in writing.

This is important as a complaint in writing is a requirement for bringing an action against the carrier.

The Court followed the AG Opinion (you can find the blog post on the AG opinion here).

 

Facts

Ms Mäkelä-Dermedesiotis travelled from Malaga to Helsinki on a Finnair flight in 2010. Upon arrival she discovered that items were missing from her checked-in luggage. On the same day of the flight, Ms Mäkelä-Dermedesiotis contacted the customer service of Finnair to report the incident. In that phonecall, she identified the lost items and informed the Finnair representative of their value. The representative entered the information provided by Ms Mäkelä-Dermedesiotis into the Finnair electronic information system. Ms Mäkelä-Dermedesiotis had taken out insurance and received compensation for her loss and the insurance company, Fennia, was subrogated in her place in the claim against Finnair. Finnair argued that Ms Mäkelä-Dermedesiotis had not filed a written claim within the periods laid down in Article 31 of the Montreal Convention.

 

Judgement

The first question was used to establish whether the requirements for bringing an action against the carrier are both filing a complaint within a certain time limit and in writing. The Court answered that indeed art. 31(4) of the Montreal Convention is to be interpreted in conjunction with art. 31(2) and 31(3), meaning that the complaint must be made in writing within the period specified in art.31(2).

For the second and main question, the Court chooses to interpret the term ‘in writing’ in a broader way stating that it ‘must be interpreted as referring to any set of meaningful graphic signs, irrespective of whether they are handwritten, printed on paper, or recorded in electronic form’ (para 35). The court adopts this broad interpretation of a complaint in writing which allows it to catch up to technological developments, as electronic complaints are common practice, especially for air carriers.

A narrow interpretation that would exclude electronic complaints would place a disproportionate barrier to consumers seeking to complain, as highlighted by the Court (para 34). As the Court leaves the form of the complaint open it draws attention to another element, that of being able to identify the passenger which made the complaint. In essence, the Court moves away from the written requirement, as one that needs to be made on paper, to any medium, including an electronic one, which allows for retrieval of information and identification of the complainant.

The third question asks whether the requirement of writing is fulfilled when a representative of the carrier records the complaint in the carrier’s electronic system with the knowledge of the passenger. The court does not view it as problematic that the passenger may be assisted to file the complaint. However, it sets an additional requirement that the passenger should be able to review the complaint and amend it or supplement it within the deadline for filing a complaint. (para 47). Not only is there a positive answer to the third question, but the court places an additional obligation to air carriers, not specifically listed in the Montreal Convention.

Finally, the fourth question was whether art.31 of the Montreal Convention prescribed any other requirements except that of giving notice of the complaint. The Court decided that since the Montreal Convention specifies the time limit for the filing of the complaint as well as the form (in writing) and the consequences of failure to comply with these requirements, there is no other substantive requirement (para 53).

 

Conclusion

To sum up, this is a sensible judgement that protects the interests of consumers and showcases that the Court understands the realities of air travel, as experienced by passengers daily. It also sends out the message to air carrier companies that they cannot circumvent their obligations from the Montreal Convention on the basis of an anachronistic interpretation of the wording of the Convention.

AG Tanchev: Wild-cat strikes are extraordinary circumstances (joined cases Krüsemann)

When a large number of British Airways flights were cancelled in 2017 due to strikes of the company's personnel, the competent UK regulator advised disappointed passengers to claim compensation under the Air Passenger Rights regulation: while the point had never been expressly decided upon by the CJEU, it the restrictive way in which the concept of extraordinary circumstances had generally been applied by the court suggested that only strikes truly "external" to the airline would excuse them from paying compensation. 

The opinion issued today by AG Wahl in a number of joint cases Krüsemann brought against TUIfly suggests a different answer to this general question. 

In the case at stake, a wild-cat strike had taken place agains the carrier due to unpopular restructuring plans: without a strike being officially announced by the unions, much of the staff called in sick on a number of consecutive days, effectively disrupting the airline's operations. This is a rather specific case because, technically, strikes of this kind are not legal - which makes it harder to impute them to someone who, like the carrier, is not breaking the law. 

AG Tanchev's opinion makes at points larger, at points smaller differentiations between regular and irregular industrial action.

On the one hand, the AG argues [at para 57] that 

the objectives of Regulation No 261/2004 point toward the inclusion of ‘strikes’ within the concept of ‘extraordinary circumstances’. This is buttressed by the case-law of the Court, detailed above, at least in the context of substantial absences affecting operational capacity, on the interpretation of ‘extraordinary circumstances’ to date. 

On the other hand, the following paragraph [58] states that 

 in a Union governed by the rule of law, so-called ‘wildcat strikes’ are not inherent in the normal exercise of the activity of the air carrier concerned. They are not akin to something that is intrinsically linked to the operating system of the aircraft, so that it is inherent in the normal exercise of an air carrier’s activity. I further take the view that informing the employees of a potential restructuring did not bring the wildcat strike within the control of TUIfly, given that a wildcat strike was not the inevitable consequence of this action.

This last paragraph seems particularly focussed on the illegal nature of the strike at hand, even though the last sentence could be generalised to legal strikes - of course it was not informing employees of the restructuring that led to the strike, but the intention to do so - and this would be no less true of a "regular" strike. 

He also notes in one of the footnotes (fn 35) to the opinion that 

the conclusion to the effect that a wildcat strike is an extraordinary circumstance is in conformity with a recent Commission proposal to amend Regulation No 261/2004 which provides a non-exhaustive list of circumstances considered as ‘extraordinary circumstances’ for the purposes of the regulation. This proposal includes ‘labour disputes at the operating air carrier or at essential service providers such as airports and Air Navigation Service Providers’.

Thus, according to AG Tanchev, it seems that all strikes would fall under the notion of extraordinary circumstances.

The impact of this conclusion on consumer rights, however, is mitigated by the answer he gives to another question raised in the preliminary ruling request: when the Regulation refers to extraordinary circumstances "which could not have been avoided even if all reasonable measures had been taken", does it intend that the circumstances as such could not have been avoided, or that their consequences could not be prevented?

AG Tanchev considers the latter to be the correct interpretation: the fact that a certain event cannot be avoided does not mean that it is impossible to prevent it, through appropriate arrangements, from causing delays or cancellations. It is for the national court invested with the question to determine whether, in the circumstances of a specific case, all reasonable measures have been taken in order to prevent the unforeseen circumstances from causing significant disruptions. 

The opinion seems destined to bring about quite some forehead-scratching. On the one hand, there are bits in it that will be welcome both on the side of the industry and on that of consumer advocates; on the other hand, by making much depend on national courts' appreciation of the circumstances of a specific case, it seems destined to increase uncertainty. It also seems likely that air carriers would use the case, if the opinion were taken up by the court, to oppose all requests a prima facie denial - and then see whether consumers are going to take their claim to court. 

It remains to be seen whether the Court will follow the AG on this path.

AG Sharpston Opinion in Finnair case : An electronic complaint is a complaint in writing

On the 20^th of December, the AG opinion on Case C-258/16 Finnair Oyj v Keskinäinen Vakuutusyhtiö Fennia (hereafter: Finnair case) was published. The case concerned the interpretation of Art. 31 of the 1999 Convention for the Unification of Certain Rules Relating to International Carriage by Air (hereafter: Montreal Convention) on timely notice of complaints.

Facts of case

Ms Mäkelä-Dermedesiotis travelled from Malaga to Helsinki on a Finnair flight in 2010. Upon arrival she discovered that items were missing from her checked-in luggage. On the same day of the flight, Ms Mäkelä-Dermedesiotis contacted the customer service of Finnair to report the incident. In that phonecall, she identified the lost items and informed the Finnair representative of their value. The representative entered the information provided by Ms Mäkelä-Dermedesiotis into the Finnair electronic information system. Ms Mäkelä-Dermedesiotis had taken out insurance and received compensation for her loss and the insurance company, Fennia, was subrogated in her place in the claim against Finnair. Finnair argued that Ms Mäkelä-Dermedesiotis had not filed a written claim within the periods laid down in Article 31 of the Montreal Convention.

Article 31 of the Montreal Convention states that:

1.Receipt by the person entitled to delivery of checked baggage … without complaint is prima facie evidence that the same has been delivered in good condition and in accordance with the document of carriage or with the record preserved by the other means referred to in paragraph 2 of Article 3

2.In the case of damage, the person entitled to delivery must complain to the carrier forthwith after the discovery of the damage, and, at the latest, within seven days from the date of receipt in the case of checked baggage … In the case of delay, the complaint must be made at the latest within twenty-one days from the date on which the baggage … [has] been placed at his or her disposal.

3.Every complaint must be made in writing and given or dispatched within the times aforesaid.

4. If no complaint is made within the times aforesaid, no action shall lie against the carrier, save in the case of fraud on its part.’

Questions

The case eventually reached the Supreme Court of Finland which referred the following 4 questions to the CJEU:

(1) Is Article 31(4) of the Montreal Convention to be interpreted as meaning that, to preserve a right of action, it is necessary, in addition to giving notice of a complaint in due time, that the complaint be made in writing within the times specified, in accordance with Article 31(3)?

(2) If, to preserve a right of action, a complaint must be made in writing in due time, is Article 31(3) of the Montreal Convention to be interpreted as meaning that the requirement of writing may be fulfilled in an electronic procedure and also by the registration of the damage in the information system of the carrier?

(3) Does the Montreal Convention preclude an interpretation by which the requirement of writing is regarded as fulfilled where, with the knowledge of the passenger, a representative of the carrier records in writing the notice of complaint/the complaint either on paper or electronically in the carrier’s system?

(4) Does Article 31 of the Montreal Convention subject a complaint to further substantive requirements than that of giving notice to the carrier of the damage sustained?’

Opinion

The incident in question, where items were missing from the luggage but not the luggage itself, is best characterised as damaged baggage rather than loss of baggage, according to the AG. That is important to ensure that Art. 31 of the Montreal Convention applies.

The answer to the first question according to the AG is that the notice under Art. 31 needed not only to be made within the 7-day limit but also to be made in writing in order to be valid. That is hardly surprising as Art. 31(4) of the Montreal Convention clearly sets out both requirements and any other interpretation would leave the airline carrier vulnerable to complaints about damaged luggage that would be difficult to verify.

The real essence of the opinion can be found in questions 2 and 3 which ask whether an electronic record of the complaint via representative is compliant with the requirement of Art. 31 of the Montreal Convention to have the complaint ‘in writing’.

In order to answer the second question AG Sharpston contrasted the main characteristics of written and oral communication. The key characteristics of written communication are permanence and retrievability, while oral communication is only recalled from memory and it is difficult to verify. In other words, verba volant, scripta manent. The question then becomes whether electronic communication satisfies the requirements of permanence and retrievability and according to the AG, that is indeed the case. To support her argument, she points out how it is increasingly common, especially for airline companies to keep all their records electronically and how limiting the meaning of ‘in writing’ to a record made in paper would go against the purpose of the Montreal Convention. (para 44 of AG Opinion).

As Finnair held an electronic record of the complaint it was always possible to generate a printout of the complaint which would mean that even a stricto sensu interpretation of ‘in writing’ as ‘in paper’ would be satisfied. (para 49 of AG Opinion) This is a logical interpretation of the condition one that reflects technological developments and everyday practice and is not too onerous for consumers.

This brings us to the third question of whether the consumer needs to record the complaint themselves or whether someone else can do it on their behalf and under their direction as was the case here where the complaint of Ms Mäkelä-Dermedesiotis was recorded by a representative of Finnair. According to AG Sharpston, the Montreal Convention does not set any requirements that aim to prove the origin of the complaint, such as signing the complaint; meaning that the Montreal Convention does not preclude enlisting help for ‘transforming the complaint he wishes to make into written form’ (see para 57 of AG Opinion). So, a complaint that originated with the passenger who decided to report the complaint, as well as its content, that a representative of the airline assisted to record, is compliant with the requirements of the Montreal Convention.

Finally, the answer to the fourth question was that there are no other substantive requirements to be satisfied other than the complaint to be given in written form in the time limits prescribed.

AG Sharpston provided a convincing and intelligent analysis of the issues in question which was well grounded in the realities of the passenger-airline relationship. Airline companies should not be allowed to circumvent their responsibilities to passengers based on a narrow interpretation of the law. Accepting that electronic communications constitute communication ‘in writing’ is logical and consistent with the way companies function in the 21^st century. Overall, this is a welcome opinion that, if adopted by the Court will make a difference for many consumers in what is a very common occurrence. This blog will keep you informed you of all the developments of the case.

Take me home! Lessons from Monarch's closure

On Monday, 2 October 2017 Brexit claimed its first major victim! The UK based Monarch (Airlines and Holidays) went into administration. The bankruptcy of the company came for many as an unpleasant surprise,  leaving 110.000 passengers stranded abroad and many more disappointed with the cancellation of their holiday. According to the BBC, Brexit is in the heart of the company’s failure. Namely, following the Brexit vote the value of the Pound has sharply fallen compared to US Dollar, and many substantial costs for running the airline such as for fuel and handling charges were denominated in US Dollars. This means that following the Brexit vote Monarch paid more for these services and goods than before. Conversely, fierce competition from other low-cost airlines and tour operators, disabled the company to recover the additional costs generated by the Brexit vote.

Following Monarch’s administration the Civil Aviation Authority (CAA), took over Monarch's website and coordinated the biggest repatriation operation which concluded on October 15^th. However, the ordeal of Monarch’ passengers is far from over, as many still have to make alternative travel arrangements as well as claim refunds or expenses. While customers that booked holiday packages with Monarch are protected by Air Travel Organiser’s Licence (ATOL), a UK protection scheme for holidaymakers (see CAA’s website for more information on ATOL), the same is not true for flight-only customers who need to contact their card issuer to find out how to claim a refund (see the Guidance on Monarch's website). 

The case of Monarch in the UK reflects the state of consumer rights also on an EU level. There is a distinction between consumers that buy package holidays and those that buy only air tickets. The first are protected in case of insolvency, according to art 17 of Directive 2015/2302/EU (the New Package Travel Directive), while the second category falls under Regulation 261/2004 which does not provide for insolvency of the provider and the ensuing difficulties in fulfilling their obligations to compensate consumers and reroute flights as per art.7 of the Regulation.
 

While it is mandatory for air carriers to insure their passengers, as per art 6.1. of Regulation 785/2004, insolvency is not specified as a risk. Art.9 of Regulation 1008/2008 on common rules for the operation of air services in the Community (RECAST) provides for the suspension and revocation of the operating license of an air carrier facing financial problems, yet does not cover issues of compensation or repatriation of passengers. Thus, flight-only consumers are disadvantaged in the event of insolvency of the airline, compared to package travel consumers.

EU Commission has recognised the changing landscape as more consumers arrange their travel independently rather than book a package holiday, by bringing a Proposal for amending Regulation 261/2004 in 2013. The Proposal includes the obligation of large airport to have a contingency plan in place in case of a large number of cancelled flights, as well as inform passengers of said cancellations.( See art.4 and 14.4 of the Proposal).

Do you think that the current framework and especially Regulation 261/2004 ensures adequate protection of air passengers in the event of insolvency of the carrier or should Monarch be a warning sign that there is need for reform?

Note: This is the first joint post of the blog and I kindly aknowledge the contribution of Andrea Fejős, especially on the role of Brexit to the closure of Monarch.

Pricing of flights - CJEU in Air Berlin (C-290/16)

CJEU issued a judgment today in the area of air travel, following on its previous decisions in cases ebookers.com (see our post here) and Vueling Airlines (see our post here). The judgment Air Berlin (C-290/16) first clarifies that airlines are obliged to indicate to air passengers prices of taxes, airport charges and other fees and surcharges separately from the price of the air fare. Air Berlin was shown to have had indicated as the price component of the final price a tax amount that had been much lower than the taxes the airline had to pay in reality. This could be misleading for consumers, as the remaining amount of the tax would be added to the final price, and could be seen as part of the air fare. The CJEU perceives Article 23(1) and (3) of the Regulation 1008/2008 on common rules for the operation of air services in the Community as requiring such a separate indication of air fares from taxes etc., in order to guarantee price transparency.

Furthermore, the CJEU in this judgment confirms that the Unfair Contract Terms Directive is also applicable to the area of air travel. The German consumer organisation argued that the flat-rate handling fee of 25 Euro that was charged by the airline also in cases when the passenger did not take the flight or cancelled their booking was clearly detrimental and could be considered unfair. The airline objected to this assessment by invoking the pricing freedom of air services in the EU. While the principle of pricing freedom indeed applies in this area, that does not mean, pursuant to the CJEU, that terms of contracts of carriage by air could be excluded from the unfairness control.