Flight delays or cancellations, whether due to weather or mechanical problems, can result in holiday ruin for air travellers, especially during this holiday season. There are times when the delays or cancellations can lead to missed connections, unexpected overnight stays in the airports or worse called-off long-planned vacations.

In a recent ruling delivered by the European Court of Justice, the Court sought to alleviate the problems faced by stranded air travellers by further limiting the possibility of airlines from avoiding paying due compensation to such travellers. The ruling, in fact, has positive ramifications for airline customers.

The case focuses on an EU Regulation that came into effect in 2005 dealing with the compensation payable to air passengers by airlines in case of cancellation of flights. EU rules allow passengers on cancelled flights to seek from €250 to €600 as compensation unless they are informed of the cancellation of the flight in due time. Under this law, however, airlines can be exempted from paying compensation if extraordinary circumstances result which could not have been avoided even if all reasonable measures had been taken.

In this landmark ruling, the European Court for the first time examined the interpretation of "extraordinary circumstances" under the EU Regulation, and particularly whether mechanical or technical defects can be considered one of those "extraordinary circumstances" under the EU rules that allow airlines to be exempted from the obligation of paying compensation.

Proceedings were brought by Friederike Wallentin-Hermann against now insolvent Alitalia for refusing to compensate her for cancelling a flight in 2005 which delayed her arrival in Italy from Austria by almost four hours. Wallentin-Hermann sought damages of €250 as well as €10 for telephone charges from Alitalia for cancelling a flight from Vienna to Rome five minutes before departure. Alitalia had been informed the night before of an engine defect in the turbine of the plane the woman, her husband and daughter were due to take. Alitalia insisted that the mechanical problems that caused the disruptions must be considered as extraordinary circumstances, which under EU rules exempt airlines from any refunds or compensation.

Alitalia appealed after Wallentin-Hermann won her case in an Austrian lower court. On appeal, the commercial court in Vienna referred the case to Luxembourg for guidance on the scope of the exemption under the EU rules. In its decision, the European Court of Justice said that technical issues found during aircraft maintenance do not constitute "extraordinary circumstances" that would allow airlines to avoid paying passengers compensation for cancelled flights. The Court reached this conclusion after it considered that in the light of the specific conditions in which carriage by air takes place and the degree of technological sophistication of aircraft, air carriers are confronted as a matter of course in the exercise of their activity with various technical problems to which the operation of those aircraft inevitably gives rise. The resolution of a technical problem caused by failure to maintain an aircraft must therefore be regarded as inherent in the normal exercise of an air carrier's activity.

However, it held that while routine mechanical problems require airlines to pay compensation, serious issues that ground an entire fleet of aircraft due for instance to a latent defect which impinges on flight safety, or defects caused by sabotage would qualify as extraordinary. The onus is on the carrier to prove that the mechanical problem leading to the cancellation was beyond its actual control and stemmed from events which were not inherent in the normal exercise of the activity of the air carrier concerned, and had it deployed all its resources at its disposal, it would clearly not have been able to prevent the extraordinary circumstances with which it was confronted leading to the cancellation of the flight.

In conclusion, therefore, an air carrier may not as a general rule refuse to pay compensation to passengers following the cancellation of a flight on account of technical problems in the aircraft. Compensation may, however, be refused if the technical problems stem from events which, by their nature or origin, are not inherent in the normal exercise of the activity of the air carrier and are beyond its actual control.

Dr Grech is an associate with Guido de Marco & Associates and heads its European law division.


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