Select Committee on European Scrutiny Twenty-Third Report


COM(01) 784

Draft Regulation establishing Common Rules on compensation and assistance to air passengers in the event of denied boarding and of cancellation or long delays of flights.

Legal base:Article 80(2) EC; co-decision; qualified majority voting
Department:Transport, Local Government and the Regions
Basis of consideration:EM of 13 February 2002
Previous Committee Report:None; but see (18874) 5818/98: HC 155-xxi (1997-98), paragraph 10 (11 March 1998)
To be discussed in Council:Not known
Committee's assessment:Politically important
Committee's decision:Not cleared; request to be kept informed


  6.1  One in 1,000 air passengers having seat reservations with European airlines are denied boarding by the airlines because of overbooking. Many passengers also face long delays or cancellations. According to the Commission:

    "Roughly one quarter of a million air passengers each year get a bad surprise at EU airports when checking­in for their flight. They have bought a ticket and reserved a place. They are then told by the operator that their flight has been overbooked and they have to take a later one. Denied boarding causes passengers great inconvenience and loss of time. Equally bad surprises are cancellations without warning and delays that leave passengers stranded for hours at an airport."[18]

  6.2  Overbooking is deliberate, and widely used amongst scheduled airlines. It is justified by the airlines as a way of ensuring maximum use of capacity and hence maximum revenue. The Parliamentary Under-Secretary of State, Department for Transport, Local Government and the Regions (Mr David Jamieson) says in his Explanatory Memorandum of 13 February 2002:

    "There is always a proportion of passengers booked onto a flight who do not arrive at the airport, whether through missing connecting flights or because flexible ticketing allows them to catch a different flight with no penalty. Airlines use their past experience to estimate this number and sometimes overbook, to avoid flying with empty seats. On most flights their estimates are correct and no passengers are denied boarding. However, on some occasions more passengers want to fly than there are seats available and as a result some are unfortunately denied boarding."

  6.3  The Community has previously sought to provide some protection to passengers who are denied boarding. For example, in 1991 Council Regulation (EEC No. 295/91) was adopted, which established common rules for a compensation system for passengers denied boarding in scheduled air transport. The Regulation gave passengers the right to minimum financial compensation, to the choice between an alternative flight at the earliest opportunity, re-routing or reimbursement of the ticket and to assistance to reduce the inconvenience of waiting for a later flight.

  6.4  In 1998 the Commission sought to extend and clarify that Regulation. It proposed an increase in the levels of minimum compensation in line with inflation, and a widening of the scope of the Regulation to include passengers buying seats-only (as opposed to inclusive tours) on non-scheduled flights. The European Parliament widened the proposal further to include Community carriers flying from non-Community airports back to Community airports. The previous Committee cleared the proposal in March 1998. However, the proposal was subsequently stalled by the long- running dispute between Spain and the UK over Gibraltar airport.

  6.5  The Commission has now abandoned its 1998 proposal and has brought forward a new one.

The document

  6.6  The proposed Regulation is more ambitious than the previous proposal in that it seeks actively to deter the practice of overbooking, by means of high minimum levels of compensation, and extends its scope to include cancellation and delay. The Minister summarises the main features of the current proposal as follows:

    "—  Increasing by a factor of five the minimum amount of compensation for denied boarding (to euro750 for flights of less than 3,500 km and euro1,500 for flights of more than 3,500 km). The primary purpose of this stringent increase is to act as a deterrent to overbooking.
  • Requiring airlines to call for volunteers to surrender reservations in exchange for agreed benefits.

  • Extending the rights of passengers denied boarding to passengers whose flights are cancelled.

  • Requiring airlines to offer assistance to passengers in the case of delays and to allow the possibility of reimbursement of the ticket if the passenger no longer wishes to travel.

  • Extending the scope of the Regulation to include non­scheduled flights (for both seat­only and inclusive tour passengers).

  • Requiring airlines not to deny boarding to a disabled passenger and any accompanying person, to a passenger whose mobility is otherwise reduced or to an unaccompanied child.

  • More stringent obligations on airlines to inform passengers of their rights.

  • Obligation on Member States to lay down penalties applicable to infringement of the Regulation and to designate a body responsible for enforcement."

The Government's view

  6.7  The Minister says:

    "The UK Government strongly supported the proposed amendment of Regulation 295/91 in 1998.

    "We continue to support the revision and strengthening of the Regulation, but this proposal goes much further than the 1998 amendment. Some of the changes appear to have been ill-thought out.

    "In general we have concerns that the proposal has been brought forward without consultation and without sufficient regard either to the European voluntary commitments on air passenger service, which take effect on 14 February, or to the Directive on Package Travel which already provides protection for passengers travelling as part of an inclusive travel/accommodation package.

    "The Commission's intention behind the increased compensation is to deter airlines from overbooking. The rates have been set at twice the level of average business class fares. However, the British Air Transport Association (BATA) which represents most major UK airlines claims that the proposal as drafted would result in lower load factors, leading to increased pressure on aviation infrastructure and presumably higher fares. Even the Air Transport Users Council (the watchdog for the UK airline industry) has expressed concern that protecting a minority of passengers could be disproportionately costly for the majority. Many airlines already operate a system of calling for volunteers. In the United States there is also an obligation on airlines to call for volunteers and rates of involuntary denied boarding are some ten times less than in the EU (0.1 passengers per thousand compared to 1.1 per thousand on EU airlines). However, the maximum compensation level for denied boarding in the US is $400 (a level which has admittedly been unchanged since 1978 and is being reviewed). The US experience therefore suggests that an effective system of calling for volunteers is more important to reducing the rates of involuntary denied boarding than a stringently high rate of Denied Boarding Compensation.

    "The Commission does not discuss the possibility of requiring airlines to provide passengers with statistics on denied boarding, thereby informing their choice. This was suggested in their consultation in 2000 on reports of Service Quality Indicators, on which we await a legislative proposal.

    "Charter airlines are particularly concerned about the inclusion within the proposal of inclusive tour passengers travelling on charter flights. Charter airlines do not deliberately overbook in the same way as scheduled airlines as they do not offer flexible fares. Neither do they cancel flights other than in extreme circumstances. Passengers on inclusive tours are already covered by the Package Travel Directive in respect of cancellation or changes to the service and there would seem to be no case for extending the provisions of the Denied Boarding Compensation Regulation to them, since to do so might cause confusion. In addition, it would be impractical for such passengers to be given the right to reimbursement of their ticket as the price of the flight is not separately itemised in the package. The Government is therefore minded to oppose the inclusion of inclusive tour passengers within the Regulation, whilst accepting that seat­only passengers on charter flights should be covered.

    "The proposal overlaps to some extent with the European Airline Passenger Service voluntary Commitment, which takes effect on 14 February and to which all the major full­service UK airlines (scheduled and chartered) are signatories. For example, under the Commitment, in the event of overbooking, airlines undertake first to seek volunteers who are prepared to stand down from the flight. This clearly has the same purpose as Article 5 of the proposal which obliges airlines to operate a system of calling for volunteers. In addition, airlines are committed to providing appropriate assistance, for example refreshments, meals and accommodation, to passengers facing delays beyond two hours, provided that local conditions allow for such assistance to be delivered. Article 11 of the denied boarding proposal requires airlines to provide similar assistance in the case of delay to disabled or reduced mobility passengers and to unaccompanied children. However, we accept that the Commission has consistently stated that it will propose legislation on denied boarding, and that it would not be acceptable to allow non-signatories to the voluntary commitments to be treated more leniently in this area.

    "In summary, the Government supports the need to update and strengthen the existing Regulation but considers that this proposal will need to be considered carefully and that amendments to both the substance and detail may be required before it is acceptable."


  6.8  There is widespread agreement that it is unacceptable for airlines to deny boarding to passengers with reservations simply because the airline has overbooked the flight. Too many people are refused boarding or are faced with long delays or even cancellations. The inconvenience caused should not be underestimated.

  6.9  The proposal requires airlines to call for volunteers, but backs this up with compensation levels that seek to discourage airlines from deliberately overbooking.

  6.10  We note that, although the risk of a passenger in the EU being denied boarding is low, it is still some ten times greater than in the US where there is an obligation on airlines to call for volunteers. In the EU there is no obligation, although many airlines in the EU operate a system of calling for volunteers.

  6.11  We recognise that overbooking is used by airlines to ensure maximum use of capacity and protect their revenue, which is especially important given the difficulties that airlines currently face. However, the strong commercial case that airlines have for overbooking underlines the need for passengers to be given protection in the form of generous compensation. We consider that compensation levels should be sufficiently high to discourage overbooking and make it worthwhile for airlines to offer attractive packages, including free flights, to encourage volunteers to surrender their reservations.

  6.12  We hold the document under scrutiny and ask the Minister to inform us of the progress of negotiations.

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