Provisional text

OPINION OF ADVOCATE GENERAL

TANCHEV

delivered on 6 June 2018( )

Case C‑186/17

flightright GmbH

v

Iberia Express SA

(Request for a preliminary ruling from the Landgericht Berlin (Regional Court, Berlin, Germany))

(Request for a preliminary ruling — Air transport — Regulation (EC) No 261/2004 — Articles 5(1)(c) and 7 — Passenger compensation in the event of cancellation or long delay of flights — Missed connection on a multi-leg journey — Short delay on first leg but long delay at final destination — Responsibility for compensation when contractual air carrier does not operate any flights of journey and each leg is performed by different operating air carriers)





I. Introduction

1. Is the carrier of the first flight in a chain of flights responsible for paying compensation to a passenger under Article 7 of Regulation (EC) No 261/2004 ( ) when that first flight is subject to only a short delay, but a long delay ensues with respect to the passenger’s final destination?

2. That is in essence the question arising for the Court’s consideration by way of reference for a preliminary ruling from the Landgericht Berlin (Regional Court, Berlin, Germany).

3. The Court previously considered a matter of this kind in its judgment in Folkerts, ( ) but in a context in which the connecting flights were run by the same operating air carrier, and in which what was at issue was whether a passenger’s right to compensation under Article 7 of Regulation No 261/2004 was dependent on the conditions laid down in Article 6 of that regulation being met. ( )

4. However, there are significant factual differences between Folkerts and the main proceedings. What arises here is not so much whether compensation should be paid, but by whom.

5. In the main proceedings, different air carriers operated each leg of the connecting flights on an individual journey, but another air carrier, which operated no part of the journey, was designated at booking as the service provider. Thus, in the main proceedings, and unlike the scenario arising in Folkerts, there is no contractual agreement between any of the operating air carriers and the passengers who suffered delay, and the operating air carrier responsible for the short delay in the first flight was not involved in the operation of subsequent legs of the journey.

6. The Court is therefore called on to develop its established case-law on the interpretation of Regulation No 261/2004 in this factual context.

II. Legal framework

7. Recitals 1, 2, 4, 7 and 8 of Regulation No 261/2004 state:

‘(1) Action by the Community in the field of air transport should aim, among other things, at ensuring a high level of protection for passengers. Moreover, full account should be taken of the requirements of consumer protection in general.

(2) Denied boarding and cancellation or long delay of flights cause serious trouble and inconvenience to passengers.

…

(4) The Community should therefore raise the standards of protection set by [Council Regulation (EEC) No 295/91 of 4 February 1991 establishing common rules for a denied boarding compensation system in scheduled air transport ( )] both to strengthen the rights of passengers and to ensure that air carriers operate under harmonised conditions in a liberalised market.

…

(7) In order to ensure the effective application of this Regulation, the obligations that it creates should rest with the operating air carrier who performs or intends to perform a flight, whether with owned aircraft, under dry or wet lease, or on any other basis.

(8) This Regulation should not restrict the rights of the operating air carrier to seek compensation from any person, including third parties, in accordance with the law applicable.’

8. Article 2 of Regulation No 261/2004 sets forth the following definitions:

‘…

(b) “operating air carrier” means an air carrier that performs or intends to perform a flight under a contract with a passenger or on behalf of another person, legal or natural, having a contract with that passenger;

…

(h) “final destination” means the destination on the ticket presented at the check-in counter or, in the case of directly connecting flights, the destination of the last flight; alternative connecting flights available shall not be taken into account if the original planned arrival time is respected;

…’

9. Article 3(5) of Regulation No 261/2004 states:

‘This Regulation shall apply to any operating air carrier providing transport to passengers covered by paragraphs 1 and 2. Where an operating air carrier which has no contract with the passenger performs obligations under this Regulation, it shall be regarded as doing so on behalf of the person having a contract with that passenger.’

10. Article 5(1)(c) of Regulation No 261/2004 states:

‘In case of cancellation of a flight, the passengers concerned shall … have the right to compensation by the operating air carrier in accordance with Article 7 …’

11. Article 7 of Regulation No 261/2004 is entitled ‘Right to compensation’ and provides in paragraph 1:

‘Where reference is made to this Article, passengers shall receive compensation amounting to:

(a) EUR 250 for all flights of 1 500 kilometres or less;

(b) EUR 400 for all intra-Community flights of more than 1 500 kilometres, and for all other flights between 1 500 and 3 500 kilometres;

(c) EUR 600 for all flights not falling under (a) or (b).

In determining the distance, the basis shall be the last destination at which the denial of boarding or cancellation will delay the passenger’s arrival after the scheduled time.’

12. Article 13 of Regulation No 261/2004 is entitled ‘Right of redress’ and states:

‘In cases where an operating air carrier pays compensation or meets the other obligations incumbent on it under this Regulation, no provision of this Regulation may be interpreted as restricting its right to seek compensation from any person, including third parties, in accordance with the law applicable. In particular, this Regulation shall in no way restrict the operating air carrier’s right to seek reimbursement from a tour operator or another person with whom the operating air carrier has a contract. Similarly, no provision of this Regulation may be interpreted as restricting the right of a tour operator or a third party, other than a passenger, with whom an operating air carrier has a contract, to seek reimbursement or compensation from the operating air carrier in accordance with applicable relevant laws.’

III. The facts in the main proceedings and the question referred for a preliminary ruling

13. In the main proceedings, flightright GmbH (‘flightright’) brought a case against the Spanish air carrier Iberia Express SA (‘Iberia Express’), seeking compensation under Article 7 of Regulation No 261/2004. The order for reference indicates that flightright is pursuing this claim on behalf of two passengers who assigned to it their rights to compensation under that regulation in the amount of EUR 600 each.

14. According to the order for reference, the passengers booked a three-leg journey for two persons from Berlin, Germany, to San Salvador, El Salvador, through Elumbus GmbH (‘Elumbus’), a travel booking website. Elumbus is an authorised booking agent for the air carrier Air Berlin PLC & Co Luftverkehrs KG (‘Air Berlin’).

15. Air Berlin was named as the service provider of the journey on the invoice issued by Elumbus. The ticket document was issued by Elumbus and listed the same booking reference for Air Berlin, Iberia Lineas Aereas De Espana SA (‘Iberia’) and Avianca SA (‘Avianca’), the latter being two of the three operational air carriers of the journey.

16. The first leg of the journey was from Berlin, Germany, to Madrid, Spain. It was operated by Iberia Express.

17. The second leg of the journey was from Madrid, Spain, to San Jose, Costa Rica. It was operated by Iberia. Iberia Express is a wholly-owned subsidiary of Iberia.

18. The third leg of the journey was from San Jose, Costa Rica, to San Salvador, El Salvador. It was operated by Avianca, a Columbian air carrier with a code sharing arrangement with Iberia. ( )

19. The first flight arrived in Madrid with a delay of 59 minutes. As a result, the passengers missed their connecting flight. The passengers eventually arrived at their final destination, San Salvador, with a 49‑hour delay ( ) after the flights were rebooked.

20. The Amtsgericht Wedding (Local Court, Wedding, Germany) dismissed flightright’s claim on the ground that Iberia Express only operated the flight from Berlin to Madrid, but not the other flights. Further, Iberia Express was not involved in the booking and planning of the entire journey. Therefore, the Amtsgericht Wedding (Local Court, Wedding) held that Iberia Express was responsible only for the delay on the flight from Berlin to Madrid. It accepted Iberia Express’ argument to the effect that on this leg, which amounted to more than 1 500 km, there was a delay of only 59 minutes and therefore no right to compensation under Article 7 of Regulation No 261/2004.

21. Flightright appealed that judgment to the Landgericht Berlin (Regional Court, Berlin).

22. The referring court queries whether the Court’s judgment in Folkerts ( ) is applicable in the main proceedings where the initial delayed flight and the missed connecting flight are operated by different air carriers. ( )

23. It was in these circumstances that the Landgericht Berlin (Regional Court, Berlin) decided to stay the main proceedings and refer the following question to the Court for a preliminary ruling:

‘Can a right to compensation under Article 7 of Regulation No 261/2004 also exist in the case where a passenger does not catch a directly connecting flight after a relatively minor delay in arrival, with the result that there is a delay in arrival at the final destination of three hours or more, but the two flights were operated by different air carriers and the booking was made through a tour operator who carried out the booking of the entire flight journey via another air carrier?’

24. Written observations were submitted to the Court by the German, Italian and Polish Governments and the Commission. Flightright, Iberia Express, the German Government, and the Commission presented oral arguments at the hearing that was held on 21 March 2018.

IV. Assessment

A. Overview of the problem

25. It is apparent that Regulation No 261/2004 was not designed with the specific practice in mind that is in issue in the main proceedings. That is, air carrier A issues a ticket under contract for a multi-leg journey (‘the contractual air carrier’), then operates none of the legs of the journey itself, but rather assigns the various legs to different operating air carriers B, C, and D. These arrangements commonly take place under a practice known as code sharing. ( )

26. In conformity with the definition provided in Article 2(b) of Regulation No 261/2004, each of B, C, and D is an ‘operating air carrier’ for the purposes of Regulation No 261/2004, and it is on this notion that responsibility under Regulation No 261/2004 rests.

27. All of the obligations contained in Regulation No 261/2004 are imposed not on the contractual air carrier, but rather on the ‘operating air carrier’. Indeed, as pointed out by the Commission at the hearing, pursuant to Article 5 of Regulation No 261/2004, the absence of a contractual link between the passengers concerned and the operating air carrier is irrelevant, provided, as is the case in the main proceedings, that the operating air carrier has its own contractual relationship with the contractual air carrier.

28. This can be problematic for three reasons.

29. First, the case-law of the Court has imposed thresholds at which compensation for delay is triggered, and these are set at a minimum of three hours after the scheduled time of arrival.( ) As noted by the referring court, on the facts of the main proceedings, this threshold is not met if the leg for which Iberia Express was responsible is considered in isolation, given that the delay of this leg was only 59 minutes.

30. This feeds into the second problem. On the facts of the main proceedings, in which a contractual air carrier has issued a ticket for a journey of three legs, is the ‘flight’ which is to be assessed for delay made up of three separate flights or only one? In the main proceedings, it is only in the latter case that the threshold set in the Court’s case-law has been met, given that the delay at the final place of destination was 49 hours.

31. Third, if the ‘flight’ is made up of the full journey from Berlin to San Salvador, how can Iberia Express be held responsible to pay compensation under Regulation No 261/2004 for a delay of 49 hours, when it was the operating air carrier for a minor part of the journey? Equally, how could Air Berlin as the contractual air carrier be held responsible, when no obligations are imposed by Regulation No 261/2004 on contractual air carriers, but rather, as already mentioned, they are imposed on operating air carriers?

32. These are the issues that require assessment in order to answer the question referred by the Landgericht Berlin (Regional Court, Berlin).

B. Overview of the parties’ observations

33. Flightright and the Commission propose that the question referred be responded to in the affirmative. In their view, the ruling in Folkerts is transposable to the facts arising in the main proceedings because the identity of the operating air carriers is irrelevant.

34. The German Government takes the contrary position, contending that compensation was payable in Folkerts only because all legs of the journey were operated by the same carrier. This, for the German Government, is the necessary nexus. The German Government also expresses concern that air carriers with a focus on regional feeder legs might be overburdened if compensation claims could be based upon subsequent long delays at the final destination of a multi-leg journey.

35. According to the Polish Government, a right to compensation exists if either the travel operator acted as an authorised agent on behalf of the air carriers or if the air carriers, being aware of the full flight plan of the passengers concerned, confirmed their willingness to perform part of it, while the Italian Government takes the view that Air Berlin, as the contractual carrier, is liable for the compensation envisaged by Articles 5(1)(c) and 7 of Regulation No 261/2004.

V. Proposed answer to the question referred

36. I have reached the conclusion that the question referred should be answered to the effect that a right to compensation exists under Article 7 of Regulation No 261/2004 against an ‘operating air carrier’ when a passenger fails to catch a directly connecting flight as a result of a relatively minor delay in arrival of the preceding flight, with the result that there is a delay in arrival at the final destination of three hours or more, even when the flights concerned are operated by different air carriers and the booking was made through a tour operator who carried out the booking of the entire flight journey via another (contractual) air carrier which did not operate flights on any part of the journey.

37. I note at the outset that, pursuant to recital 1 of Regulation No 261/2004, action in the field of air transport aims at ensuring a high level of protection for passengers and full account is to be taken of the requirements of consumer protection in general. Further, under the established case-law of the Court, the provisions of Regulation No 261/2004 conferring rights on air passengers, including those conferring a right to compensation, are to be interpreted broadly. ( ) The objective of Regulation No 261/2004 is to strengthen protection for air passengers, ( ) and what is to be compensated under Article 7 of Regulation No 261/2004 is the ‘inconvenience linked to an irreversible loss of time’. ( )

38. I therefore take the view that, in light of its purpose, Regulation No 261/2004 cannot be read as impeding the availability of compensation to passengers who have clearly suffered significant delays which are sourced in business models that impose a distance in the legal relations between passengers and operating air carriers.

39. The Court has held that the reference in Regulation No 261/2004 to different types of delay is compatible with Article 19 of the Convention for the Unification of Certain Rules for International Carriage by Air (‘the Montreal Convention’), that convention being an integral part of the EU legal order. Article 19 of the Montreal Convention refers to the concept of ‘delay in the carriage by air of passengers’, without specifying at which stage of such carriage the delay in question must occur. ( )

40. Thus, it was established in Folkerts that since inconvenience materialises only at the final destination, when a single operating air carrier operates a series of connecting flights, and there is both a long delay at the place of final destination and a shorter one en route, it was only ‘the delay beyond the scheduled time of arrival at the final destination, understood as the destination of the last flight taken by the passenger concerned, which is relevant for the purposes of the fixed compensation under Article 7 of Regulation No 261/2004’. ( )The Court held more recently that the right to compensation arises without distinction as to whether passengers ‘reach their final destination by means of a direct flight or an air journey with connecting flights’. ( ) In consequence, the relevant delay in the main proceedings is the 49‑hour delay in arrival in San Salvador.

41. This conclusion is in conformity with the principle of equal treatment. A multi-leg journey operated by a single air carrier is comparable to one operated by different air carriers under an arrangement such as that in issue in the main proceedings, ( ) and there would appear to be no objective justification for a difference in treatment, particularly in the light of the objective pursued by Regulation No 261/2004. It also acts as a deterrent against air carriers splitting flights, for example among subsidiaries, in order to evade liability for compensation in the event of long delay.

42. It would seem from the case file that the only relevant difference between the facts arising in Folkerts and those arising in the main proceedings is that the operating air carrier and the contractual air carrier in Folkerts were one and the same, and all of the flights in Folkerts were operated by this same entity. In the main proceedings, Air Berlin is the contractual air carrier, but all relevant legs have been sub-contracted to operating air carriers.

43. Why then, cannot the fixed compensation regime imposed by Articles 5 and 7 of Regulation No 261/2004 be imposed on Air Berlin rather than Iberia Express, as was argued by the Italian Government?

44. The answer lies in the fact that Regulation No 261/2004 simply does not regulate the activities of contractual air carriers. This is not merely grounded in the wording of Regulation No 261/2004, but also tied to the fact that that regulation is directed throughout to the ‘operating air carrier’, as indicated by recitals 7, 8, 14 and 19 and Articles 4, 5 and 6 (while Article 7 is limited expressly to operating air carriers by the text of Articles 5, 10, 11 and 13). These provisions far outnumber and outweigh the generalised reference to ‘air carriers’ appearing in recitals 4, 9, 12 and 22 and Article 3 of Regulation No 261/2004, along with the definition of ‘air carrier’ in Article 2(a) of Regulation No 261/2004. Recital 7 of Regulation No 261/2004 is of particular importance, given that it emphasises that the obligations under the regulation ‘should rest with the operating air carrier who performs or intends to perform a flight’.

45. Thus, I am inclined to read the right to compensation in Article 7 of Regulation No 261/2004, which applies to the ‘operating air carrier’ by virtue of Article 5(1)(c) of that regulation, as including operating air carriers that have delayed a multi-leg flight, resulting in a delay at the final destination that falls within the thresholds for compensation as set in the Court’s case-law.

46. This is further supported by the travaux préparatoires of Regulation No 261/2004. While the original proposal of the Commission had addressed both the tour operator and the contractual air carrier in the case of code sharing, and the European Parliament had suggested parallel responsibility of both, the Council raised concerns with respect to what this meant in terms of legal certainty for passengers. ( ) For the purpose of clarity and simplicity, the draft regulation was amended to impose obligations exclusively on the operating air carrier. ( ) Further, whereas a provision in the original proposal had required the contractual air carrier to be a Community air carrier in the case of code sharing, ( ) that provision was subsequently modified in order to make the operating air carrier the point of reference. ( ) All this shows that the operating air carrier was deliberately made the relevant carrier under Regulation No 261/2004. ( )

47. Finally, it was mentioned by the representative of Iberia Express at the hearing that Iberia Express knew that the passengers concerned whom they flew from Berlin were to catch a connecting flight in Madrid. Given the prevalence of the practice of code sharing, it would not seem to impose too great a burden on air carriers which are gaining commercially from this practice to bear the risk involved, ( )especially when the consequences of a given flight being delayed can be foreseen by the air carrier by checking the flight plan of its passengers. Or put another way, as was argued by the Polish Government, knowledge of the existence of connecting flights amounts to a form of consent.

48. As pointed out by the Commission at the hearing, air carriers in the position of Iberia Express are free to refuse to contract with contractual air carriers if the layover time between flights falls outside of the margin of reasonable risk. In this light, I endorse the view that ‘the criterion for compensation should not be causation, but fault (broadly defined) on the part of the operator’. ( )

49. The answer that I am proposing therefore does not impose a disproportionate burden on the operating air carriers responsible for only short segments of flights. ( )Moreover, the discharge of obligations pursuant to Regulation No 261/2004 is without prejudice to an air carrier’s rights to seek compensation from any person, including third parties, in accordance with national law, as Article 13 of Regulation No 261/2004 provides. Precedence must, however, be given to the objective of Regulation No 261/2004, which is to ensure that passengers receive their compensation in an immediate and standardised manner. ( )

VI. Conclusion

50. In the light of the foregoing considerations, I am of the opinion that the Court should answer the question referred by the Landgericht Berlin (Regional Court, Berlin, Germany) as follows:

A right to compensation exists under Article 7 of Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91 against an ‘operating air carrier’ when a passenger fails to catch a directly connecting flight as a result of a relatively minor delay in arrival of the preceding flight, with the result that there is a delay in arrival at the final destination of three hours or more, even when the flights concerned are operated by different air carriers and the booking was made through a tour operator who carried out the booking of the entire flight journey via another (contractual) air carrier which did not operate flights on any part of the journey.