DENIED-BOARDING COMPENSATION FOR AIR PASSENGERS
Draft Regulation establishing Common Rules on compensation and assistance to air passengers in the event of denied boarding and of cancellation or long delays of flights.
|Legal base:||Article 80(2) EC; co-decision; qualified majority voting
|Department:||Transport, Local Government and the Regions
|Basis of consideration:||EM of 13 February 2002
|Previous Committee Report:||None; but see (18874) 5818/98: HC 155-xxi (1997-98), paragraph 10 (11 March 1998)
|To be discussed in Council:||Not known
|Committee's assessment:||Politically important
|Committee's decision:||Not cleared; request to be kept informed
6.1 One in 1,000 air passengers having seat reservations
with European airlines are denied boarding by the airlines because
of overbooking. Many passengers also face long delays or cancellations.
According to the Commission:
"Roughly one quarter of a million air passengers each
year get a bad surprise at EU airports when checkingin for
their flight. They have bought a ticket and reserved a place.
They are then told by the operator that their flight has been
overbooked and they have to take a later one. Denied boarding
causes passengers great inconvenience and loss of time. Equally
bad surprises are cancellations without warning and delays that
leave passengers stranded for hours at an airport."
6.2 Overbooking is deliberate, and widely used amongst
scheduled airlines. It is justified by the airlines as a way of
ensuring maximum use of capacity and hence maximum revenue. The
Parliamentary Under-Secretary of State, Department for Transport,
Local Government and the Regions (Mr David Jamieson) says in his
Explanatory Memorandum of 13 February 2002:
"There is always a proportion of passengers booked onto
a flight who do not arrive at the airport, whether through missing
connecting flights or because flexible ticketing allows them to
catch a different flight with no penalty. Airlines use their past
experience to estimate this number and sometimes overbook, to
avoid flying with empty seats. On most flights their estimates
are correct and no passengers are denied boarding. However, on
some occasions more passengers want to fly than there are seats
available and as a result some are unfortunately denied boarding."
6.3 The Community has previously sought to provide some
protection to passengers who are denied boarding. For example,
in 1991 Council Regulation (EEC No. 295/91) was adopted, which
established common rules for a compensation system for passengers
denied boarding in scheduled air transport. The Regulation gave
passengers the right to minimum financial compensation, to the
choice between an alternative flight at the earliest opportunity,
re-routing or reimbursement of the ticket and to assistance to
reduce the inconvenience of waiting for a later flight.
6.4 In 1998 the Commission sought to extend and clarify
that Regulation. It proposed an increase in the levels of minimum
compensation in line with inflation, and a widening of the scope
of the Regulation to include passengers buying seats-only (as
opposed to inclusive tours) on non-scheduled flights. The European
Parliament widened the proposal further to include Community carriers
flying from non-Community airports back to Community airports.
The previous Committee cleared the proposal in March 1998. However,
the proposal was subsequently stalled by the long- running dispute
between Spain and the UK over Gibraltar airport.
6.5 The Commission has now abandoned its 1998 proposal
and has brought forward a new one.
6.6 The proposed Regulation is more ambitious than the
previous proposal in that it seeks actively to deter the practice
of overbooking, by means of high minimum levels of compensation,
and extends its scope to include cancellation and delay. The Minister
summarises the main features of the current proposal as follows:
" Increasing by a factor of five the minimum
amount of compensation for denied boarding (to euro750 for flights
of less than 3,500 km and euro1,500 for flights of more than 3,500
km). The primary purpose of this stringent increase is to act
as a deterrent to overbooking.
- Requiring airlines to call for volunteers to surrender reservations
in exchange for agreed benefits.
- Extending the rights of passengers denied boarding to passengers
whose flights are cancelled.
- Requiring airlines to offer assistance to passengers in the
case of delays and to allow the possibility of reimbursement of
the ticket if the passenger no longer wishes to travel.
- Extending the scope of the Regulation to include nonscheduled
flights (for both seatonly and inclusive tour passengers).
- Requiring airlines not to deny boarding to a disabled passenger
and any accompanying person, to a passenger whose mobility is
otherwise reduced or to an unaccompanied child.
- More stringent obligations on airlines to inform passengers
of their rights.
- Obligation on Member States to lay down penalties applicable
to infringement of the Regulation and to designate a body responsible
The Government's view
6.7 The Minister says:
"The UK Government strongly supported the proposed amendment
of Regulation 295/91 in 1998.
"We continue to support the revision and strengthening of
the Regulation, but this proposal goes much further than the 1998
amendment. Some of the changes appear to have been ill-thought
"In general we have concerns that the proposal has been brought
forward without consultation and without sufficient regard either
to the European voluntary commitments on air passenger service,
which take effect on 14 February, or to the Directive on Package
Travel which already provides protection for passengers travelling
as part of an inclusive travel/accommodation package.
"The Commission's intention behind the increased compensation
is to deter airlines from overbooking. The rates have been set
at twice the level of average business class fares. However, the
British Air Transport Association (BATA) which represents most
major UK airlines claims that the proposal as drafted would result
in lower load factors, leading to increased pressure on aviation
infrastructure and presumably higher fares. Even the Air Transport
Users Council (the watchdog for the UK airline industry) has expressed
concern that protecting a minority of passengers could be disproportionately
costly for the majority. Many airlines already operate a system
of calling for volunteers. In the United States there is also
an obligation on airlines to call for volunteers and rates of
involuntary denied boarding are some ten times less than in the
EU (0.1 passengers per thousand compared to 1.1 per thousand on
EU airlines). However, the maximum compensation level for denied
boarding in the US is $400 (a level which has admittedly been
unchanged since 1978 and is being reviewed). The US experience
therefore suggests that an effective system of calling for volunteers
is more important to reducing the rates of involuntary denied
boarding than a stringently high rate of Denied Boarding Compensation.
"The Commission does not discuss the possibility of requiring
airlines to provide passengers with statistics on denied boarding,
thereby informing their choice. This was suggested in their consultation
in 2000 on reports of Service Quality Indicators, on which we
await a legislative proposal.
"Charter airlines are particularly concerned about the inclusion
within the proposal of inclusive tour passengers travelling on
charter flights. Charter airlines do not deliberately overbook
in the same way as scheduled airlines as they do not offer flexible
fares. Neither do they cancel flights other than in extreme circumstances.
Passengers on inclusive tours are already covered by the Package
Travel Directive in respect of cancellation or changes to the
service and there would seem to be no case for extending the provisions
of the Denied Boarding Compensation Regulation to them, since
to do so might cause confusion. In addition, it would be impractical
for such passengers to be given the right to reimbursement of
their ticket as the price of the flight is not separately itemised
in the package. The Government is therefore minded to oppose the
inclusion of inclusive tour passengers within the Regulation,
whilst accepting that seatonly passengers on charter flights
should be covered.
"The proposal overlaps to some extent with the European Airline
Passenger Service voluntary Commitment, which takes effect on
14 February and to which all the major fullservice UK airlines
(scheduled and chartered) are signatories. For example, under
the Commitment, in the event of overbooking, airlines undertake
first to seek volunteers who are prepared to stand down from the
flight. This clearly has the same purpose as Article 5 of the
proposal which obliges airlines to operate a system of calling
for volunteers. In addition, airlines are committed to providing
appropriate assistance, for example refreshments, meals and accommodation,
to passengers facing delays beyond two hours, provided that local
conditions allow for such assistance to be delivered. Article
11 of the denied boarding proposal requires airlines to provide
similar assistance in the case of delay to disabled or reduced
mobility passengers and to unaccompanied children. However, we
accept that the Commission has consistently stated that it will
propose legislation on denied boarding, and that it would not
be acceptable to allow non-signatories to the voluntary commitments
to be treated more leniently in this area.
"In summary, the Government supports the need to update and
strengthen the existing Regulation but considers that this proposal
will need to be considered carefully and that amendments to both
the substance and detail may be required before it is acceptable."
6.8 There is widespread agreement that it is unacceptable
for airlines to deny boarding to passengers with reservations
simply because the airline has overbooked the flight. Too many
people are refused boarding or are faced with long delays or even
cancellations. The inconvenience caused should not be underestimated.
6.9 The proposal requires airlines to call for volunteers,
but backs this up with compensation levels that seek to discourage
airlines from deliberately overbooking.
6.10 We note that, although the risk of a passenger
in the EU being denied boarding is low, it is still some ten times
greater than in the US where there is an obligation on airlines
to call for volunteers. In the EU there is no obligation, although
many airlines in the EU operate a system of calling for volunteers.
6.11 We recognise that overbooking is used by airlines
to ensure maximum use of capacity and protect their revenue, which
is especially important given the difficulties that airlines currently
face. However, the strong commercial case that airlines have for
overbooking underlines the need for passengers to be given protection
in the form of generous compensation. We consider that compensation
levels should be sufficiently high to discourage overbooking and
make it worthwhile for airlines to offer attractive packages,
including free flights, to encourage volunteers to surrender their
6.12 We hold the document under scrutiny and ask the
Minister to inform us of the progress of negotiations.