COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to the second subparagraph of Article 251 (2) of the EC Treaty concerning the common position of the Council on the adoption of a regulation of the European Parliament and of the Council establishing common rules on compensation and assistance to air passengers in the event of denied boarding and of cancellation or long delay of flights

2001/0305 (COD)

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to the second subparagraph of Article 251 (2) of the EC Treaty concerning the common position of the Council on the adoption of a regulation of the European Parliament and of the Council establishing common rules on compensation and assistance to air passengers in the event of denied boarding and of cancellation or long delay of flights

1- BACKGROUND

Date of transmission of the proposal to the EP and the Council (document COM(2001) 784 final - C[5-0700/2001] - 2001/0305(COD)): // 21 December 2001

Date of the opinion of the European Economic and Social Committee: // 17 July 2002

Date of the opinion of the European Parliament, first reading: // 24 October 2002

Date of transmission of the amended proposal: // 4 December 2002

Date of adoption of the common position: // 18 March 2003

2- OBJECTIVE OF THE COMMISSION PROPOSAL

Council Regulation (EEC) 295/91 of 4 February 1991 established rules for compensation and assistance to passengers when denied boarding to a scheduled flight. While an important step forward in protecting passengers affected by denied boarding, the regulation did not reduce the number of passengers affected to a reasonable level. Nor did it cover cancellations when the responsibility of carriers or long delays, despite the serious inconvenience that they caused.

To fill these gaps, the Commission adopted a proposal for a new regulation to replace Regulation (EEC) 295/91. As regards denied boarding, the first aim was to reduce the frequency of the practice, by inducing carriers to find volunteers to give up their reservations in exchange for benefits, instead of denying passengers boarding against their will. Others were fully to compensate passengers when actually denied boarding, to allow them to cancel their flights or to continue travel under satisfactory conditions and to ensure adequate care for those waiting for later flights.

In the case of cancellations its the purpose was to discourage cancellations for commercial reasons and, when they happened, to reduce the inconvenience to passengers. To achieve this, airlines would be induced to give advance notice of cancellations and agree with passengers the conditions for surrendering their reservations. When this did not happen, they would have to compensate and assist passengers as if they had been denied boarding. Finally, the proposal contained limited rights for passengers facing long delays, allowing them to cancel their flights or to continue travel under satisfactory conditions.

The scope of the proposal was wider than that of Regulation 295/91, extending to both scheduled and non-scheduled (charter) flights. In this way passengers on package tours would enjoy the same protection as others.

3- COMMENTS ON THE COMMON POSITION

The Council made some general changes relative to the Commission's proposal that are acceptable because they would ensure its aims were met.

The first concerns responsibility for fulfilling the obligations of the regulation. In its initial proposal the Commission placed responsibility on the carrier or tour operator with whom the passengers had a contract, for the sake of clarity and simplicity. At its first reading the Parliament recommended sharing responsibility between these parties and the operating carrier in certain circumstances. The Commission refused this change, as it could create legal uncertainty and confuse passengers. The Council adopted a simple solution (Article 3.4 of the common position), laying all obligations to compensate and assist passengers on the operating carrier. This is practical, as the operating carrier is usually best placed for ensuring flights go according to plan and has personnel or agents at airports to help passengers. It is also straightforward and simple, so easily understood by passengers.

Second, in Article 7 the Council adopted levels of compensation considerably lower than those proposed by the Commission, namely 250, 400 and 600 EUR. While preferring higher rates, the Commission considers those adopted by the Council to be significant increases over the levels set by the present regulation and sufficient to create incentives for carriers to find volunteers, instead of denying passengers boarding against their will, and to give advance notice of cancellations.

The third change concerns rights and obligations in the case of cancellations. The Commission's proposal was intended to lead carriers to give passengers advance warning and to make alternative arrangements with them. The Parliament accepted this approach but recommended limiting the scope to cancellations made less than seven days before the scheduled time of departure, which the Commission accepted. In its common position (Article 5.1c), the Council followed this approach in the case of compensation, but not of other rights, while adding a second condition: passengers would only be compensated if not informed a specified number of days in advance and if not offered alternative flights allowing them to reach their destinations with less than a specified delay. This would link compensation more closely to the trouble and inconvenience caused by cancellations.

Finally, the Council has adopted more extensive rights for passengers facing long delays. The Commission proposed that they should be entitled to a choice between a refund of their tickets and re-routing. The Parliament, however, considered that this could cause confusion and further delays and recommended that passengers receive the right to care (meals and accommodation) when the delay was not caused by force majeure. The Commission accepted this in its amended proposal. In Article 6 of its common position, the Council has given passengers both these rights, which further strengthens their protection.

The Commission accepted wholly or in part twenty-two out of the forty amendments proposed by the European Parliament at its first reading. Of these, the Council has included seventeen, either literally or in principle, in its common position.

4- COMMISSION DETAILED COMMENTS

4.1 Amendments accepted by the Commission and incorporated in full or in part in the common position

The references below are to recitals and articles of the common position.

Amendment 8 part. In Recital 14, the Council lists circumstances that may exempt carriers from various obligations in the event of cancellations and delays. This is similar to the list proposed by the Parliament and incorporated by the Commission in Recital 8a of its amended proposal. However, the Council did not follow the Parliament in referring to "force majeure" but used the term "extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken."

Amendments 9 and 10 Article 2 (i) and (j) includes definitions of "denied boarding" and of "volunteer". The conditions that passengers must meet to benefit from the regulation are specified in Article 3.

Amendment 11. Article 5.1c) limits the right to compensation to cancellations notified less than a certain time before departure (see third general comment above). The common position does not mention computerised reservation systems as not all flights are booked through them.

Amendment 12. Under Article 2 (h), the standard definition of a "person with reduced mobility" of the European Civil Aviation Conference is introduced.

Amendment 22 part. Article 11.1 states that carriers shall give priority not only to passengers with reduced mobility but also to certified service dogs.

Amendment 25 part. Article 8.1c) introduces the condition "subject to availability." This makes clear that carriers would not be obliged to organise flights specially for passengers affected by denied boarding or cancellation.

Amendment 26. Article 9.2 gives the right to two communications free of charge. This enables passengers to communicate to both their points of destination and departure, as the amendment provides.

Amendment 27. Article 9.1c) entitles passengers to free transport between the airport and place of accommodation.

Amendment 29 part. Artice 5.1c) follows the principle the idea of limiting compensation to cancellations made less than a certain time before departure (see third general comment above). It also obliges carriers to explain alternative means of travel when informing passengers of cancellations.

Amendment 31 part. In Article 6.1, the common position exempts carriers from the obligation to care for passengers, when not responsible for a delay.

Amendment 32. Article 11.2 obliges carriers to care for passengers with reduced mobility and accompanying persons as soon as possible- not only in the event of delays but also of denied boarding and of cancellations.

Amendment 33 part. Recital 14 lists extraordinary circumstances under which carriers may not be responsible for delays or cancellations.

Amendment 34. Article 12.2 prevents passengers from claiming further compensation in court, when they have volunteered to give up their reservations, without prejudice to national law.

Amendment 36. Article 14.2 requires carriers, when denying boarding or cancelling, to give the contact details of the enforcement and/or complaints body designated by the member state.

Amendment 38. The first phrase of Article 16.2 clarifies that air passengers maintain their rights to go to court to claim further compensation, when they complain to a body designated by a Member State.

Amendment 42. Article 15.2 provides protection in the event of a company introducing restrictive clauses into contracts, despite the prohibition to do so, and of passengers accepting compensation inferior to that set by the regulation.

4.2 Amendments accepted by the Commission and not incorporated in the common position

Amendments 1, 6, 8 part, 28 part and 31 part. To define the circumstances under which carriers were exempt from certain obligations in the event of cancellations and delays, the common position does not use the term "force majeure" (recommended by the Parliament and accepted by the Commission), but rather "extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken."

Amendment 14 part. The amendment changes the time limit for presentation at the check-in desk, when a time is not stipulated, from thirty to sixty minutes.

Amendment 31 part. The amendment substitutes the right to care while awaiting a later flight, except when the delay is caused by force majeure, for the right to a choice between a refund and an alternative flight. However the common position gives passengers both rights (see final general comment above).

Amendment 39 part. The amendment places an obligation on the Commission to report no later than five years after the entry into force of the regulation instead of by 1 January 2008, as in the Commission's original proposal. The common position sets the date of 1 January 2006.

4.3 Amendments rejected by the Commission and not incorporated in the common position

Amendments 2, 3, 13 and 15. These exclude passengers on package tours so that the regulation would just apply to seat-only passengers

Amendments 4 and 21. The amendments require the allocation of the available places, in the event of overbooking, according to uniform criteria.

Amendment 5. This requires rules similar to those of the proposed regulation to be established for other modes of transport.

Amendment 7. The amendment defines the final destination as that shown on the last flight coupon on a ticket. This is only relevant to paper tickets and not to electronic ones, which increasingly replace them. In addition, the amendment removes from the scope of the regulation connecting flights that can be carried out without difficulty.

Amendment 14 part. This eliminates the obligation to stipulate the check-in time in writing.

Amendments 16, 17, 18, 19, 28 part, 29 part, 30 and 31 part. This establishes shared responsibility for meeting the obligations of the regulation, in the case of code sharing between several carriers and when logistically impossible for a tour operator to fulfil these obligations.

Amendment 20. This eliminates the definition of the price on which a refund should be based in the event of downgrading.

Amendment 22 part. This prohibits denial of boarding to passengers travelling with small children

Amendment 23. This reduces the rates of compensation to 200, 400 or 600 EUR depending on one of three distance bands. The amendment also provides that the Commission may adjust the rates in line with inflation every three years.

Amendment 24. As a consequence of amendment 23, this introduces three distance bands for the reduction of compensation if delays are below certain duration. The amendment also eliminates compensation in the case of delays of less than one hour.

Amendment 25 part. The amendment limits the obligation to reimburse tickets or to re-route passengers to the period of validity of the ticket.

Amendment 29 part. This would limit the coverage of cancellations to those made less than 48 hours before the scheduled time of departure.

Amendment 31. As a consequence of amendment 23, this introduces three distance bands for setting the time limits within which assistance must be offered to passengers facing delays.

Amendment 33 part. This limits the obligation to provide care to passengers in situations where local conditions allow it.

Amendment 35. This would ensure that carriers could make claims against any third party, even state bodies.

Amendment 37. This requires monthly comparative reports on the performance of airlines.

Amendment 39 part. This links the obligation on the Commission to report on the operation and on the result of the regulation to the designation of enforcement bodies under Article 17 of the Commission's proposal.

5- CONCLUSION

While it would have preferred higher levels of compensation, the Commission considers that the common position adopted on 18th March 2003 by qualified majority does not alter the aims and approach of its proposal and so can support it.