How to deal with delays, cancelled flights and compensation

August tends to be the month where everybody goes on vacation. From experience, this tends to be especially true for investment bankers, traders, and lawyers because financial markets are a bit slower. Or more accurately, financial markets are slower because nobody is at the trading desks.

With a historically low pound and an incredibly warm weather across the United Kingdom, you would be wise to spend your vacation in Scotland or Brighton. However, who can resist the French Riviera or Ibiza? I am also guilty, as I will be flying to South America in August for a wedding. If you cannot resist temptation (or can’t miss a wedding), you are likely to fly to your end destination, and possibly encounter delays or cancellations along the way.

It is important to know your rights when a flight is delayed or canceled. First, there is nothing more stressful than the sense of uncertainty that comes with not knowing whether your plane will take off and your holidays be ruined. If you know your rights, you can map a course of action to mitigate the damage. It will not remove the stress and disappointment but at least you might not end up completely out of pocket.

Under EU Regulation 261/2004, you may be entitled to up to €600 in compensation when your flight lands more than three hours late. For canceled flights, you have the fly to your destination on another flight with the same airline or receive a full refund if you end up not flying. Of course, some airlines will still come up with false pretenses or excuses to avoid compensating passengers. Personally, it has been unclear if this was due to poor staff training or genuine incompetence. In any event, let’s turn to the fine print to make sure you get what you are entitled to.

 

Who is eligible?

This right of compensations is rooted in EU law and essentially meant to cover EU airspace or EU carriers. Article 3 of Regulation 261/2004 states that the following passengers are eligible:

1. passengers departing from an airport located in the territory of a Member State to which the Treaty [the Regulation] applies;
2. passengers departing from an airport located in a third country to an airport situated in the territory of a Member State [EU country] to which the Treaty applies unless they received benefits or compensation and were given assistance in that third country if the operating air carrier of the flight concerned is a Community carrier.

Below is a cheat sheet of what the above means:

As you are probably flying from the UK, this means that you are eligible (at least until March 2019 – then you might want to fly with EU carriers).

 

What can you claim?

If your flight is canceled

If your flight is canceled, you have the right to be reimbursed within seven days, re-routed on another flight to the same final destination at the earliest opportunity or return to your original point of departure at the earliest opportunity.

In a city or region is served by several airports, if an air carrier offers a passenger a flight to an airport alternative to that for which the booking was made, then the air carrier must bear the cost of transferring the passenger from that alternative airport either to the airport of the booking or to another close-by destination agreed with the passenger. Therefore, if you were supposed to land at Gatwick airport but instead you landed at Southend airport, then you are entitled to free transportation to go to Gatwick, or another close by location agreed with the airline. This could be your home, especially if you live close by Gatwick or Southend.

In addition, you also have the right to assistance. This includes meals and refreshments, hotel accommodation if you need to stay overnight and transport between the airport and place of accommodation. You are also entitled to two phone calls, telex (who uses that?), fax messages or emails.

Finally, if you are informed of the cancellation of your flight less than two weeks before the scheduled time of departure, you are also entitled to compensation:

1. €250 for all flights of 1 500 kilometers or less;
2. €400 for all EU flights of more than 1 500 kilometers, and for all other flights between 1 500 and 3 500 kilometers;
3. €600 for all other flights not covered in (a) and (b).

If you are offered re-routing to your final destination, compensation levels may be reduced depending on the delay incurred. Compensation would be reduced by 50% if your delay was less than:

1. Two hours, in respect of all flights of 1 500 kilometers or less;
2. Three hours, in respect of all EU flights of more than 1 500 kilometers and for all other flights between 1 500 and 3 500 kilometers; or
3. Four hours, in respect of all flights, not falling under (a) or (b).

Don’t get me wrong. I’m not saying that a Coke and €400 will turn you into a very happy person after discovering that your flight got canceled. At least, you are getting something for your hassle.

If your flight is delayed

In my view, a delayed flight is where things get interesting. With cancellation, you are trying to salvage what you can. With a delayed flight, you are still suffering an inconvenience but at least you are getting to your destination and you are making bank at the same time if the delay is significant.

Under Regulation 261/2004, you were historically only entitled to the right to assistance (as described above) and, if your flight was delayed for at least five hours, reimbursement for the unused part of the journey or a return flight (whichever is relevant). Let’s note that this isn’t great compensation: you could be delayed over 5 hours, still use the same aircraft and route on that same day, and get nothing because you made it home just fine as expected. You would only get reimbursed if you decided not to fly (maybe if you had found a quicker flight with another airline – unlikely). I’m eager to hear your opinion on this. If you think I’m reading this wrong, do let me know.

You can see that a strict reading of the Regulation does not offer that much protection. It’s a nice to have, but hardly anything ground-breaking.

Five years after the issuance of the Regulation, things started to change with the European Court of Justice (ECJ). The 2009 case of Christopher Sturgeon and Others v Condor Flugdienst GmbH and Stefan Bock and Cornelia Lepuschitz v Air France SA (the “Sturgeon Ruling”) proved to be pivotal. The Court determined that the compensation rules should not just apply to canceled flights and cases of denied boarding, but also to delayed flights. Paragraph 61 of the ruling here is clear:

“In those circumstances, the Court finds that passengers whose flights are delayed may rely on the right to Compensation laid down in Article 7 of Regulation No 261/2004 where they suffer, on account of such flights, a loss of time equal to or in excess of three hours, that is to say when they reach their final destination three hours or more after the arrival time originally scheduled by the air carrier.”

The reasoning of the Court made sense. The Regulation allows for compensation for passengers who are delayed as a result of being re-routed. However, passengers whose flights are delayed (without being re-routed) do not acquire any right to compensation and therefore are treated less favorable even though, depending on the circumstances, they suffer a similar loss of time, of three hours or more, in the course of their journey.

To resolve this difference in treatment of passengers, the Court found that passengers also acquired a right to compensation when their flight was delayed.

Since the Sturgeon Ruling, we now have the following compensation levels for delayed flights:

 

Claims can usually be submitted through the airline’s website. Low-cost airlines such as Easyjet and Ryanair regularly deal with such claims and will guide you throughout the process. Make sure you keep a record of your flight number, the number of hours you were delayed and the reason for the delay. If you believe you have a legitimate claim, and that such claim was rejected by the airline, you can escalate the matter.

Airlines tend to take their time when it comes to dealing with compensation claims. This is often a combination of staff shortage and high volumes of claims due to multiple delayed flights. If you believe that you are entitled to compensation, claim promptly. First, the clock starts ticking for the airline to respond. Second, the details of the flights, distances, delay, and nature of the delay will still be fresh in your memory.

 

The catch: extraordinary circumstances

Claims will only be successful if the delay or the cancellation is the airline’s fault. This means that airlines are under no obligation to compensate for delays or cancellations that are due to unforeseen or extraordinary circumstances. As the Court pointed out, “a delay does not, however, entitle passengers to compensation if the air carrier can prove that the long delay was caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken, namely circumstances beyond the actual control of the air carrier.”

The Regulation does not define precisely what the term “extraordinary circumstances” and the Court only offered limited guidance in this respect. The Civil Aviation Authority lists the following events as extraordinary circumstances on its website:

• Acts of terrorism or sabotage;
• Political or civil unrest;
• Security risks
• Strikes (unrelated to the airline such as airport staff, ground handlers, or air traffic control);
• Weather conditions incompatible with the safe operation of the flight; and
• Hidden manufacturing defects (a manufacturer recall that grounds a fleet of aircraft).

 

On the other hand, anything related to technical or maintenance issues unrelated to manufacturing defects, strikes from the airline’s staff and overbooking will, for example, give rise to the right to compensation. As a rule of thumb, if you are unsure of your claim, you have nothing to lose by submitting it. You never know, it might all work out.

Readers who have recently traveled to the south of France, Italy, and Spain are likely to have been hit by the French air traffic control strikes. I was flying on an Easyjet flight from Nice to London towards the end of June and our flight was delayed. As the delay was less than three hours, I was not entitled to any compensation. I still got refreshments as we were over two hours late. But even if my flight had been delayed for more than three hours, I would not have been entitled to compensation because air traffic strikes are considered extraordinary circumstances. The “extraordinary” nature here is really debatable when the said strikes have been going on for months now… Airlines such as Easyjet, Ryanair, and IAG (the parent company of British Airways) all filed complaints with the European Commission over the French air traffic controllers’ walk-outs and strikes. Their claim is that France’s inability to resolve the strikes amounts to a breach of the principle of free movement within the European Union. This should prove to be an interesting case and we will keep an eye on those developments.

 

Key takeaways:

• You are entitled to compensation for delays of at least three hours and cancellations;
• Claim promptly as airlines tend to take their time to settle claims;
• Delays due to extraordinary circumstances will not be compensated.