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Regulation 261/2004

European Commission’s Review of Regulation 261/2004

Current situation

EU Regulation No 261/2004 obliges the European Commission to report to the European Council and Parliament on its operations and results.  The Commission has carried out two surveys to examine the implementation of the regulation and a possible extension of the existing passenger rights legislation.

Other factors have also contributed to the Commission’s review:

• the volcanic ash crisis of 2010
• the outcome of legal proceeding at the level of the European Court of Justice (the so-called Sturgeon, Wallentin and IATA/ELFAA cases as well as national jurisprudence
• recently adopted passenger rights in other modes of transport
• discussions at the European Parliament on a Motion for a Resolution on air passenger rights.

 In view of a legislative initiative to revise the Regulation, the European Commission has asked a consultancy to undertake an impact assessment on:

• possible revisions to Regulation 261/2004, as well as on
• some complementary measures to Regulation 889/2002 concerning the handling of baggage.

IACA position

“Extraordinary circumstances”

• the ambiguous term “extraordinary circumstances” remains the main weakness in the Regulation.
• the final Regulation should remedy this problem and be sufficiently clear on which cases of "extraordinary circumstances" would constitute an exemption to the airlines' obligations to provide care, assistance and pay compensation. However, new rules should also still leave room for specific circumstances which today cannot be foreseen and not diminish the current extraordinary circumstances defence pursuant to article 5 under the Regulation
• awaiting the coming into effect of a future revised Regulation, a clear set of interpretative criteria (guidelines) should be issued by the Commission, in consultation with the industry.

The Sturgeon ruling

The Sturgeon ruling should not be part of the new rules, as

• the legislator never intended to create compensation rights in case of a delay
• this ruling is currently still being challenged before the ECJ

The Wallentin ruling

• IACA believes that the Wallentin ruling redefined the scope of “extraordinary circumstances” defence by including a concept of defects inherent to the normal activity of an air carrier.
• Since that decision, some NEBs and courts have chosen to interpret those words as limiting the concept of extraordinary circumstances - whether or not they actually do so simply by applying this concept for all technical defects (whereas Wallentin only applies the aforementioned concept for technical defects which i) emerge during regular maintenance or ii) that are a result of poor of imperfect maintenance).  
• IACA does not believe that this was the original intention of the legislator. As such, IACA the Wallentin ruling should not be incorporated in the manner it is currently (and wrongly) interpreted.

 The establishment of genuine redress rights

• third parties should in the end bear the cost of damages (including any compensation pay-outs) caused to airlines as a result of their actions or non-performance. As airlines are the point-of-contact for passengers, they should then compensate passengers on behalf of that third party, but be able to easily recuperate these monies from their service providers, provided that the compensation payable is not simply recharged to airlines by the service provider through increased charges in the following year(s)
•  airlines do not always have a contractual relation with third parties that may cause an incident.

 Related documents

IACA's position on the European Commission’s proposal to amend EU Regulation 261/2004