EU - Airlines lose compensation battle

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Source: Evening Standard newspaper (UK)

Airlines lose compensation battle
10 January 2006

European airlines have lost a legal bid that aimed to strike down new EU rules guaranteeing passengers compensation for flight delays or cancellations.

The European Court of First Instance dismissed the airlines' claims that the rules infringed international agreements and breached existing legal principles.

The International Air Transport Association - which represents 270 carriers worldwide - estimates that the regulation will cost the industry more than 600 million euros (£411million) a year.

The added cost comes at a time when airlines are facing higher fuel charges and increased competition.

The new rules came into force in February.

They force airlines to pay passengers up to 600 euros (£411) if they are bumped off a flight, double the previous limit.

Similar compensation is on offer if the airline is held responsible for cancelling a flight.

Delays of two to four hours will require airlines to serve snacks or full meals, while delays over five hours entitle passengers to a refund and a hotel room if necessary.