COMMISSION OF THE EUROPEAN COMMUNITIES 
C0MC90) 99 final 
Brussels,24 April 1990 
Proposal for a 
COUNCIL REGULATION (EEC) 
on common rules for a denied boarding compensation system 
in scheduled air transport 
(presented by the Commission) 
G^wq<JP 
EXPLANATORY MEMORANDUM 
I. Introduction 
1. The proposed Council regulation aims at problems resulting from 
overbooked scheduled flights. Apart from malfunctions of 
reservation systems and an Insufficient exchange of information 
between travel agents and air carriers, overbooking is the result 
of the high degree of flexibility granted to passengers holding 
fully flexible tickets, i.e. having paid the full published 
economy, business or first class fare: They have the right not to 
present themselves for the flight for which they hold a confirmed 
reservation without losing the right to use this ticket without 
any additional charges on another flight to the same destination. 
2. The high degree of flexibility has, however, created the so-called 
"no-show"-problem: For various reasons a certain number of 
passengers book seats and do not claim them.it is usual 
international practice that airlines which understandably do not 
want to risk finding empty seats as a result of "no-shows" accept a 
certain degree of overbooking. This behaviour, however, implies the 
risk that the number of passengers holding confirmed reservations 
and presenting themselves within the usual time- limit for check-in 
will exceed occasionally the number of available seats on that 
flight. 
3. In principle, the air carrier's treatment of the passengers' 
interests In overbooking situations is a part of the quality of the 
service. One could therefore, in theory, argue that solutions to 
this problem should be left to the market. However, the level of 
the protection of consumers' interests In this field Is often 
unknown and, therefore, not open for quality of the service 
comparisons between different air carriers. A lack of transparency 
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is given. More competition will normally generate an Improved 
quality of the service and/or more attractive fares. It cannot be 
excluded, however, that certain air carriers might tend to neglect 
quality of the services considerations in areas In which 
transparency is widely lacking, i.e. the behaviour of an Individual 
carrier In overbooking situations. Under these circumstances the 
public intervention Is required in order to safeguard the interests 
of passengers. 
4. The need for Community action in this area, however, arises not 
only from the objective of establishing reasonable minimum 
standards for passengers In an area which Is normally not open for 
quality of the service comparisons between Individual air carriers. 
It has furthermore to be taken Into account that the economic 
environment In which air carriers have to operate has substantially 
changed and will continue to change following the Council measures 
of December 1987. These changes will lead to more competition and, 
as a part of this development, to a wider use of non fully flexible 
tickets. 
5. in such a situation two basic problems have to be overcome. The 
first one is to decide on the criteria to be applied in allocating 
priority for boarding amongst passengers who are denied boarding. 
The second one is the question of a reasonable compensation in 
favour of passengers who are denied boarding. The current practice 
on these problems differs substantially between air carriers. Some 
apply recommendations published by international organisations like 
iCAO (International Civil Aviation Organisation), ECAC (European 
Civil Aviation Conference), IATA (International Air Transport 
Association) or AEA (Association of European Airlines), whereas 
v/îiioi à apply their own internal guidelines or do nothing to protect 
the interests of passengers who are denied boarding. 
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6. One could argue that passengers not turning up for the flight for 
which they hold a confirmed reservation are mainly responsible for 
overbooking situations and that common rules should establish at 
least a certain kind of financial responsabiIity on behalf of these 
travellers. However, the higher fare for fully flexible tickets 
already Is said to take account of the no-shows by being based on a 
low (55%) break-even load factor. Furthermore, air carriers prefer 
to maintain the high degree of flexibility in favour of business 
travellers and are not prepared to establish measures aimed at 
actively discouraging no-shows. Thus, air carriers are fully 
responsible If an overbooking situation forces them to breach -de 
facto- in a number of instances contracts with passengers holding 
confirmed reservations. 
7. On the other hand passengers using non-fully-flexible tickets would 
seriously suffer from such a situation. They would In many 
instances forfeit their right for transport totally or partially If 
they do not turn up in time for a connecting flight irrespective of 
the reason for their delay. The air carrier In fact does get its 
money Irrspective of whether the traveller turns up or not. It 
could, therefore, be considered as a serious breach of contract by 
the air carrier concerned If these passengers (with fully flexible 
tickets) are denied boarding as a consequence of the behaviour of 
other passengers who do not forfeit their right for transport In 
similar situât ions. 
Therefore, the Commission has reached the conclusion that 
safeguards in favour of non-fully flexible ticket holders are 
required In order to establish a more reasonable balance of rights 
and obligations between air carriers and these passengers. 
8. In addition to the need for a special safeguard in favour of the 
interests of non-fully flexible ticket holders rules concerning the 
level of compensations should be introduced in order to establish 
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common standards for the protection of the Interests of passengers 
and to eliminate distortion of competition between air carriers 
resulting from different behaviours in with area of widely lacking 
transparency. 
9. The proposed Council Regulation envisages exclusively the relations 
between air carriers and passengers holding confirmed reservations. 
However, it should not be Ignored that the overbooking problems 
might occasionally also result from the behaviour of travel agents 
who confirm reservations without explicit acknowledgement from the 
air carrier. For these and other reasons the Commission's services 
are currently considering the development of a code of conduct for 
travel agents which inter alia would cover this aspect of the 
overbooking problem in scheduled air transport. 
1'• The structure of the proposed Council Regulation 
1. The attached draft Council Regulation mainly establishes criteria 
referring to the two basic problems mentioned above. Following a 
description of the scope of application (Article 1) and the 
necessary definitions (Article 2) it specifies some priority 
criteria to be applied by air carriers as soon as it Is evident 
that a certain flight Is overbooked (Article 3). Apart from the 
necessity to give due consideration to passengers being handicapped 
or travelling for reasons of death and illness of family members, 
it is proposed to impose upon air carriers the obligation to start 
the selection procedure with a call for volunteers who are preparer* 
to surrender their confirmed reservation on the basis of certain 
conditions. 
2. If the number of passengers who have not responded to the air 
carrier's call for volunteers still exceeds the number of available 
seats people such as the air carrier's own employees travel Iing for 
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private purposes on a fare basis which is not available to the 
public should step down first If they have not already been asked 
to step down. Passengers holding non-fully flexible tickets shall 
be given boarding priority. 
3. The second problem to overcome Is the compensation to be paid if 
passengers holding confirmed reservations are denied boarding. The 
proposed compensation amounts are linked to the delay caused by 
denied boarding (25% or 50% of the value of a fully flexible one 
way ticket - Article 4). In view of the serious potential damage 
for passengers losing -because of overbooking- their right to an 
onward flight to their final destination an obligatory compensation 
of 100% of the value of a fully flexible one way ticket is 
envisaged. 
In addition to these compensation amounts air carriers shall be 
obliged to provide further services In a reasonable relation to the 
additional waiting time (Article 5). 
4. Article 6 deals with situations in which the air carrier shall not 
be obliged to pay compensations. This shall in particular be the 
case if passengers fail to fulfil their obligations or prefer to 
seek, instead of accepting cash compensations, a compensation of 
the damage by using established laws on damage compensation. 
5. Article 7 contains obligations upon air carriers and Member States 
aimed at ensuring an effective and transparent implementation of 
the proposed Council Regulation. 
Article 8 contains provisions aimed to ensure the necessary 
transparency on the common rules to be established by the proposed 
Regulation. Article 9 contains the usual clauses with regard to the 
date of entry Into force. 
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Proposal for a 
COUNCIL REGULATION (EEC) 
on common rules for a denied boarding compensation system 
in scheduled air transport 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European Economic 
Community, and in particular Article 84(2) thereof, 
Having regard to the proposal of the Commission^1), 
Having regard to the opinion of the European Par I lament<2), 
Having regard to the opinion of the Economic and Social Commlttee^3), 
Whereas the Council measures taken in December 1987 represent a first 
step towards the establishment of a fully developed common air 
transport polIcy; 
Whereas Community action in the field of the protection of the 
interests of air transport users is required in order to ensure a well 
balanced development following the changes of the general environment 
in which air carriers have to operate; 
(1). 
(2) 
(3) 
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Whereas current practice in the field of denied boarding compensation 
differs substantially between air carriers; 
Whereas certain common minimum standards in the field of denied 
boarding compensations will contribute to ensure that more competition 
in air transport will not result in a deterioration in the quality of 
the air carriers' services; 
Whereas clear and transparent criteria for boarding In the event of 
overbooked flights are required; 
Whereas in particular such criteria should Improve the rights of non-
fully flexible ticket holders; 
Whereas air carriers have to be obliged to pay certain compensation 
amounts and to provide additional services to passengers who are denied 
boarding; 
Whereas passengers have to be clearly informed about applicable rules; 
Whereas it is appropriate that the Member States provide for a special 
procedure In dealing with complaints in case of denied boarding, 
HAS ADOPTED THIS REGULATION: 
Article 1 
This Regulation establishes common minimum rules applicable where 
passengers are denied access to a scheduled flight for which they have 
a valid ticket and a confirmed reservation departing from an airport 
located In the territory of a Member State of the European Community to 
which the Treaty applies irrespective of the State where the air 
carrier is established, the nationality of the passenger and the point 
of destination. 
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Article 2 
For the purposes of this Regulation: 
a) "denied boarding" means a refusal for passengers to be accommodated 
on a flight although they have: 
- a val id t icket, 
- a confirmed reservation on that flight, and 
- presented themselves within the required time-Mm it for 
check-In. 
b) "confirmed reservation" means that a ticket sold by the air carrier 
or its authorised travel agent contains 
a specification of the number, date and time of the 
fIight, and 
the notation of "OK" In the appropriate space on the ticket 
signifying the registration by the air carrier as well as the 
express acknowledgement of the air carrier of the reservation; 
c) "scheduled flight" means a flight possessing all of the following 
character 1st les: 
it is performed by aircraft for the transport of passengers or 
passengers and cargo and/or mail for remuneration, In such a 
manner that seats are available for purchase by members of the 
public, either directly from the carrier or from Its authorised 
agents and 
It is operated so as to serve traffic between two or more 
points, either: 
(1) according to a published timetable, or 
(2) with flights so regular or frequent that they constitute a 
recognlsably systematic series. 
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d) "overbooked flight" means a flight where the number of passengers 
holding a confirmed reservation and presenting themselves within 
the required time-limit before departure time of the flight exceeds 
the number of available seats on that flight; a flight cancelled 
for commercial reasons shall be considered as an overbooked flight; 
e) "volunteer" means a person who has: 
- a val id ticket, 
- a confirmed reservation and 
presented himself within the required time limit for check-In 
and who responds positively to the air carrier's call for 
passengers being prepared to surrender their confirmed 
reservation in exchange for the carrier's offer of 
compensât Ion; 
f) "compensation" means a valuable return In the form of money, a 
travel voucher and/or other services in favour of passengers 
holding a confirmed reservation for a scheduled flight and being 
voluntarily or involuntarily denied from boarding an overbooked 
flight; 
g) "non-fully flexible ticket" means any ticket to which conditions 
are attached which limit the flights and/or air carriers on which 
travel is permitted and which limits the passengers' rights to 
cancel or vary the reservations with or without consequential 
financial penalties published by the air carrier as a standard 
condition of purchase; 
h) "fully flexible ticket" means any ticket which allows travel at any 
time and concellation and/or variation of bookings and reservations 
at any time within a 12 month period from date of purchase and 
refund without financial penalty of the price paid for any unused 
element of carriage; 
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I) "final destination" means the destination on the flight coupon 
presented at the check-in counter or, in the case of subsequent 
flights, on the last flight coupon of the ticket. Connecting 
flights which can be carried out without difficulties although a 
delay has been caused by denied boarding are not taken into 
account. 
j) "intra-Community flight" means a scheduled flight between airports 
located within the European Community; 
k) "extra-Community flight" means a scheduled flight departing from an 
airport located In a Member State and arriving at an airport In a 
third country; 
Article 3 
1. In the event of an overbooked flight air carriers shall in the 
first Instance call for volunteers who are prepared to surrender 
their confirmed reservation In exchange for a confirmed reservation 
on an alternative flight to the final destination and refunds 
according to Article 4. Nevertheless the airline may, before the 
call for volunteers, refuse boarding for the passenger mentioned In 
paragraph (3)(a). 
2. In the event of an overbooked class air carriers may request 
passengers holding first class or business class tickets to accept 
to be placed in a lower class. If they accept the air carrier shall 
be obliged to pay a refund at least amounting to the difference 
between the ticket value of the class originally booked and the 
ticket value of the class actually used. If they do not accept the 
provisions of paragraphs 3 and 4 shall apply. 
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3. If the number of passengers who have not followed the carrier's 
call for volunteers still exceeds the number of total available 
seats on an overbooked flight, the air carrier may deny boarding to 
passengers but only provided It Is not possible to offer them empty 
seats in another class, in accordance with the following criteria : 
a) Passengers such as airline or travel industry related employees 
travelling for private reasons on their own account on a 
reduced fare basis which is not available to the public and who 
have not been requested to step down before the call for 
volunteers shall be denied boarding first; 
b) Boarding priority shall be given to passengers travelling on a 
non-fully flexible ticket provided: 
they hold a valid ticket and a confirmed reservation for 
the flight in question, 
they have presented themselves within the required time-
limit for check-In and 
the air carrier Is unable to offer an alternative flight on 
the same or another routing to the final destination which 
Is scheduled to arrive less than two hours later at the 
final destination. 
4. Notwithstanding the criteria laid down in paragraph 3, air carriers 
should give due consideration to the interests of: 
passengers who have demonstrated the need to travel due to 
death or illness of a family member, 
aged or handicapped passengers and unaccompanied children, 
when allocating seats on an overbooked flight; 
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Article 4 
1. The air carrier shall be obliged to pay to passengers holding a 
confirmed reservation and having presented themselves within the 
required time-limits for check-In, who were prevented from boarding 
an overbooked flight and who have received and accepted a confirmed 
reservation for an alternative flight: 
minimum compensation of 25% of the value of the lowest fully 
flexible ticket to their final destination In cases in which 
the alternative flight is scheduled to arrive at the final 
destination at least 30 minutes later than the original flight 
but less than two hours later on an intra-Community flight or 
less than four hours later on an extra-Community flight. 
minimum compensation of 50% of the value of the lowest fully 
flexible ticket to their final destination in cases in which 
the alternative flight is scheduled to arrive at the final 
destination at least two hours later on an intra-Communlty 
flight or four hours later on an extra-Community flight. 
The payment of denied boarding compensation shall not affect the 
passenger's right to use his ticket on another flight to the 
original point of destination or to seek a complete refund of the 
ticket value If he does not want to accept the alternative flight. 
2. The air carrier shall be obliged to pay compensation of 100 % of 
the value of the lowest fully flexible ticket to his final 
destination in cases where the passenger loses his right for a 
flight to his final destination because of denied boarding and the 
air carrier Is unable to offer an alternative flight. 
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Article 5 
In the case of the organization of a package tour by a tour operator, 
the air carrier shall be obliged to compensate the tour operator with 
the amount which would have to be paid by the latter in favour of 
passengers as compensation for failing to provide services and for 
which the tour operator is liable on the basis of Directive .../... 
(package travel). 
Article 6 
1. Apart from the minimum compensât ion amounts as set out in Article 4 
the air carrier shall offer free of charge to passengers who are 
denied boarding: 
a) In the event that any luggage has been sent on the original 
flight, at the choice of the passenger, col lect ion and safe 
keeping at the point of destination or its return; 
b) the expenses for a telephone call and/or telex/telefax message 
to the point of destination; 
c) meals and refreshments in a reasonable relation to the waiting 
time; 
d) hotel accommodation in cases where an additional overnight stay 
is necessary. 
2. When a town, city or region is served by several airports, and an 
air carrier offers a passenger who has been denied boarding, a 
flight to an alternative airport to the destination airport that 
the passenger had booked, the passenger should be offered full 
compensation to cover the cost of travelling between the 
alternative airports or to an alternative close-by destination, 
whichever is the most convenient to the passenger. 
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Article 7 
1. The carrier shall not be obliged to pay denied boarding 
compensation If the passenger fails 
a) to comply with the air carrier's conditions of carriage; 
b) to comply with the air carrier's or the airport's ticketing and 
check-in requirements; 
c) to undergo a security check or other usual departure 
formal It les. 
2. The air carrier shall not be obliged to pay denied boarding 
compensation in cases where 
a) the passenger is travelling free or at a discount fare which Is 
neither directly nor Indirectly available to the general 
pub lie; 
b) the passenger explicitly maintains his right to seek 
compensation of the damage in reliance on the laws relating to 
damage compensation established in the Member State concerned. 
Article 8 
Member States shall ensure that in their territories there is 
available, whether provided by public or private bodies, a rapid, 
efficient and inexpensive procedure for use by the consumer In dealing 
with his complaints concerning his rights In the case of denied 
boarding, where these are not resolved amicably. They shall inform the 
Commission of these procedural rules. 
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Article 9 
Air carriers shall, at the request of passengers affected by denied 
boarding, inform them of the responsible bodies to which complaints 
against the non-observance of this Regulation have to be addressed in 
the Member State where the ticket has been purchased. They shall 
provide each passenger affected by denied boarding with a claim form 
setting out the denied boarding compensation rules. 
Article 10 
This Regulation shall enter into force on 1 December 1990, 
This Regulation shall be binding in its entirety and directly 
applicable in all Member States. 
Done at Brussels, For the Council 
ISSN 0254-1475 
COM(90) 99 final 
DOCUMENTS 
EN 07 
Catalogue number : CB-CO-90-154-EN-C 
ISBN 92-77-59387-3 
Office for Official Publications of the European Communities 
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