Airlines Must Pay for Denied Boarding, EU Top Court Says

Airlines must compensate passengers who were prevented from boarding their flights as a result of a strike or a delayed earlier flight, the European Union’s highest court said.

An “extraordinary” event, such as a strike, that prompts an airline to reschedule subsequent flights “does not give grounds for denying boarding or for exempting that carrier from its obligation to compensate passengers,” the EU Court of Justice in Luxembourg ruled today. In a separate case, it ruled that compensation is also due when boarding on a connecting flight is denied after a delayed first flight.

Under EU law, airlines are obliged to compensate passengers who are denied boarding. Rulings by the EU court in recent years have clarified that carriers must compensate passengers on flights that are delayed by more than three hours or canceled because of mechanical problems.

Iberia Lineas Aereas de Espana SA refused in December 2009 to compensate passengers who couldn’t get on a connecting flight after their earlier flight arrived late. The passengers, who arrived just as the final call for boarding was announced, found their tickets had been canceled and their seats taken. Finnair Oyj (FIA1S) refused in July 2006 to compensate a passenger who couldn’t board his flight, which departed two days after an airport strike that had created a backlog of passengers.

Health & Safety

The court ruled that the protection for passengers would be “substantially” reduced if the scope of “denied boarding” was limited only to cases of overbooking.

Under EU law, reasons of health, safety, security or inadequate travel documents can justify a passenger being denied boarding. In today’s cases, the court said, the reasons for the denied boarding were not attributable to the passengers.

“It is good that there now is a clear ruling for these kind of situations, so that airlines can better plan their operations in a similar situation,” Paivyt Tallqvist, a spokesman for Finnair, said by e-mail.

The cases are: C-22/11, Finnair Oyj v. Timy Lassooy; C- 321/11, German Rodriguez Cachafeiro and Maria Reyes Martinez- Reboredo Varela-Villamayor v. Iberia Lineas Aereas de Espana SA.

To contact the reporter on this story: Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net

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