Opinion of the Economic and Social Committee on the "Communication from the Commission to the European Parliament and the Council: Protection of air passengers in the European Union"

(2001/C 155/02)

On 26 June 2000 the European Commission decided to consult the Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the above-mentioned communication.

The Section for Transport, Energy, Infrastructure and the Information Society, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 6 March 2001. The rapporteur was Mr von Schwerin.

At its 380th plenary session of 28 and 29 March 2001 (meeting of 28 March) the Committee unanimously adopted the following opinion.

1. Introduction

The purpose of the Commission Communication on the protection of air passengers in the European Union is to improve the protection of air passengers' interests.

On the one hand, the Commission has launched a campaign to make passengers aware of their existing rights under Community legislation. On the other, it is looking to adopt legislation to improve the protection of air passengers' interests. However, it is also seeking voluntary commitments from airlines, and wants (i) to make it possible to compare airlines' performances and (ii) to strengthen the representation of passenger interests.

2. Gist of the Commission proposal

2.1. The Commission intends to adopt legislation in order to:

- enable delayed passengers to continue their journeys under good conditions, by giving them the right either to reimbursement of the ticket or to an alternative flight at the earliest opportunity;

- create new rights for passengers in cases of overbooking (denied boarding) and by setting minimum requirements for contracts in air travel;

- give passengers the information they need to make well-founded choices between airlines.

2.2. The Commission is seeking to promote the preparation and adoption of voluntary commitments by European airlines.

2.2.1. The Commission feels that airlines should adopt voluntary commitments designed to improve service quality as widely as possible.

2.2.2. Airlines should provide adequate care for delayed passengers.

2.2.3. Airlines should undertake to introduce simple procedures for lodging complaints and mechanisms for settling disputes out-of-court.

2.3. The Commission also wants to promote voluntary commitments by airports to set quality standards for services and to consider design standards for terminals. The Commission will continue to strongly encourage the involvement of all interested parties and act as coordinator when the responsibilities of airlines and airports overlap.

2.4. The Commission also intends to take the following initiatives:

- to discuss how best to strengthen the representation of passengers with Member States and passengers' organisations (consumer associations);

- to examine the effects on the market of sales and reservations via the Internet and their conformity with competition rules and the code of conduct for computer reservation systems (CRS);

- to study the effects on competition of code-sharing, in the context of individual competition proceedings, and of tariff co-ordination in interlining, in its review of the block exemption for interlining;

- to assess the impact of cabin conditions on passengers' health, by setting up expert groups to scrutinise existing research and draw conclusions on risks to health.

3. The Committee's comments

3.1. The Committee welcomes the Commission's plans to improve the protection of air passengers in the European Union and shares the Commission's view on the need to strike the right balance between Community legislation and voluntary commitments by airlines and airports. The Committee feels that legislation should be enacted laying down minimum requirements for air passengers' inalienable rights and that airlines and airports should enter into voluntary agreements which supplement this legislation. Adding its voice to the call made by the EU Council(1) on this issue, the Committee thinks that the voluntary agreements by airlines should certainly be in place by May 2001. If voluntary agreements by airlines and airports fail to address consumer rights adequately, the Committee feels that the entire field should be regulated by legislation. Air passengers must be fully informed of their contractual rights in so far as these are covered by airlines' conditions of carriage.

3.2. The absence of the proposed "chain of contracts" between airports, airlines and other service providers is one of the main problems facing air transport. Normally, since a company is able to select subcontractors and suppliers according to its own criteria, it is also liable for any substandard performance on their part. This does not apply in air transport. Airlines have no influence on the airport as runway provider or on air traffic control. The Committee feels it would be unreasonable to make air carriers liable for shortcomings in these areas. Particularly in the field of air traffic control, the Commission is called on to submit and implement suitable proposals for improving the current situation.

3.3. Other legislation already contains a host of provisions to protect air travellers from sharp practices (Directive 93/13/EEC on unfair terms in consumer contracts)(2). Enforcement of this protective legislation is no longer a matter for the Commission, but falls within the remit of the ordinary courts and ultimately the ECJ. Many of the problems cited by the Commission are covered by Directive 93/13/EEC. However, consumer rights and fares - insofar as they can be specified - must be made transparent. The rights of consumers affected by overbookings (denied boarding) and flight cancellations must be improved. The Committee would refer to its opinion on Directive 93/13/EEC(3).

3.4. The Committee fully endorses the view that Community legislation should not compromise companies' international competitiveness. Air safety must, however, always have top priority, and an appropriate level of passenger protection must be guaranteed.

3.5. It is possible to book flights and issue tickets 365 days in advance. In so far as the potential passenger is simply making a non-binding declaration of intent, the Committee regards a fare increase by the airline as not being inappropriate. However, once there is a binding contract between the passenger and the airline or the ticket has been paid for, the Committee thinks that the airline should not be allowed to increase the fare.

3.6. As the Commission itself notes, airlines are obliged under the current CRS code to inform passengers which carrier is operating the flight. At the same time, the Committee thinks that legislation should be enacted to close any legal gaps that may still remain.

3.7. The issue of which contract conditions apply in the case of code-sharing is normally resolved in the conditions of carriage of the particular airline. Moreover, under existing contract law, liability is always borne by the contracting carrier, and possibly by the operating carrier as well. Air passengers thus already have at least one clearly defined party to whom a claim may be made (the contracting carrier) and will in many cases have two. For the sake of legal certainty, the Committee nonetheless thinks that the question of liability on code-sharing flights must be the subject of voluntary or statutory arrangements.

3.8. The Committee supports the blanket transferability of air tickets, whereby steps must be taken to ensure that the conditions governing special fares cannot be systematically circumvented by "phantom bookings" which are then passed on to late bookers. The number of no-shows might also rise, since agents would not sell their entire reserve stock of booked flights. This could disadvantage passengers on the waiting list for a specific flight. In this connection, the Committee welcomes the new IATA conditions of carriage (period of validity of a ticket, free baggage allowance, refunds, liability for damage).

3.9. The rule on the sequential use of flight coupons is part of the product and price structure. It enables account to be taken of different market conditions and currency areas. More time-consuming indirect flights can be made attractive by making them cheaper than non-stop services. Dispensing with this rule would remove company control over pricing. This also applies to the reverse use of outward and return flight coupons. Incidentally, this arrangement is also provided for under the IATA's conditions of carriage.

3.10. The Committee fully supports the call for universal standards for the carriage of disabled people across the entire system. The Committee feels it is important that universal standards also apply to international journeys. These standards should be included in any move to align transport conditions on North Atlantic routes.

3.11. The Committee endorses Commission moves to improve the rights of disabled people and, for example, to introduce legislation providing them with assistance to and from the aircraft free of charge or ensuring that the cost thereof is covered. The Committee welcomes uniform and transparent rules on restrictions placed on the carriage of disabled people for safety reasons.

3.12. The Committee feels that the information to be provided to air passengers under the Commission proposal should be as comprehensive as possible.

3.13. As for the proposed voluntary commitment to ensuring baggage delivery within a given time, a distinction must be made as to the service provider. This is partly the airport, which is responsible for infrastructure in particular, but in some cases it is the airline. The Commission is therefore asked to find a voluntary solution with the actual party responsible for baggage delivery, which will improve matters on this front. A counter-objection to the call for higher limits on liability for baggage is that this issue will be covered under the Montreal Convention. In the light of the expected ratification of the Montreal Convention, the Committee considers that a voluntary commitment to apply this convention straightaway would make sense and be in the consumer's interest.

3.14. The Committee welcomes the work of the ACI (Airport Council International) to develop standards for European airports. Realistically, as with all transport operations, compliance with these standards cannot be expected at absolute peak times, such as the start of holiday periods. In any case, airport design standards such as transfer times, walking distances etc. are contingent on local conditions and cannot be laid down in an arbitrary way. Capacity cannot be increased at will. The Committee thinks it would be useful for each airport to indicate the voluntary services it offers.

3.15. The Committee feels that the inconvenience caused by delays cannot be equated with the problems caused by cancellation or denied boarding. Minor delays should not in principle trigger the payment of compensation. However, a reduction in the fare should be considered where a long delay is demonstrably the fault of the airline. On the other hand, passengers denied boarding because of overbooking must be compensated. It is essential to care for passengers while they are waiting - an obligation which should be made incumbent on airlines. The right to a fare refund should continue to apply only in the event of non-carriage.

3.16. The Committee shares the Commission's view that, in the case of delays, it is difficult to pass on the costs involved to the responsible party. However, in accordance with the principle that whoever is responsible pays, it should be possible to claim compensation from the party which has caused the delay if this can be proved. In air transport, safety must nevertheless always come first in any commercial decision.

3.17. The standardisation in passenger care sought by the Commission should be secured by introducing legislation on minimum standards. The Committee feels, however, that the Commission should aim for a high level of passenger care and should call on airports and airlines to make improvements on this front, inter alia by concluding voluntary agreements.

3.18. Consumer reports are to be drawn up to make airline and airport performance standards more transparent. The example given is that of the United States. The USA is a homogenous market. In the EU, on the other hand, there is much less market comparability. Hence, a comparison can be made only of equivalent airline and airport services for which the airlines and airports themselves are responsible. The Commission should ensure a fair procedure if its aim is to make performance standards more transparent and to offer passengers the fullest information possible.

3.19. Little would be gained from providing data on the proportion of low-price tickets. In addition to normal economy fares, a whole range of special fares is offered on a seasonal basis only. On each route, the proportion of lowest-fare tickets varies since this is a sales management tool designed to fill any residual capacity. The transparency being called for with regard to fares is difficult to implement meaningfully, because fares change almost daily. However, despite these difficulties, the Committee feels that passengers should be given as much information as possible in a way that is as simple and transparent as possible.

3.20. The Committee supports the disputes settlement scheme proposed by the Commission if a practicable procedure can be found.

3.21. Any passengers' organisation must have legitimate credentials, i.e. it must be representative of the consumer. A suitable proposal to this effect has not yet been presented. Consumer associations should therefore be involved in the search for appropriate machinery to represent air passengers' interests.

4. Concluding remarks

4.1. The Committee backs the Commission's intention to improve the protection of air passengers' interests.

4.2. The Committee feels that legislation should be enacted laying down minimum requirements for air passengers' inalienable rights and that airlines and airports should enter into voluntary agreements which supplement this legislation. The voluntary agreements by airlines should certainly be in place by May 2001. If voluntary agreements by airlines and airports fail to address consumer rights adequately, the Committee feels that the entire field should be regulated by legislation.

4.3. Both voluntary and statutory arrangements must make consumer rights and fares more transparent. The rights of consumers affected by overbookings (denied boarding) must be improved.

4.4. The Committee supports the blanket transferability of air tickets, whereby steps must be taken to ensure that the conditions governing special fares cannot be systematically circumvented by "phantom bookings" which are then passed on to late bookers. The Committee also welcomes the new IATA conditions of carriage (period of validity of a ticket, free baggage allowance, refunds, liability for damage).

4.5. The Committee endorses Commission moves to improve the rights of disabled people and, for example, to provide them with assistance to and from the aircraft free of charge or to ensure that the cost thereof is covered.

4.6. The Committee feels that the Commission should ensure a fair procedure and compare equivalent services in the consumer reports it is planning in a bid to make airline and airport performance standards more transparent.

4.7. The Committee supports the disputes settlement scheme proposed by the Commission if a practicable procedure can be found.

4.8. The Committee feels that consumer associations should be involved in establishing machinery to represent air passengers' interests.

4.9. The Committee feels that this would serve both the Commission's aims and the interests of consumers, workers and employers in Europe.

Brussels, 28 March 2001.

The President

of the Economic and Social Committee

Göke Frerichs

(1) Council Resolution of 2 October 2000 on the rights of air passengers, OJ C 293, 14.10.2000, p. 1.

(2) Council Directive 93/13/EEC of 5.4.1993 on unfair terms in consumer contracts (OJ L 95, 21.4.1993, p. 29).

(3) Opinion of the Economic and Social Committee on the Proposal for a Council Directive on unfair terms in consumer contracts (OJ C 159, 17.6.1991, p. 34).