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Compensation for denied boarding

Two recent judgements delivered by the Court of Justice of the Europ-ean Union have shed new light as to when air passengers are entitled to financial compensation in cases when they are denied boarding on a pre-booked flight.

Denial of boarding on operational grounds is unjustified
- Mariosa Vella Cardona

EU law grants a number of rights to airline passengers departing from or flying to an airport located in any member state. In particular, it makes provision for the compens-ation to which passengers are entitled in cases of denied boarding.

Passengers are immediately entitled to an amount of money by way of compensation, reimbursement of their tickets or rerouting to their final destination, and assistance and care while awaiting a later flight. The law defines “denied boarding” as the refusal by an air carrier to carry passengers, although they wish to travel and have presented themselves in time for boarding and have a confirmed reservation. Provision is nonetheless made by the law for cases where there are valid reasons for a carrier to deny boarding.

The Court of Justice recently analysed two sets of facts which gave rise to denied boarding and for which the air passengers involved sought financial compensation in terms of EU law.

In one, two passengers had bought airline tickets from Iberia for a journey which comprised two flights: Corunna-Madrid and Madrid-Santo Domingo. At the Iberia check-in counter at Corunna airport, they were given two boarding cards for the two successive flights. The first flight was delayed and since the airline anticipated that the delay would result in the two passengers missing their connection in Madrid, it cancelled their boarding cards for the second flight.

Despite the delay, on arrival in Madrid the applicants presented themselves at the departure gate in the final boarding call to passengers, but they were not allowed to board because their boarding cards had been cancelled by the airline and their seats had been allocated to other passengers.

The passengers filed an action before the Spanish courts seeking financial compensation in terms of EU law for being denied boarding without a valid reason. The airline contended that the situation was not a case of denied boarding but one of missed connection, which does not give rise to compensation. It argued that the decision to deny the applicants boarding was not attributable to overbooking but to the delay incurred by the earlier flight.

The facts of the other case were somewhat different. Following a strike at Barcelona Airport, a scheduled flight from Barcelona to Helsinki operated by Finnair was cancelled. To accommodate passengers bound to travel on this flight, Finnair decided to reschedule subsequent flights and the passengers from the flight affected by the strike were flown to Helsinki on flights scheduled for the following days. This meant, however, that some passengers who had bought their tickets for the latter flights and who duly presented themselves for boarding were denied boarding because their places had been taken up by the passengers affected by the strike. One of these passengers filed an action before the Finnish courts, requesting the court to order the airline to give him financial compens-ation as stipulated by EU law for denied boarding.

In both cases, the national courts made a preliminary reference to the CJEU requesting guidance as to the precise scope of the concept of “denied boarding”.

The CJEU observed that the concept of “denied boarding” relates not only to cases of overbooking but also to other instances concerning other grounds, such as operational reasons. Such an interpretation arises not only from the wording of the law itself, but also from its objective, namely that of ensuring a high level of protection for air passengers. Limiting the scope of “denied boarding” exclusively to cases of overbooking, the court noted, would reduce the protection afforded to passengers, even if they find themselves in a situation for which they are not responsible.

EU law makes specific provision for those cases where there are valid grounds for an airline to deny boarding, particularly for health, safety or security reasons, or because of inadequate travel documentation. The court considered that in both the cases under examination, the denied boarding could not be placed on the same footing as the reasons stated in the law, because in both cases the grounds for denying boarding were not attributable to the passengers themselves.

On the contrary, in both cases, the denied boarding was attributable to the carrier, in the first case because the airline itself had caused the delay to the first flight operated by it and subsequently cancelled the passengers’ boarding tickets for the second flight; and in the second case, because it had reallocated passengers’ seats in order to be able to carry other passengers, the airline itself choosing whom to carry.

The court concluded that denial of boarding on operational grounds is unjustified. Insofar as strikes are concerned, the court observed that though an air carrier is not required to pay compensation in the event of cancellation of a flight due to extraordinary circumstances, this exception applies only to the passengers denied boarding on the day of the strike. The airline cannot escape its obligation to pay financial compens-ation to those passengers who were denied boarding simply because flights were rescheduled as a result of extraordinary circumstances affecting an earlier flight.

The wide interpretation of the concept of denied boarding given by the CJEU in both cases sends a clear message that the court is not willing to tolerate or accept tactics adopted by airlines in order to circumvent the protection that the law affords to consumers.

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Dr Vella Cardona is a practising lawyer and a freelance consultant in EU, intellectual property, consumer protection and competition law. She is the deputy chairman of the Malta Competition and Consumer Affairs Authority as well as a member of the National Commission for the Promotion of Equality.

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