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Will airlines ever automatically pay compensation?

European Union rulesThe European Union has a relatively strong consumer protection of airline passengers. Most relevant is the EU regulation 261/2004 that entitles passengers to compensation under certain circumstances. That may be delays of more than 3 hours that can be attributed to the carrier. Or it may be cancelations the airline can be blamed for.

Exceptional circumstances

For airlines there is one way out. If the delay or cancelation is due to exceptional circumstances passengers don’t have a right to compensation. Examples of exceptional circumstances are a medical emergency landing and a volcanic eruption producing ash clouds.

DelayHowever, passengers still have a right to care under those circumstances. Thus, if necessary, carriers have to offer hotel accommodation and transport between the airport and the accommodation. The care also includes food and drinks and 2 telephone calls, telex or fax messages or emails.

Amounts

If passengers have a right to compensation, the amount depends on the length of the flight. If the flight length is up to1,500 km (930 m) the amount is €250 ($280). For intra-EU flights of more than 1.500 km and all other flights between 1,500 and 3,500 km (2.175 m) it is €400 ($445). And for all other flights it is €600 ($666).

Airlines try to avoid compensation

ompensationPassengers must claim their compensation with the airline. However, most carriers are very reluctant to honor those claims. Tactics carriers use include:
* Not responding to claims.
* Just saying that the passenger is not eligible for compensation.
* Referring to exceptional circumstances without specifying them.

Claim industry

This saves the airlines a lot of money because many claimants drop out if the carrier does not respond or claims that the passenger it not eligible. The airlines’ apparent unwillingness to pay compensation seems an important reason for the rise of the claim industry.

CancelationsExamples are companies like EUclaim and Airhelp. They run well-organized web sites and work on the basis of No Cure, No Pay. If the claim is successful they take up to 50% of the compensation in reward, while they also claim cost with the airline.

Automatic payments

In 2018, a European Court of Auditors report dealt with the compensation problem. One recommendation (p. 34) is “obliging the carriers to execute automatic (without a specific request) compensation payments to passengers who have provided the necessary information at the time of purchasing the ticket." If there will be ever a bill to include this in the regulation, one thing is for sure: airlines will fight it frantically.

Related: “Which compensation do EU rules provide in which cases?

Tags: compensation, delay, cancelation, EU regulation 261/2004

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