Ryanair May Have to Compensate Passengers in Volcano Delays

Ryanair Holdings Plc (RYA), Europe’s biggest discount carrier, should pay for passengers’ hotels, meals and transport after a volcanic explosion grounded flights, an aide to the European Union’s top court said.

EU law requires airlines to provide care for passengers stranded by “extraordinary circumstances,” and the eruption of an Icelandic volcano in April 2010 that closed European airspace qualifies as such an event, according to a non-binding opinion today by Yves Bot, an advocate general for the EU’s Court of Justice in Luxembourg.

Bot believes “the provision of care to air passengers is especially important and essential where their flights have been canceled as a result of the eruption of a volcano,” the court said in a statement about the opinion.

The eruption of the Eyjafjallajokull volcano in Iceland two years ago caused airlines to cancel more than 100,000 flights on concern glass-like particles spewed into the atmosphere might clog aircraft engines. The shutdown of airspace cost carriers at least $1.7 billion, while European transport ministers took five days to agree airports could open with the dust still in the air.

Ryanair, based in Dublin, canceled about 9,400 flights during the event. It refunded all of the passengers’ tickets and processed 90 percent of their “reasonable expense claims” at a cost of about 32 million euros ($42 million), according to a November 2010 regulatory filing at the time.

‘Blatant Discrimination’

Ryanair argued the eruption qualified as an event that was “above and beyond” the kind of extraordinary circumstances that require airlines to provide meals and hotel rooms for stranded passengers under EU law, according to the court’s statement.

The block’s current rules expose airlines to “unlimited liability, even in cases such as volcanic ash,” Ryanair spokesman Stephen McNamara said in an e-mailed statement. “We hope the final court decision will find in favor of Ryanair’s appeal and remove the blatant discrimination.”

The EU court is advising an Irish tribunal on a claim by Denise McDonagh for about 1,130 euros in damages that she sought from Ryanair to pay for meals, accommodation and transport when her flight from Faro, Portugal, to Dublin was canceled. She was stranded for a week, the court said today.

Bot said the provision of care is “particularly important” in the case of extraordinary circumstances which persist over a long time, according to the court’s statement.

“It is precisely in situations where the waiting period” is lengthy “that it is necessary to ensure that an air passenger whose flight has been canceled can have access to essential goods and services throughout that period,” Bot said in his opinion.

Although the legal adviser’s opinion isn’t binding, such advice is followed by the court in the majority of cases.

The case is C-12/11 Denise McDonagh vs Ryanair Ltd.

To contact the reporters on this story: Erik Larson in London at elarson4@bloomberg.net; Steve Rothwell in London at srothwell@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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