As recognized and declared to be a pandemic by the World Health Organization on March 11, 2020; as of March 25, 2020, COVID-19 (“the virus”) has caused around 435,000 confirmed cases with up to 112,000 recoveries, and around 19,700 deaths globally. While the mortality of the virus continues to affect human beings by spreading around the countries exponentially, its negative economic impact is also widening around the world crucially.
Although it is obvious that all industries and sectors have concretely been affected in terms of loss of revenues; some companies in specific sectors have had to cease almost all their operations due to the governmental measures taken to overcome the outbreak of the virus. Aviation is amongst the most hard-hit sectors, since most of the governments have started to apply strict precautions such as restriction on travel, lockdowns and many more measures affecting the industry, and thus the airline companies have faced the risk of not being able to meet their financial commitments.
This being the case, the European Commission has published the Interpretative Guidelines on European Union (“EU”) passenger rights regulations in the context of the developing situation with COVIC-19 on March 18, 2020(“Guideline”) in order to clarify how certain provisions of the EU passenger rights legislation with respect to cancellations and delays apply in the context of the COVID-19 by excluding the relevant Directive on package travel and linked travel arrangements. The Guidelines initially mentions a common application of specific rights and rules that apply to the passengers traveling by air, rail, bus and coach or ship for the virus. On this paper, we will only take the provisions specified with regards to the air passenger rights into the scope.
The Guideline makes reference to the relevant Regulation on air passenger rights in EU, which is the Regulation (EC) numbered 261/2004 which was published by the European Parliament and of the Council on February 11, 2004(“Regulation”).
I. Information to passengers
The Regulation covers the rights of the passengers in the cases of denied boarding and cancellation or long delay of flights in relation to the compensation rights of the passengers arisen thereof. Therefore, the Guideline only make references to the compensation rights on the information rights in the interpretation made for the virus.
II. Right to reimbursement or re-routing
Article 5 of the Regulation directs to Article 8 of the Regulation, the rights of reimbursement or re-routing, in the cases of cancellation of flight regardless of taking into consideration what the cause of the cancellation is. Accordingly, Article 8 of the Regulation provides for the following reimbursement and re-routing rights to the passengers:
“1. Where reference is made to this Article, passengers shall be offered the choice between:
(a) - reimbursement within seven days, by the means provided for in Article 7(3), of the full cost of the ticket at the price at which it was bought, for the part or parts of the journey not made, and for the part or parts already made if the flight is no longer serving any purpose in relation to the passenger's original travel plan, together with, when relevant,
- a return flight to the first point of departure, at the earliest opportunity;
(b) re-routing, under comparable transport conditions, to their final destination at the earliest opportunity; or
(c) re-routing, under comparable transport conditions, to their final destination at a later date at the passenger's convenience, subject to availability of seats.
The Guideline explains how the reimbursement right shall be used in two different cases: (i) same booking of the outbound and return flights and (ii) separate bookings for the same. Accordingly, the Guideline regulates that in the case of first instance above, even if these flights are operated by different air carriers, passengers shall be offered two (2) options if and when the outbound flight is cancelled: to be reimbursed for the both flights or to be re-routed on another flight for the outbound flight. In the case of (ii) above, and if and when the outbound flight is cancelled, the passenger is only entitled to reimbursement of the cancelled flight.
With regards to the right to re-routing, Article 8(b) of the Regulation is referred hereto this situation and re-routing, under comparable transport conditions, to their final destination at the earliest opportunity is stated to be applicable under the circumstances of the virus’ outbreak, since it is mentioned to be considered as a considerable delay.
To cut the story short, the Guideline takes the extraordinary situation emerged due to the outbreak of the virus into the regular rights to cancellation and reimbursement or re-routing, together with the processes to be applied therefor.
III. Right to care
Article 9 of the Regulation provides for the passengers’ right to care, and the provision reads as follows:
“Where reference is made to this Article, passengers shall be offered free of charge:
(a) meals and refreshments in a reasonable relation to the waiting time;
(b) hotel accommodation in cases
- where a stay of one or more nights becomes necessary, or
- where a stay additional to that intended by the passenger becomes necessary;
(c) transport between the airport and place of accommodation (hotel or other).
The Guideline states that the passengers shall also be informed on the application of providing the care in accordance with Article 9 of the Regulation and such right to care shall be in line with the time the relevant passenger has been kept waited, which means that the right to care shall be assessed in a case by case basis, and applied proportionally. The passengers, whose flights are cancelled by the air operators shall also be offered with the care in the relevant article of the Regulation.
For the passengers to be able to use their right of care, they should not fully enjoy their rights to reimbursement as provided under Article 8, and also their right to re-routing, under comparable transport conditions, to their final destination at a later date at the passenger's convenience. The passenger may choose their right to care while they are awaiting a re-routing to their final destination at the earliest opportunity.
The Regulation states that “extraordinary circumstances should be deemed to exist where the impact of an air traffic management decision in relation to a particular aircraft on a particular day gives rise to a long delay, an overnight delay, or the cancellation of one or more flights by that aircraft, even though all reasonable measures had been taken by the air carrier concerned to avoid the delays or cancellations”.
By this, we understand that the obligations on operating air carriers can only be limited or excluded in cases of long delays or cancellations caused by extraordinary circumstances. In other words, as the Guideline supports such interpretation, the air carrier is still obliged to fulfill the obligation of care even when the cancellation of a flight is caused by extraordinary circumstances.
The Guideline mentions that since the passengers also suffer from the extraordinary circumstances, it does not matter whether the period of such extraordinary circumstance lasts long; which means that the right to care shall be adequately provided to the passengers, especially the ones waiting for re-routing at the earliest opportunity.
IV. Right to Compensation
Pursuant to Article 5 (1) (c) of the Regulation;
“1. In case of cancellation of a flight, the passengers concerned shall:
(c) have the right to compensation by the operating air carrier in accordance with Article 7, unless:
(i) they are informed of the cancellation at least two weeks before the scheduled time of departure; or
(ii) they are informed of the cancellation between two weeks and seven days before the scheduled time of departure and are offered re-routing, allowing them to depart no more than two hours before the scheduled time of departure and to reach their final destination less than four hours after the scheduled time of arrival;”
According to the foregoing provision of Article 5 of the Regulation, the passengers shall be informed on the cancelled flight at least 14 days in advance and between 14 to 7 days in advance in case they are offered re-routing, allowing them to depart no more than two hours before the scheduled time of departure and to reach their final destination less than four hours after the scheduled time of arrival. In the case these conditions are not satisfied by the air carrier, then the passengers have the right to compensate as provided under Article 7 of the Regulation: (i) EUR 250 for all flights of 1500 kilometres or less; (ii) EUR 400 for all intra-Community flights of more than 1500 kilometres, and for all other flights between 1500 and 3500 kilometres; and (iii) EUR 600 for all flights not falling under (i) or (ii).
On the other hand, according to the Regulation, the right to compensate as explained in the foregoing paragraph shall not be applicable during the extraordinary circumstances, which could not have been avoided even the air carrier has taken all the reasonable measures. The Guideline states that the virus is considered by the EU Commission as an extraordinary circumstance, for which the air carriers could not take any reasonable measures to avoid these delays and/or cancellations, therefore the air carriers shall be exempt from the compensations provided under Article 5 (1) (c).
However, the Guideline provides for some exceptions, where the right to compensate shall be applicable even there is an extraordinary circumstance: (i) if the flight in question remain not affected by the operation prohibition imposed by the authorities; or (ii) even if the flight is affected to be ceased, if not all the passengers’ movement is prohibited (for example nationals or residents of the state concerned might be allowed to travel in some cases).
According to the Guideline, the air carrier operators may only enjoy the conditions of extraordinary circumstances as stated under Article 5 (3) of the Regulation if: (i) no such person would take an operating flight offered to them in the first instance and the latter remains empty. Then, the air carrier does not have to wait until the very last minute of such latter flight’s take-off and has the right to cancel such flight; and (ii) protecting the health of the crew is strictly required. However, in both of the aforesaid cases, the causal link between the cancellation of the flight and the extraordinary circumstance shall exist.
Upon reviewing the Guidelines, airlines were disappointed with the provisions of the Guideline as they think that the interpretation has been made far inadequate and provides quite limited help to air carriers considering the global and national negative impact of the virus, especially to the aviation sector, and that the Guideline does not offer any solution to the following requests of the air carriers:
Accordingly, Rafael Schvartzman, IATA’s Regional Vice President for Europe stated that “The Commission appears to considerably underestimate the crisis afflicting airlines in Europe. Faced with a cashflow catastrophe, many airlines can only offer vouchers in lieu of immediate cash refunds for cancelled flights. The Commission must accept that this solution – which many people would regard as reasonable in the current extraordinary circumstances – should be facilitated. The Commission needs to understand that fiddling at the edges will not keep airlines in any shape to get the economy moving again when the health crisis abates. This is not a short-term issue—air connectivity will not be back to normal for many months. And for some airlines, things will never be the same again,”.
Therefore, in the current situation, the EU air carriers seek the Commission to publish further, adequate measures, which correspond to their urgent requests and needs in the long run, and as long as the virus keeps affecting the sector negatively.