Opinion of the Economic and Social Committee on the 'Proposal for a Council Regulation (EC) amending Regulation (EEC) No 295/91 establishing common rules for a denied-boarding compensation system in scheduled air transport'
Date: 1998-07-01
Institutions: European Economic and Social Committee
Subjects: air transport, carriage of passengers, common transport policy, indemnification, trade agreement

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Official Journal of the European Communities

14.9.98

Opinion of the Economic and Social Committee on the ‘Proposal for a Council Regulation (EC)
amending Regulation (EEC) No 295/91 establishing common rules for a denied-boarding
compensation system in scheduled air transport’

(98/C 284/05)

On 16 February 1998 the Council decided to consult the Economic and Social Committee, under
Article 84(2) of the Treaty establishing the European Community, on the above-mentioned
proposal.

The Section for Transport and Communications, which was responsible for preparing the
Committee’s work on the subject, adopted its opinion on 10 June 1998. The rapporteur was
Mr Moreland.

At its 356th plenary session (meeting of 1 July 1998) the Economic and Social Committee
adopted the following opinion by 139 votes for, five votes against and four abstentions.

1.

Introduction

1.1.
The Commission proposes to amend Regulation
(EEC) No 295/91, which lays down rules for the payment
of compensation in the event of a passenger being denied
boarding by an airline because of overbooking. The cur-
rent Regulation was adopted in 1991. It was widely wel-
comed when first introduced, especially by user groups
and others, although many airlines argued that it was
unnecessary given the voluntary schemes already in exis-
tence. Since its introduction certain problems have emer-
ged in the Regulation’s application, and there have been
calls for improvements to the compensation scheme.

f)

require that the embarkation and denied boarding
rules become part of the air carrier’s conditions of
carriage;

g) ensure that carriers use the full capacity available
on the aircraft before denying boarding (with no
supplementary payment in case of upgrading and
with reimbursement in case of downgrading); also
strengthen the emphasis on calling for volunteers;

h) redefine an ‘overbooked flight’ to include those cases
where the aircraft intended for the flight has been
replaced by another aircraft of lesser capacity;

The changes proposed by the Commission are as

1.2.
follows:

i) make clear that, in case of reimbursement, the pas-
senger will be reimbursed for the cost of the ticket for
parts of the journey not made;

a) abolish the distinction between scheduled and non-
scheduled flights, so that compensation must be paid
to passengers travelling on a seat-only charter who
are not entitled to compensation under Directive
90/314/EEC on package travel;

b) define ‘check-in’ time as 30 minutes before the
announced departure time, unless the passenger is
otherwise informed in writing;

j)

increase the compensation levels established in 1991
to account for inflation:

— from ECU 150 to ECU 185 for flights of up to

3 500 km;

— from ECU 300 to ECU 370 for flights of more

than 3 500 km;

c) require that the ‘legal entity’ responsible for passen-
ger check-in displays notices at check-in counters;

k) make clear that reconfirmation of the booking may
not be requested by the carrier as a condition to
obtain DBC;

d) include electronic ticketing in the definition of a

ticket;

e) strengthens rules laying down the priorities for pas-
senger embarkation in addition to the existing
requirement to establish rules to be followed in the
event of an overbooked flight;

l)

specify that the carrier denying boarding (i.e. the
actual operator in the case of code share arrange-
ments) must pay the DBC to the passenger;

m) create an advisory Committee of representatives of

States;

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n) require that States compile a summary report of all
cases of denied boarding that occur at airports in
their territory.

2. General Comments

The Committee welcomes the initiative by the
2.1.
Commission to revise this Regulation and the fact that
the Commission has accepted certain improvements pro-
posed by the Committee in its Opinion on the initial
Denied Boarding Compensation (DBC) Regulation. On
the whole the revisions are improvements, although we
do have comments and suggested changes to some of
the detailed proposals. The Committee notes that the
airlines feel that adequate consultation has not taken
place in preparing the new Regulation. The Committee
emphasises the need for consultation with interested par-
ties on the practical implementation of the Regulation,
and hopes that the Commission will meet with such
parties as a matter of urgency.

3.1.3.
Further, the Committee is not confident that
advice about check-in times given to passengers by their
travel agents is always accurate. It would be most ben-
eficial if the check-in time could be shown on or with the
ticket in addition to the departure time. The Committee
recommends that
the Commission should consider
making this a requirement in a future revision of the
Regulation when sufficient time has been allowed for the
re-designing of ticket layouts.

3.1.4. R e c o m m e n d a t i o n

for

themselves

check-in at

Article 2(a) should be redrafted to say that passengers
should present
least
30 minutes before departure or more when told in
advance in writing to do so by the airline or its agent.
‘Presented for check-in’ should be defined as the time a
passenger joins a check-in line. The Commission should
consider making it a requirement in a future revision that
the check-in time should be shown on the ticket.

2.2.
The Committee regrets that compensation for
cancellations for commercial reasons are excluded and
urges the Commission to present proposals on this issue.

3.2. Article 2 (b)

3. Specific Comments

3.2.1.
A ‘ticket’ is defined as a document sold by an
air carrier or its authorised travel agent. No mention is
made of a tour operator which might sell a ticket to a
passenger, especially for travel only, but is not always
regarded as an agent of the airline.

3.1. Article 2 (a) (and Relevant Whereas Clauses)

3.2.2. R e c o m m e n d a t i o n

The Commission proposes that in order to
3.1.1.
avoid any disagreement about the minimum check-in
time, ‘denied boarding’ should be defined as a refusal to
accommodate a passenger on a flight despite the fact that
the passenger has a confirmed reservation on that flight
and has presented himself for check-in ‘as stipulated and
30 minutes before the announced departure time or,
where more time is prescribed, by the time indicated to
the passenger in advance in writing by the air carrier or
by its authorised travel agent’. The Committee welcomes
this proposal, but believes the text could be improved to
avoid misunderstanding and assist interpretation.

In particular, passengers should present them-
3.1.2.
selves for check-in at least 30 minutes before departure
or more when told in advance in writing to do so by the
airline or its agent. In addition, the Commission should
clarify in the Regulation that passengers are deemed to
have presented themselves for check-in on joining the
check-in line, and not on reaching the check-in counter.

The definition of ‘ticket’ should be extended to include
tickets sold by tour operators.

3.3. Article 3 (1)

3.3.1.
It is proposed that if a passenger agrees to be
placed in a class lower than that for which a ticket has
been purchased, he should be entitled to be reimbursed
the difference in price in addition to being paid denied
boarding compensation. The Committee supports this
proposal. However, it should be made clear that a pas-
senger travelling in a lower class should not be denied
boarding solely in order to carry a passenger booked into
a higher class.

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3.3.2. R e c o m m e n d a t i o n

A passenger booked into a lower class should not be
denied boarding solely in order to carry a passenger
booked into a higher class who would otherwise be
denied boarding.

3.4. Article 3 (2)

3.4.1.
Airlines are required to produce rules for the
payment of denied boarding compensation. These rules
and any changes to them must be notified to the relevant
Member State and to the Commission, which will then
make them available to all other Member States. Primar-
ily it should be the responsibility of a Member State to
ensure that each airline flying to/from its territory has
rules in place which are consistent with the Regulation.
The Commission should be informed by the Member
State that an airline has filed its denied boarding rules,
and given a copy of the rules if requested, but there is no
need for the rules to then be circulated to all other Mem-
ber States.

3.4.2. R e c o m m e n d a t i o n

Each airline should submit a copy of its denied board
compensation rules to the aeronautical authorities of
each Member State to/from which it operates. Each
Member State should inform the Commission that the
rules have been filed and forward copies to the Com-
mission.

3.5. Article 3 (3)

Airlines are required to make their DBC rules
3.5.1.
available to the public. In particular check-in desks must
have a clear sign informing passengers of the existence
of compensation in the event of denied boarding. The
Regulation prescribes the wording to be used and the
sizes of the notice and lettering.

3.5.2.
The Committee believes that full information
of the passengers rights should be displayed on check-in
counter. However check-in counters are often cluttered
with notices about — inter alia — safety, security and
hand baggage. Airlines should have the opportunity to
place displays elsewhere — provided passengers can be
ensured that this will not reduce the likelihood of being
made aware of their rights. Furthermore, the precise

wording proposed by the Commission may need to be
adapted depending on the location of the signs. This is
clearly an issue on which the Commission and Member
States should consult the airlines, airports and consumer
groups.

3.5.3. R e c o m m e n d a t i o n

The need to ensure that passengers are aware of their
legal rights is important, but the specific proposal by the
Commission may need to be adapted following consul-
tation.

3.6. Article 4 (2) and 4 (3)

The Commission proposes that the compen-
3.6.1.
sation levels established in 1991 should be increased from
ECU 150 to ECU 185 for flights of up to 3 500 kms and
from ECU 300 to ECU 370 for flights of more than
3 500 kms.

3.6.2.
Since 1991, inflation has increased by signifi-
cantly different amounts in individual Member States.
The amounts of compensation payable in the case of
denied boarding may be adjusted by the Commission
when necessary because of ‘economic trends’. It is not
obvious what ‘economic trends’ means. The Committee
would welcome a clear formula for future increases in
compensation levels. While the Committee does not
believe that there is a need to go through the full legisla-
tive process in making future changes, clearly consul-
tation with Member States and interested parties would
be beneficial.

3.6.3. R e c o m m e n d a t i o n

The Commission should propose a clear formula for
increasing DBC payments, together with a procedure for
consulting Member States and interested parties before
increases are adopted.

3.7. Article 4 (4)

3.7.1. Where a passenger denied boarding on the
flight of his choice is re-routed and arrives at his intended
destination within two hours of the scheduled arrival
time for flights of up to 3 500 km or four hours for longer
flights, compensation payments are reduced by 50 %.
The Committee supports this approach in principle.
However, it would seem more reasonable that the per-
mitted delays in reaching the intended destinations
should be limited to one hour rather than two for short
flights and two hours rather than four for longer flights.

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3.7.2. R e c o m m e n d a t i o n

Where a passenger denied boarding on the flight of his
choice is re-routed and arrives at his intended destination
within one hour of the scheduled arrival time for flights
up to 3 500 km: or two hours for longer flights, compen-
sation payments should be reduced by 50 %.

3.8. Article 4 (6)

3.8.1.
Compensation is required to be paid in cash or,
with the written agreement of the passenger, in travel
vouchers and/or other services. In certain circumstances
the need to obtain a passenger’s written agreement could
create problems and the Committee welcomes the clarifi-
cation by the Commission that the proposal does not go
beyond the current Regulation in requiring a written
receipt for compensation. Not all airlines will want or be
able to offer an alternative to cash payments; the option
should be available at the discretion of the airline con-
cerned.

3.8.2. R e c o m m e n d a t i o n

An airline should be allowed to offer travel vouchers
and/or other services as an alternative to cash payments,
but the passenger should not be required to accept such
an alternative.

3.9. Article 9 (b)

overbooking which occur at airports in their territories.
The Commission should, however, produce a report on
the effectiveness of the Regulation every three years,
based on its own research and enquiries made to Member
States.

3.10.2. R e c o m m e n d a t i o n

The Commission should report every three years on the
effectiveness of the Regulation, on the basis of reports
made by Member States.

4. Other Considerations

4.1. Explanatory Memorandum

4.1.1.
In its Explanatory Memorandum accompa-
nying the revised Regulation the Commission states that
there have been numerous cases where passengers have
not been informed of their right to compensation when
denied boarding. The Commission says that it will
launch an information campaign with the object of fam-
iliarising the public with its rights, along similar lines to
that already provided by the Citizen of Europe campaign.

4.1.2.
The Committee agrees that more publicity
should be given to the Regulation. The Commission
should ensure that the airlines, consumers and Member
States are involved as appropriate in publicising the
necessary information.

3.9.1. Member States are required to determine the
penalties applicable to infringements of the Regulation
and take all measures necessary to ensure that it is
implemented. This will inevitably mean that penalties
for the same offence will vary between Member States
and risk a lack of uniformity in the enforcement of the
Regulation.

4.1.3. R e c o m m e n d a t i o n

The Commission should consult Member States, the
airline industry and consumer groups about how the
rights available under the Regulation might best be
brought to the attention of the travelling public.

3.9.2. R e c o m m e n d a t i o n

4.2.

Impact Assessment Form

The Commission should evaluate the extent to which
enforcement varies between Member States and if
necessary bring forward further proposals designed to
ensure greater consistency.

3.10. Article 9 (c)

Each year Member States are required to pro-
3.10.1.
duce summary reports of denied boarding cases due to

It is regrettable that the Impact Assessment
4.2.1.
Form does not contain a real assessment of the costs
likely to be incurred by those parties who will have to
implement the Regulation. The Commission has had
ample time to calculate the costs involved and assess
whether they are justified by the likely benefits for con-
sumers. The Committee would welcome regular reviews
of the Regulation and in particular of the compensation
levels. The reviews should take into account the costs
incurred by those responsible for implementing the
Regulation as well as the benefits for consumers.

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4.2.2. R e c o m m e n d a t i o n

The Commission should carry out a full assessment of
the Regulation’s costs and benefits, in consultation with
interested parties, before the Regulation is reviewed
again. This assessment should include the costs of the
reporting and collating of the data required under the
Regulation. More frequent reviews might be appropriate
prior to changes in compensation levels.

5. Conclusion

for check-in’ should be defined as the time a passenger
joins a check-in line. The Commission should consider
making it a requirement in a future revision that the
check-in time should be shown on the ticket.

The definition of ‘ticket’ should be extended to

7.2.
include tickets sold by tour operators.

7.3.
A passenger booked into a lower class should not
be denied boarding solely in order to carry a passenger
booked into a higher class who would otherwise be
denied boarding.

The Committee agrees that, subject to the results
5.1.
of a full assessment of the costs and benefits involved,
there continues to be a need for a Regulation governing
the payment of denied boarding compensation in the
case of overbooking. The present Regulation has been
effective, but is in need of revision to deal with problems
which have arisen since it was first adopted.

Each airline should submit a copy of its denied
7.4.
board compensation rules to the aeronautical authorities
of each Member State to/from which it operates. Each
Member State should inform the Commission that the
rules have been filed and forward copies to the Com-
mission.

6. Further considerations

6.1.
The United States had denied boarding compen-
sation rules in place before the European Union. They
appear to have been effective, yet are significantly less
complex than those proposed by the Commission. It is
not obvious why this should be so. In the Committee’s
view it would be helpful if the Commission carried out a
comparative analysis of the US and proposed EU rules
to see whether the latter can be simplified. Particular
attention should be paid to the requirement in the US for
volunteers for denied boarding to be sought in the event
that not all booked passengers can be carried and to
whether such a requirement should be given more promi-
nence in the European rules.

7. Summary of recommendations

The need to ensure that passengers are aware of
7.5.
their legal rights is important, but the specific proposal
by the Commission may need to be adapted following
consultation.

7.6.
The Commission should propose a clear formula
for increasing DBC payments, together with a procedure
for consulting Member States and interested parties
before increases are adopted.

7.7. Where a passenger denied boarding on the flight
of his choice is re-routed and arrives at his intended
destination within one hour of the scheduled arrival time
for flights up to 3 500 km: or two hours for longer flights,
compensation payments should be reduced by 50 %.

An airline should be allowed to offer travel
7.8.
vouchers and/or other services as an alternative to cash
payments, but the passenger should not be required to
accept such an alternative.

7.1.
The Commission should make a proposal on
compensation for cancellations for commercial reasons.
Article 2(a) should be redrafted to say that passengers
should present themselves for check-in at least 30
minutes before departure or more when told in advance
in writing to do so by the airline or its agent. ‘Presented

7.9.
The Commission should evaluate the extent to
which enforcement varies between Member States and if
necessary bring forward further proposals designed to
ensure greater consistency.

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7.10.
The Commission is should report every three
years on the effectiveness of the Regulation, on the basis
of reports made by Member States.

7.11.
The Commission should consult Member
States, the airline industry and consumer groups about
how the rights available under the Regulation might best
be brought to the attention of the travelling public.

7.12.
The Commission should carry out a full assess-
ment of the Regulation’s costs and benefits, in consul-

tation with interested parties, before the Regulation is
reviewed again. This assessment should include the costs
of the reporting and collating of the data required under
the Regulation. More frequent reviews might be appro-
priate prior to changes in compensation levels.

The Commission should undertake a compara-
7.13.
tive analysis of EU and US denied compensation payment
rules to check whether there is scope for simplifying the
EU rules.

Brussels, 1 July 1998.

The President

of the Economic and Social Committee

Tom JENKINS

Opinion of the Economic and Social Committee on ‘Ways and means of strengthening the
networks for the provision of information on and exploitation of applied RTD programmes
in Europe’

(98/C 284/06)

On 29 January 1998 the Economic and Social Committee decided, under the third paragraph
of Rule 23 of its Rules of Procedure, to draw up an opinion on ‘Ways and means of
strengthening the networks for the provision of information on and exploitation of applied
RTD programmes in Europe’.

The Section for Energy, Nuclear Questions and Research, which was responsible for preparing
the Committee’s work on the subject, adopted its opinion unanimously on 17 June 1998. The
rapporteur was Mr Malosse.

At its 356th plenary session of 1 and 2 July 1998 (meeting of 1 July), the Economic and Social
Committee adopted the following opinion unanimously.

I. RECOMMENDATIONS

ments in order to be able to disseminate new technologies
tailored to European enterprises,

The Economic and Social Committee,

I.1.
the urgent need for a ‘structural’ strategy to
strengthen the competitiveness of European industry in
the interests of growth and employment,

I.2.
the vital role played here by back-up and infor-
mation networks in ensuring that enterprises, and
particularly SMEs with an unexploited innovative
capacity (‘vanguard’ enterprises), are able to participate
in research programmes,

the vital need to set up a mechanism for exploiting
I.3.
research findings and monitoring technological develop-

I.4.
the opportunity afforded to the 5th Framework
Programme on Research and Technological Develop-
ment (hereinafter 5th RTDFP) to help rise to this
challenge of competitiveness, thereby permitting a clear
break with previous programmes, as the European
Parliament, Council and Economic and Social Com-
mittee have advocated,

I.5.
the excessive dispersal of existing national and
Community networks which, in the view of the Com-
mittee, are unable to make an effective contribution to
any new strategy designed to break with the past,