Call for a free flight back home for stranded passengers in the event of EU airline bankruptcy!

The International Air Transport Association (IATA) announced in Brussels on 25th November 2014 a new arrangement to help passengers impacted by airline bankruptcy. It looks the action was initiated by IATA member airlines flying to and from the EU to avoid the threat of levying a permanent statutory fund to aid passengers in such situations. "The passengers left stranded in the rare and unfortunate event of an airline bankruptcy will be offered ‘rescue fares’ from airlines to ensure they can get home“ says Tony Tyler, IATA’s Director General and CEO. Unfortunately, the solution does not seem so much new. So called ‘rescue fares’ have been already offered by airlines to passengers impacted by airline bankruptcy for years... 

Then, what is the core of the problem?

The European Commission has estimated the proportion of total EU passengers affected by airline insolvencies is less than 0.07% for each year. In 2013, some 842 million passengers were carried by air in the EU-28. It means around 50.000 air passengers might be affected by airline bankruptcy every year. The risk to remain stranded far from home, with all its consequences (to pay another flight back home, to incur additional accommodation costs) and/or never be reimbursed for the part(s) of the journey not made is estimated at 12% of those passengers. It makes around 6.000 air passengers stranded far from home yearly. However, the impacts on each such passenger might be significant. For example the immediate costs for stranded passengers reached even €796 on average with failure of Air Madrid in 2007 (the carrier left numbers of passengers stranded in South America). The passengers who had not left yet and renounced to their trip lost €315 in average and passengers who decided to rebook lost €390 in average. In fact, of the passengers purchasing standalone tickets affected by insolvency over 2000 to 2010, 76% did not have any form of protection. It is high time for change. EU air passengers need greater protection and immediate help. Especially that passengers are entitled to these rights under Regulation (EC) No 261/2004, and the assistance relates primarily to enable them back home as soon as possible.

Therefore we emphasis the key fact. The insolvency of air carrier and the sudden suspension of its operations affect the passengers switching to services of other carriers. The passengers' demand on the specific routes does not disappear, does it? The passengers still continue to travel. Although they use services of airlines, with the most convenient option for traveling (on the same a similar route).

We argue The European Commission takes finally legislative work to enforce EU airlines to provide with free transport back home to passengers with a return ticket issued by EU air carrier and that suddenly ceases operations due to insolvency or bankruptcy. This particularly difficult situation for passengers stranded at the airports needs to be resolved. In our call for action we refer both to interests of consumers, affected by the bankruptcy of the airline, and to social responsibility of business entities, which are part of the EU sustainable transportation system.

The European Parliament pushes for enforceable air passenger rights

Delayed or stranded air passengers would be likelier to win compensation, and airlines would get clear rules on how to deal with passenger complaints, under a draft law voted by Parliament at the first reading on 5th February 2014. The consumer protection is to be improved.

Rescheduled flights

When flights are delayed, information on rescheduled flights would have to be made available to passengers no later than 30 minutes after the initial departure time.

Passengers with a return ticket could not be prevented from boarding the return journey even if they did not take the outward one.

Luggage

Passengers would have to be informed early in the booking process about baggage allowances. Hand-luggage allowances would be increased to include a coat, a handbag, and one bag of airport shopping.

Complaints

Air carriers which fail to reply to a complaint within 2 months would be deemed to have accepted the passenger’s claims. Those citing “extraordinary circumstances” in which they need not pay compensation would have to give the passenger a full written explanation. The draft rules include an exhaustive list of such circumstances, which include bird strikes, political unrest and unforeseen labour disputes.

However, in long-lasting extraordinary circumstances, such as the 2010 ash cloud crisis, air carriers’ liability to pay for passenger accommodation would be limited to 5 nights.

Bankruptcies

To ensure that passengers are not stranded when an air carrier goes bankrupt, Parliament inserted requirements for carriers to have in place appropriate guarantee mechanisms, such as guarantee funds, or to take out insurance policies.

Better enforcement

National authorities should be given sufficient powers to punish air carriers that infringe passenger rights and should assess their reports on how they help passengers to cope with flight delays and cancellations, say MEPs.

Next steps

This vote constitutes the European Parliament’s first reading position. Under the co-decision procedure, the Council of Ministers may accept the Parliament’s  position or  adopt its own position, for further discussion with Parliament.

Source: EuroParl press release

566 amendments to proposed EC changes of air passenger rights

The European Parliament (EP) is working on the proposals of the European Commission (EC), which are about to change the existing rights of air passengers. We have reviewed the list of amendments proposed by MEPs, members of the Committee on Transport and Tourism. The observations confirm previously expressed opinions on proposals to the EC, for example during the debate in the EP on 16 September. The overwhelming majority of amendments are going towards greater protection of the air passenger rights. MEPs have made 566 amendments, which is not surprising, since several proposals the EC essentially limit existing rights of passengers. The full list of amendments can be found at two documents here: 1 and 2. The debate on the amendments is scheduled for November 4th and voting in the committee is planned on November 14th.

MEP amendments to the EC proposal generally in favour of passenger rights

We constantly monitor proposals, which refer to air passenger rights in Europe. Therefore, we have reviewed the latest draft opinion of the Committee on the Internal Market and Consumer Protection for the Committee on Transport and Tourism of the European Parliament. The amendments are made to the proposal for a regulation of the European Parliament and of the Council amending Regulation (EC) No 261/2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights and Regulation (EC) No 2027/97 on air carrier liability in respect of the carriage of passengers and their baggage by air. We welcome those from the amendments made, which secure the passenger rights, enhance better service and balance the real power between key market stakeholders. The draft opinion is available, here.

Help stranded passengers in the event of airline insolvency!

According to the forecast presented by the European Commission, the average number of passengers affected by airline insolvency in Europe will rise up to 480.000, in 2020. Basing on the recent statistics, it can be presumed that about 12 % of them will be stranded on the airports, far away from home. We think that this relatively small group of passengers (according to Eurostat data from 2011, currently, in EU, it is 39.000 people out of 777 million people traveling by planes) should have bigger protection and should be provided with immediate help. Especially, because they are entitled to these rights under regulation (EC) No 261/2004, and the expected help will facilitate their fast return to their homes.

At the same time, we point out that in case of carrier’s insolvency and sudden suspension of the airline operations, the passengers will have to use offer of other carriers. What is more, the market of air services, or to be precise, demand on the routes which were operated by the insolvent carrier,  will remain to be satisfied. Passengers who used these lines, in most cases, will still keep using them. They will choose air services which provide the most convenient way of traveling (on the same or similar line).

Therefore, we call for starting a legislative work, which will obligate European air carriers to provide transportation for the passengers who started journey (those who possess return ticket of airlines which in the meantime stopped operating due to insolvency in EU). Due to specially hard and precarious situation of passengers stranded on the European airports, far away from home, we think that providing this group of passengers with protection and care should be a high-level goal.