October 23rd 2012 was a significant date in the aviation industry.
Guest author: Sam Borrett, Marketing Communications Manager, Bott & Co
It was the day that saw the European Court of Justice clarify that under EU Regulation 261/2004, any airline passengers who were delayed by more than three hours are entitled to receive compensation of up to €600 from the airline.
The regulation initially came into force in 2005 to cover cancelled flights, and for passengers who had been denied boarding - where airlines ‘overbook’ flights on the assumption not all passengers would turn up.
In October 2012 it was also applied to delays of more than three hours for any flight into the EU on an EU carrier (such as New York to London on Virgin Atlantic) or any flight departing the EU on any carrier.
Passengers are being fobbed off
Although airlines have an obligation to fully compensate delayed passengers, only around 2% of passengers have recovered compensation and many are being fobbed off by the airlines with excuses and complex technical arguments.
The airlines do have a legitimate defence of ‘extraordinary circumstances’ where any acts of terrorism, industrial action (strikes), civil unrest, or adverse weather conditions, mean they have no liability on delayed flights at that time.
However, many airlines are arguing that technical defects are extraordinary circumstances and will often revert to this defence when refusing to pay compensation to passengers who complain direct to the carrier.
£3 billion owed in compensation?
The numbers involved are quite staggering. There were 220 million passengers flying in and out of the UK in 2012 and our data shows around 0.85% had a valid delay of more than three hours that was not due to ‘extraordinary circumstances’.
This gives a market size of approximately 1.87m and with an average claim value of £365 there is over £680m per year in compensation due by airlines to passengers.
If you consider the Civil Aviation Authority (funded by the airlines) recovered only £80,000 in the first six months since the October 2012 clarification, then you can see that passengers are either not aware of their rights or are not being properly compensated.
Moreover, claims in the UK can be made for flights as far back as six years so this means that there is potentially over £3bn in compensation owed by airlines for flights since the autumn of 2007.
Who should pay?
In terms of the impact on ticket prices, based on the current number of people claiming, the equivalent cost is just £0.60 on each ticket and if 100% of passengers recovered their rightful compensation that figure would only rise to £2.50.
While this is a small price to pay to ensure you get compensation if your flight’s delayed 24 hours and you miss a business meeting or your holiday is ruined, it doesn’t mean airlines should be passing on the cost to consumers. After all, the main aim of the Regulation is to encourage airlines to adapt their services to reduce the occurrence of excessive delays.
About Bott Aviation
We recover compensation for passengers using a unique blend of technical knowledge, flight data, and legal expertise and, while we always suggest passenger try and claim the compensation direct from the airlines, we’re here to step in when needed. Our free online claim checker tells people instantly whether their flight is claimable and we offer a free claim letter to send to the airlines.