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Compensation for cancelled flights and COVID-19

The spread of COVID-19 (the coronavirus) is now classified by the World Health Organisation as a pandemic[1]. Amongst the pervasive economic disruption, the commercial aviation industry has been hit hard by the unprecedented travel restrictions imposed by governments around the globe.

Increasingly restrictive travel bans have necessitated the widespread cancellation of flights. Under European Union Regulation 261/2004 (“EC 261”) airlines are obligated to provide passengers with reimbursement or re-routing, along with care/assistance, in the event of the cancellation of flights which fall within the scope of the regulation. These duties are always applicable. In addition, where the cancellation occurred on less than 14 days’ notice, airlines are required to provide compensation (up to a maximum of 600 EUR per passenger).

However, airlines may be exempt from the obligation to provide further compensation to passengers where the cancellation of a flight can be shown to be caused by an ‘extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken’.

COVID-19: an ‘extraordinary circumstance?’

The category of ‘extraordinary circumstances’ within the meaning of EC 261 is fairly narrow. It generally requires the recognition of the European Court of Justice (“ECJ”) for the meaning to be expanded (e.g. bird strikes in the case of  Pešková and Peška[2] in 2017). Both the EU Commissioner for Transport and the UK Civil Aviation Authority (“CAA”) helpfully publicised their interpretations of the current situation as it relates to the application of EC 261 and both are of the view that COVID-19 constitutes an ‘extraordinary circumstance’. Whilst not strictly binding, these opinions make a contrary interpretation by the ECJ extremely unlikely.

Nevertheless, the respective advice of both the EU Commissioner for Transport and the CAA has emphasised that each cancellation must be assessed on an individual case-by-case basis. This means that airlines cannot use COVID-19 as a blanket excuse for cancellations without compensating passengers. Airlines intending to rely on the ‘extraordinary circumstances’ exemption for COVID-19 related cancellations must be mindful that the burden of proof is on the airlines in such scenarios and of the need to demonstrate, in each case, that:

  • there was a clear link between the extraordinary circumstances and the cancellation; and
  • the cancellation could not have been avoided even if all reasonable measures were taken

Whilst a travel ban at the intended destination for a flight would likely satisfy condition (a), a cancellation motivated by reduced passenger demand or financial viability would not be sufficient without other corroborative evidence.

Where a travel restriction causes the cancellation of a flight, it may be difficult to establish that ‘all reasonable measures’ were taken by the airline since these may, by nature of the dilemma, be sparse. However, where re-routing of the passenger remains a viable option this should be facilitated in so far as possible.

Practical steps for airlines:-

The challenges facing airlines during the present COVID-19 pandemic are unprecedented in their scope. Large scale cancellations are likely to cause significant cash flow problems for airlines as aircraft are grounded and passenger refunds necessitated in instances where re-routing is simply not feasible. However there are several steps that airlines may take to minimise their level of exposure arising from potential COVID-19 related EC261 claims:-

  • Informing passengers of anticipated cancellations as soon as possible prior to their flight, where possible, more than two weeks in advance of the relevant flight. Where the cancellation is at short notice, as many unavoidably will be in the circumstances, ensure that adequate provision is made to provide passengers with the level of care and other assistance mandated by EC261.
  • Keep detailed records in respect of each cancellation, each record should include information that was material to the decision to cancel the flight including but not limited to:
    • Any travel bans that restricted, disrupted or precluded the scheduled flight(s);
    • Symptoms of any unwell passengers or crew; and
    • Any reasonable measures taken in an effort to avoid the cancellation.
  • Facilitate the re-routing of passengers in so far as possible, and where acceptable to the passenger, at a later date. This option may assist in warding off immediate cash flow problems caused by large scale total reimbursement of passengers.

Scope

This briefing focuses on potential COVID-19 related EC 261 claims for cancellation of flights. Airlines may also wish to consider their duties in relation to passengers who seek to travel whilst unwell and whether, given the enforced proximity of planes (as well as circulated air), they should be refusing to carry persons who are showing symptoms at the time of boarding.

If your airline requires advice relating to the COVID-19 pandemic or management of claims generally, please contact one of the authors of this briefing using the details alongside.

[1] https://www.who.int/emergencies/diseases/novel-coronavirus-2019/events-as-they-happen

[2] C-315/15 – Pešková and Peška


Disclaimer

This briefing is for guidance purposes only. RadcliffesLeBrasseur LLP accepts no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommends that appropriate legal advice be taken having regard to a client's own particular circumstances.

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