Traditionally, the primary focus of aviation authorities has been safety regulation. Whilst that primary focus remains, recent years have seen increased concentration on passenger rights legislation, particularly, though not exclusively, in Europe. The regulatory climate in which airlines face severe financial consequences in the event of flight cancellations and delays, has led some commentators to question whether the legislative balance has shifted too far towards consumer rights, potentially at the expense of safety.
August 2005 saw five major airline losses, with a combined death toll of almost 350. After a prolonged period with losses at a record low, recent events have inevitably excited discussion as to whether they represent no more than a tragic blip on the airline industry’s otherwise steadily improving safety performance or something more significant.
At the same time, however, they have also drawn attention to the activities of aviation regulators (particularly at a European level) and have led some commentators to question whether there is not an increasing tension developing out of recent legislative initiatives.
Historically, the focus of aviation regulators has been operational safety. That remains the core activity of the world’s national aviation authorities charged with implementing their countries’ obligations under the 1944 Chicago Convention. Recently, however, there has been a much greater focus on the issue of passenger rights. This is an international phenomenon (for instance, the US is currently extending the scope of its disability rights legislation within the civil aviation field), but within the EU the process has perhaps been most marked. Indeed, in many ways the issue of passenger rights can be said to have dominated recent civil aviation policy making within the European Commission. Certainly that is an impression confirmed by the Commission’s website.
The most recent expression of this process was the coming into force on 17 February 2005 of the new EU Regulation on denied boarding, flight cancellations and delays. The detail of this legislation has been covered in previous editions of this newsletter. Notably, in addition to increasing existing compensation levels for instances where passengers with confirmed reservations are denied boarding, the Regulation creates completely new rights in cases of flight cancellations and delays.
The distinction is important because, whereas denied boarding is generally a matter within the control of the airline (the most frequent cause being the operation of traditional overbooking policies), flight delays and cancellations frequently are not.
Yet in all cases of cancellation and delays exceeding five hours, there is now an automatic right to rerouting or a refund (the latter extending to other sectors rendered redundant by the passenger’s decision to terminate his journey). In addition, cancellation triggers a right to large compensation payments unless the carrier can prove it was caused by extraordinary circumstances not avoidable by taking all reasonable measures. On any view, this is a difficult burden to overcome and there is considerable industry uncertainty as to whether, for instance, technical problems with an aircraft capable of affecting its safety would fall into this category. If not, the compensation bill for cancelling the affected flight could easily run into six figures.
Increasingly, commentators are questioning whether, from a safety perspective, this is a healthy environment in which to expect the aviation industry to operate. Subject to the final outcome of the legal challenge to its provisions currently before the ECJ (see page 1), the Regulation in question comes up for review in January 2007 (after two years’ operation) and it may well be that then safety arguments will come much more to the fore than they did when the legislation was originally enacted (at which time the industry’s principal grounds of objection were economic).
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