Dreaming of a [delayed or cancelled] white Christmas in Europe? How passengers are protected. Part 2

Part 1 of this article examined which passengers are protected under the Regulation and what the Regulation covers - see: Dreaming of a [delayed or cancelled] white Christmas in Europe? How passengers are protected. Part 1

Part 2 outlines the exclusions which apply to this coverage - examples of situations in which an airline would not be obliged to provide compensation.

Areas where the airline is excluded from liability

Extraordinary circumstances

Usually, the airlines' first (and arguably best) line of defence is claiming the delay or cancellation was caused by 'extraordinary circumstances' beyond their control. Examples include: political or civil unrest, security risks, hidden manufacturing defects in the aircraft or extreme weather.

For weather to be considered an extraordinary circumstance, it must be 'wholly exceptional' and subjectively determined. For example snow in London, which is not uncommon, may not ordinarily be an 'extraordinary circumstance' whereas snow in Ibiza, Spain might be. However in circumstances where an airport is forced to close, or air traffic control restricts aircraft movements into or out of a particular port - this would likely be considered an 'extraordinary circumstance'.

Beyond weather, freak events such as volcanic eruptions have been found to be 'extraordinary circumstances' whereas an English court recently found that bird strikes do not, given that they occur frequently enough and are reasonably foreseeable to allow airlines to take pre-emptive measures to mitigate resulting delays.

Aircraft technical problems

This issue was dealt with recently by the English Court of Appeal which ruled that "ordinary technical problems that cause flight disruption, such as component failure and general wear and tear, should not be considered 'extraordinary circumstances'".

Hidden manufacturing defects however, particularly in new models of aircraft, go beyond the scope of component failure or general wear and tear. As such, where they cause a delay or cancellation the affected airline can rely on the particular defect to justify an extraordinary circumstance.

Strikes

Where the strikes are the result of industrial action being taken by staff of the operating airline, ordinarily this does not constitute an 'extraordinary circumstance'. Where the strike is out of the airline's effective control (including air traffic control, ground handlers etc), then it will likely be deemed 'extraordinary'.

Striking a balance for both passenger and airline

Passengers travelling into, within, or from the EU are some of the best protected consumers of air travel. The global regulator ICAO together with industry bodies such as IATA are currently examining ways to achieve global uniformity in how consumers are protected when delays and cancellations occur.

Striking a balance, however, between consumer protection and maintaining commercial feasibility for the airline industry hasn't been easy. The industry has repeatedly expressed concerns that decisions being made every day by airlines for the purpose of ensuring passengers are conversely and concurrently exposing the airlines to very costly compensation liability.

There have been ongoing efforts to revise and refine the Regulation to ensure such a balance is maintained but striking a balance hasn't been easy. In 2013, then Director General and CEO of IATA Tony Tyler expressed the frustrations felt by the airline industry in this regard:

"Everybody is frustrated when travel plans are disrupted. And there is a legitimate role for governments to regulate protections for consumers. But to avoid unintended consequences, there needs to be a rigorous cost-benefit analysis. And no regulation should penalize airlines or their customers for airline decisions made in the best interest of safety"

Regulation 261 arguably remains a leading template which global airline regulators often look towards in relation to passenger protection. In Australia, the Australian Consumer Law Review cites the Regulation, as well as similar regimes in the United States and Canada, as an international benchmark in their ongoing review of consumer protection law in Australia.

So, for those travelling to Europe this winter, including from Australia and the Pacific, Regulation 261/2004 will provide an important source of protection to passengers in the case of delay or cancellation - when dreaming of a white Christmas becomes an unfortunate nightmare.