Airlines Refusal to Pay Compensation Claims!

Posted on February, 3 2015 by Blueway Limited

Airlines have been repeatedly taking their customers for granted on the issue of flight delays. Last year, the Supreme Court passed two judgements allowing passengers to claim compensation from airlines for inordinate flight delays. The two cases were Limited Vs Huzar and Thomson Airways Limited Vs Dawson. Despite the Supreme Court judgements, many airlines are still refusing to pay compensation, hiding behind technicalities.

The airlines have asked a court (Liverpool County Court) to allow them to delay paying compensation until the European Court of Justice, which is deliberating on a similar case, gives its ruling. Many claimants have also received letters saying that the compensation cannot be paid because the technical faults were caused by a ‘hidden manufacturing defect’. In short, they are saying that the airline manufacturer is to be blamed instead.


EU regulation on paying compensation for flight delays

EU Regulation 261/2004 says that if a flight lands at a destination more than three hours after the stipulated arrival time, the passengers are entitled to a compensation from the airline of  between Euros 250 and Euros 600 per person. The airline has to pay the compensation unless it can prove that the delay was caused by extraordinary circumstances, which were not in its control such as crew strikes or bad weather. The problems began when airlines started interpreting technical problems as extraordinary circumstances so that they could refuse giving compensation. It had been going on for years until the Supreme Court put its foot down in the Jet2 case and said that technical problems did not constitute extraordinary circumstances. The fallout of the two judgements is that thousands of harassed flyers can now claim flight delay compensation.

However, rather than paying the compensation, airlines are resorting to delaying tactics like filing petitions in courts for permission to wait until the European Court of Justice gives its ruling, and sending out letters to confuse flyers on the issue.


Why is the compensation payout being delayed?

Airlines are hoping that the ECJ will rule that technical problems can be classified as extraordinary circumstances. The case before the ECJ is Van der Lans Vs KLM, a Dutch airline. If the airline wins, it will not have to pay any compensation for flight delays on that account. If that does not work out, the airlines have another ace in the hole – hidden manufacturing defects.

The Supreme Court ruled on the issue last October, which means that airlines had to start paying compensation for flight delays since last year. However, the logjam over the pending ECJ judgement and the ‘hidden manufacturing defect’ argument has meant that no compensation has been paid in several cases. As a result, more than 2500 flyers have complained to the Civil Aviation Authority over the airlines’ refusal to honour the Supreme Court judgement.

The main reason why the airlines are refusing to pay compensation is because they think that these payouts will increase their costs. The argument does not hold water because the European Commission has already said that if everyone who could claim compensation did so, it would cost airlines just €2.50 more on a ticket.

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