COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal for a regulation of the European Parliament and of the Council amending Regulation (EC) No 261/2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delays of flights and Regulation (EC) No 2027/97 on air carrier liability in respect of the carriage of passengers and their baggage by air
Date: 2013-03-13
Institutions: European Commission
Subjects: airline, consumer protection, indemnification, personal effects, reservation, traveller

EUROPEAN 
COMMISSION 

Brussels, 13.3.2013  
SWD(2013) 62 final 

COMMISSION STAFF WORKING DOCUMENT 

IMPACT ASSESSMENT 

Accompanying the document 

Proposal for a regulation of the European Parliament and of the Council 

amending Regulation (EC) No 261/2004 establishing common rules on compensation 
and assistance to passengers in the event of denied boarding and of cancellation or long 
delays of flights and Regulation (EC) No 2027/97 on air carrier liability in respect of the 
carriage of passengers and their baggage by air  

{COM(2013) 130 final} 
{SWD(2013) 63 final} 

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COMMISSION STAFF WORKING DOCUMENT 

IMPACT ASSESSMENT 

Accompanying the document 

Proposal for a regulation of the European Parliament and of the Council 

amending Regulation (EC) No 261/2004 establishing common rules on 
compensation and assistance to passengers in the event of denied boarding and of 
cancellation or long delays of flights and Regulation (EC) No 2027/97 on air carrier 
liability in respect of the carriage of passengers and their baggage by air  

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TABLE OF CONTENTS 

1. 

2. 

2.1. 

2.2. 

Introduction .................................................................................................................. 6 

Procedural issues and consultation of interested parties .............................................. 6 

Organisation and timing ............................................................................................... 6 

Consultation and expertise ........................................................................................... 6 

2.2.1.  External expertise ......................................................................................................... 7 

2.2.2.  Consultation process..................................................................................................... 7 

2.2.3.  Consultation of the Impact Assessment Board............................................................. 8 

3. 

3.1. 

3.2. 

4. 

4.1. 

4.2. 

Context ......................................................................................................................... 9 

Description of the legal framework in place ................................................................ 9 

Developments since the entry into force of the Regulation ....................................... 10 

Problem definition...................................................................................................... 12 

Nature of the problem................................................................................................. 12 

Underlying drivers of the problem ............................................................................. 13 

4.2.1. 

Insufficiently effective and uniform enforcement across Europe .............................. 13 

4.2.1.1.  Difficulty in interpreting key aspects of the Regulation ............................................ 13 

4.2.1.2.  Inconsistent and insufficiently effective sanctioning policies.................................... 14 

4.2.1.3.  Complex complaint-handling processes and insufficient means of individual 

redress......................................................................................................................... 15 

4.2.2.  Certain costs of the obligations imposed by the Regulation constitute strong 

disincentives for compliance ...................................................................................... 16 

4.3.  Who is affected, in what ways and to what extent? ................................................... 20 

4.4. 

4.5. 

5. 

Likely evolution of the problem (baseline scenario).................................................. 21 

Should the EU act? ..................................................................................................... 23 

Objectives................................................................................................................... 24 

5.1. 

Policy objectives......................................................................................................... 24 

5.1.1.  General objectives ...................................................................................................... 24 

5.1.2.  Specific objectives...................................................................................................... 24 

5.1.3.  Operational objectives................................................................................................ 25 

5.2. 

5.3. 

6. 

6.1. 

6.2. 

6.3. 

Possible trade-offs between policy objectives............................................................ 26 

Consistency with other EU policies ........................................................................... 26 

Policy options ............................................................................................................. 27 

Possible types of EU intervention .............................................................................. 27 

Initial screening of the policy measures ..................................................................... 28 

Description of policy options ..................................................................................... 36 

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7. 

Analysis of impacts .................................................................................................... 42 

7.1. 

Economic impacts ...................................................................................................... 42 

7.1.1. 

Impact on enforcement ............................................................................................... 42 

7.1.2. 

Impact on compliance cost ......................................................................................... 46 

7.1.3. 

Impact on the functioning of the internal market and competition ............................ 51 

7.1.4. 

Impact on competitiveness of EU airlines.................................................................. 52 

7.1.5. 

Impact on administrative costs/burden....................................................................... 52 

7.1.6. 

Impact on public authorities ....................................................................................... 53 

7.1.7.  Overview of economic impacts.................................................................................. 54 

7.2. 

Social impacts............................................................................................................. 55 

7.2.1. 

Impact on passengers/consumers ............................................................................... 55 

7.2.2. 

Impacts on employment ............................................................................................. 59 

7.2.3. 

Impacts on fundamental rights ................................................................................... 60 

7.3. 

7.4. 

8. 

Environmental impacts............................................................................................... 60 

Comparing the options ............................................................................................... 61 

Monitoring and evaluation ......................................................................................... 63 

ANNEX 1: Public consultation: participation .......................................................................... 65 

ANNEX 2a: Basic data and estimates ...................................................................................... 67 

ANNEX 2b: Breakdown of delays by cause ............................................................................ 68 

ANNEX 3: Passenger surveys on airline compliance with air passenger rights ...................... 69 

ANNEX 4: Unclear rights under Regulation 261/2004 and other EU consumer law.............. 71 

ANNEX 5: Complaint handling by NEBs................................................................................ 74 

ANNEX 6: Competition with other modes and with non-EU carriers..................................... 77 

ANNEX 7: Relation between Regulation 261/2004 and other EU and international law ....... 79 

ANNEX 8a: Underlying assumptions of the baseline scenario................................................ 82 

ANNEX 8b: Underlying assumptions of cost calculations ...................................................... 84 

ANNEX 9: Cost estimates...................................................................................................... 101 

ANNEX 10: Preliminary screening of policy measures......................................................... 106 

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ANNEX 11: Preliminary screening of policy measures – detailed analysis of some 
measures ................................................................................................................................. 125 

ANNEX 12: Administrative cost and burden calculations..................................................... 138 

ANNEX 13: Summary presentation of the impact of measures and options on the 
compliance cost ...................................................................................................................... 140 

ANNEX 14: Sensitivity analysis of the calculations.............................................................. 151 

ANNEX 15: Underlying methodology for estimations.......................................................... 153 

ANNEX 16: Detailed table on comparison of options ........................................................... 158 

ANNEX 17: Comparison of passenger rights between transport modes ............................... 160 

ANNEX 18: glossary of terms and acronyms ........................................................................ 163 

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1. 

INTRODUCTION 

The liberalisation of the European air transport market has generated significant benefits 
for  consumers,  including  a  wider  choice  of  air  services  and  intense  price  competition 
between air carriers leading to lower air fares.  

In  order  to  limit  any  potential  negative  impacts  on  service  quality,  a  number  of 
accompanying  measures  have  been  taken  at  EU  level  to  protect  air  passengers.  In 
particular, Regulation 261/20041 (hereinafter "the Regulation") introduced new rules on 
compensation and assistance in the event of denied boarding, short-notice cancellation, 
long  delay  and  involuntary  downgrading.  Moreover,  Regulation  2027/972,  which 
translates  the  Montreal  Convention3  into  EU  law,  contains  provisions  with  regard  to 
compensation where baggage has been mishandled. 

2. 

PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES 

2.1. 

Organisation and timing 

The work on the impact assessment (IA) was started in April 2011. It was prepared by 
DG  Mobility  and  Transport  (MOVE)  with  the  contribution  of  an  Impact  Assessment 
Steering  Group  in  which  the  following  Directorates  General  have  participated:  the 
Secretariat  General,  DG  Health  and  Consumers,  DG  Justice,  DG  Competition,  DG 
Enterprise4. 

The group has met three times, on 27 April 2011, on 26 June 2012 and on 23 July 2012 
and was consulted by writing, on 22 November 2011, 26 July 2012 and 1 August 2012. 
DGs  were  invited  to  send  their  comments  on  the  final  draft  IA  report  until  1  August 
2012. 

This  proposal  is  part  of  the  Commission's  work  programme  for  2012  (ref. 
2012/MOVE/010).  It  involves  the  revision  of  the  above  mentioned  Regulations 
261/2004 and 2027/97. 

2.2. 

Consultation and expertise 

The constant monitoring by the Commission of the functioning of EU legislation on air 
passenger  rights  has  been  accompanied  by  several  external  studies/consultations  since 
2009, the results of which are available on the Commission website.5 

1 

2 

3 

4 
5 

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, JO L46/1 of 17-2-2004. 
Regulation (EC) No 2027/97 of the Council of 9 October 1997 on air carrier liability in respect 
of the carriage of passengers and their baggage by air (OJ L 285, 17.10.1997, p.1) as amended 
by Regulation (EC) No 889/2002 of the European Parliament and of the Council of 13 May 2002 
(OJ L 140, 30.5.2002, p.2) 
Convention for the Unification of Certain Rules for International Carriage by Air (the Montreal 
Convention), 
18.07.2001, 
L194 
http://europa.eu/legislation_summaries/transport/air_transport/l24255_en.htm 
The Legal Service, DG Enlargement and the EEAS were also invited, but did not participate. 
http://ec.europa.eu/transport/passengers/consultations/2010_03_01_apr_legislation_en.htm 
http://ec.europa.eu/transport/passengers/studies/passengers_en.htm 

OJ 

of 

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2.2.1.  External expertise 

An evaluation of the past application of the Regulation was carried out by the consultant 
Steer Davies Gleave and was finalised in February 20106. The purpose of the study was 
to assess whether the measures taken since the Commission's Communication in 20077 
have  been  successful  in  ensuring  that  passengers'  rights  are  adequately  protected,  or 
whether other measures needed to be taken (see section 3.2, page 10). 

In 2012, a further study was finalised by Steer Davies Gleave in support of the present 
IA8, studying the current market situation and problems and assessing quantitatively the 
impacts of numerous policy measures in view to address these problems. 

The  Impact  Assessment  Steering  group  prepared  the  terms  of  reference  for  the  study. 
Furthermore, the study was carried out in parallel with the Commission's work on its IA 
report,  thereby  directly  contributing  with  data  and  estimates  in  function  of  the 
Commission's needs for its own report. 

2.2.2.  Consultation process 

Participation 

In  the  context  of  the  present  IA,  a  public  consultation  was  carried  out  between  19 
December  2011  and  11  March  2012  which  focussed  on  questions  with  regard  to  a 
possible  revision  of  Regulation  261/2004.  410  submissions  to  the  consultation  were 
received (see annex 1 and the Commission's website9 for more detailed information on 
the consultation). 

Given the large number of issues covered, the Commission instructed its consultant to 
undertake  –  complementary  to  the  public  consultation  -  individual  interviews  and 
consultations  with  98  stakeholders  selected  in  order  to  cover  all  stakeholder  groups. 
These individual consultations allowed to deepen the issues with regard to the specific 
interests and know-how of the stakeholders concerned.  

Finally,  on  30  May  2012,  the  Commission  and  the  European  Economic  and  Social 
Committee  co-organised  a  conference  presenting  the  main  results  of  the  public 
consultation,  and  giving  stakeholders  the  opportunity  to  respond  to  these  results.  The 
representative  organisations  that  responded  to  the  public  consultation  were  invited  to 
this  conference.  The  presentations  and  the  minutes  of  the  conference  can  be  found  on 
the Commission's website10. 

It follows from the above that the Commission minimum standards for the consultation 
have been respected. 

Main points of view 

The consumer and passenger representatives mainly focused on poor compliance and 
inadequate enforcement, especially in the case of the rights to financial compensation in 

6 

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10 

Evaluation  of  Regulation  261/2004,  Steer  Davies  Gleave,  February  2010; 
http://ec.europa.eu/transport/passengers/studies/doc/2010_02_evaluation_of_regulation_261200
4.pdf 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2007:0168:FIN:EN:PDF 
Exploratory study on the application and possible revision of Regulation 261/2004, Steer Davies 
Gleave, July 2012 – to be published.  
http://ec.europa.eu/transport/passengers/consultations/2012-03-11-apr_en.htm 
http://ec.europa.eu/transport/passengers/events/2012-05-30-stakeholder-conference_en.htm 

see 

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case of delay; they stressed that complaint handling and enforcement are not effective 
and  that,  despite  the  provisions  within  the  Montreal  Convention,  passengers  are 
insufficiently  protected  when  baggage  is  mishandled.  The  European  Disability  Forum 
(EDF)  highlighted  some  specific  issues  with  regard  to  often  limited  compensation  for 
loss/damage  to  mobility  equipment  and  the  prioritisation  of  assistance  for  disabled 
passengers and passengers with reduced mobility in situations of mass disruption. 

Airlines  and  their  associations  mainly  considered  that  the  financial  cost  of  the 
Regulation  is  excessive,  particularly  that  airlines  face  unlimited  liability  for  incidents 
which  are  not  their  fault  (e.g.  volcanic  ash  cloud  crisis  in  April  2010).  The  airlines 
heavily  criticised  the  consequences  of  the  Sturgeon  judgement  –  i.e.  the  right  to 
financial compensation in case of long delay – on the grounds of alleged incompatibility 
with international law and excessive economic "burden". 

Although  in  the  majority  of  cases  airlines  and  passenger  representatives  expressed 
opposing  views,  there  were  some  areas  of  agreement  –  for  example,  the  need  for 
clarification  of  extraordinary  circumstances  (although  not  about  how  it  should  be 
clarified),  or  requiring  airlines  to  provide  more  information  to  passengers  regarding 
flight disruptions. 

The  views  of  the  travel  agent  and  tour  operator  associations  were  on  many  issues 
similar to those of the airlines, but with some notable exceptions such as in regard to the 
right  to  rerouting  or  to  the  use  of  individual  segments  of  a  flight  ticket  ("no  show" 
policy).  

The  views  of  airports  frequently  lay  somewhere  between  the  airline/travel  agent  and 
consumer/government  viewpoints.  Airports  and  travel  retailers  expressed  strong 
opinions with regard to specific issues of relevance to their own operations, but in the 
remainder  of  other  issues  usually  did  not  state  any  opinion.  Airports  expressed 
particularly strong opposition towards the options that they be given any responsibilities 
under  the  revised  Regulation,  or  that  airlines  be  explicitly  given  the  right  to  claim 
compliance costs from responsible third parties. 

The  national  and  sub-national  authorities  that  responded  to  the  public  consultation 
expressed views on most issues which were similar to those of the consumer/passenger 
associations, but they were more sensitive to economic, budgetary or legal constraints 
and  led  to  mixed  opinions  on  some  issues  such  as  the  scope  of  the  Regulation, 
compensation for delay, enforcement and complaint handling. Most of the government 
respondents also agreed that action was required, and in the interviews some said that 
the Regulation needed to be significantly revised to improve its operation. 

2.2.3.  Consultation of the Impact Assessment Board 

Following the submission of a draft IA report to the Impact Assessment Board (IAB) on 
2 August 2012, the IAB sent its favourable opinion on 21 September 2012. The Board's 
comments were fully taken into account in the final IA report: 

• 

The problem definition was strengthened by providing more detailed data and 
analysis on the reasons behind the insufficient application and enforcement of 
passenger  rights;  the  report  better  explains  the  relations  with  the  Montreal 
Convention  and  provides  more  precise  references  to  the  supporting  evidence 
and to the annexes. 

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• 

• 

• 

The range of options was broadened, mainly by adding an additional policy 
option  that  is  directly  inspired  from  the  EP's  report  mentioned  in  section  3.2 
(page  11).  Furthermore,  the  various  policy  measures  were  formulated  more 
precisely  and  stakeholders'  views  with  regard  to  various  policy  options  and 
measures were clearly presented. 

The calculation of costs and benefits was strengthened by a better explanation 
of the underlying assumptions and methodology and by clear references to the 
relevant  parts  of  the  annexes.  The  analysis  of  consumer  benefits  was  further 
developed. 

The section on future monitoring and evaluation was clarified by setting out 
the future evaluation arrangements and identifying relevant indicators. 

3. 

CONTEXT 

3.1. 

Description of the legal framework in place 

Regulation  261/2004  became  applicable  on  17  February  2005  and,  depending  on  the 
circumstances of the travel disruption, it requires air carriers to: 

•  provide passengers with assistance, such as meals, refreshments, telephone calls and 

hotel accommodation;  

•  offer re-routing and refunds;  

•  pay  a  flat-rate  compensation  of  up  to  €600  per  passenger,  depending  on  the  flight 

distance; and 

•  proactively inform passengers about their rights under the Regulation. 

Note that the airline is not obliged to pay the financial compensation if it can prove that 
the  cancellation  or  delay  was  caused  by  extraordinary  circumstances.  However,  the 
obligations  for  care  and  assistance  are  upheld  even  in  situations  of  extraordinary 
circumstances. The Regulation does not precisely define the concept of "extraordinary 
circumstances". 

The Regulation  is  applicable to flights operated  by  EU  and  non-EU carriers departing 
from  EU  airports  towards  any  airport  and  to  flights  operated  by  EU  carriers  and 
departing from a non-EU airport towards an EU airport. By application of air transport 
agreements  between  the  EU  and  some  third  countries  (e.g.  Iceland,  Norway  and 
Switzerland),  these  countries  are  considered  like  EU  countries  for  the  purpose  of  the 
application  of  the  Regulation.  As  modifications  of  the  geographical  scope  of  the 
Regulation  would  create  problems  of  extra-territoriality  and  hence  compatibility  with 
international  law,  there  were  not  further  developed  in  this  report  (such  measures  are 
mentioned in annex 10, page 109). 

The  Regulation  also  requires  Member  States  to  establish  national  enforcement  bodies 
(NEBs)  to  ensure  the  correct  application  of  the  Regulation  (via  the  introduction  of 
dissuasive sanctions into national law). 

The rights of passengers under the Regulation are not to be confused with their rights 
under the Montreal Convention. As confirmed by the European Court of Justice, the 
rights  in  Regulation  261/2004  are  of  a  different  nature  to  those  in  the  Montreal 
Convention: whereas the Montreal Convention is concerned with individualised damage 
to  travellers,  to  be  assessed  on  a  case-by-case  basis  depending  on  the  individual 

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circumstances of the passenger (and where the burden of proof lays on the passenger), 
Regulation  261/2004  set  up  standardised  entitlements  (with  regard  to  assistance  and 
care)  applicable  to  all  passengers,  regardless  of  their  individual  circumstances.  Also 
note that the Montreal Convention has no provisions with regard to denied boarding or 
cancellation. 

As  regards  mishandled  baggage,  under  the  Montreal  Convention  (and  Regulation 
2027/97),  a  passenger  may  be  entitled  to  compensation  in  case  of  lost,  damaged  or 
delayed  baggage  (but  with  a  limit  of  about  €1200).  However,  airlines   are  not  liable  if 
they have  taken all reasonable measures to avoid the damages or it was impossible to 
take such measures. Unlike Regulation 261/2004, Regulation 2027/97 and the Montreal 
Convention  do  not  impose  the  establishment  of  enforcement  bodies  to  ensure  their 
correct application. 

Air passengers' rights are further reinforced by more general EU law that is described in 
the  relevant  sections  of  this  report,  such  as  the  Package  Travel  Directive  90/314  (see 
section 5.3, p.26) and Directive 93/13 on unfair contract terms (see section 6.1, p.27 and 
annex 7, p.78). The Commission proposal on alternative dispute resolution (ADR) and 
its relevance in the present context is explained in section 4.4 (p.21). 

This IA report focusses on the protection of air passenger rights in case of disruption of 
their travel plans (implying a possible revision of Regulations 261/2004 and 2027/97). 

3.2. 

Developments since the entry into force of the Regulation 

In  April  2007,  the  Commission  issued  a  Communication  on  the  operation  of  the 
Regulation,  which  concluded  that  substantial  improvement  to  enforcement  and 
compliance was required11. It identified that further work was also required in a number 
of areas, including the clarification of key terms. 

The  study  by  Steer  Davies  Gleave  of  February  2010  and  mentioned  in  section  2.1.1 
above  has  shown  that  the  Commission  and  the  Member  States  have  made  significant 
progress  to  improve  the  application  of  the  Regulation  since  2007:  the  activity  of  the 
NEBs has significantly increased both in terms of complaint handling and sanctioning. 
However, there still remain problems with regard to the insufficient compliance of air 
carriers  with  the  Regulation  and  the  ineffective  and  inconsistent  enforcement  in  many 
Member States. 
The 2010 study served as input to the Commission Communication of 11 April 201112 
which reported on the varying interpretation being taken on the Regulation's provisions, 
due to grey zones and gaps in the current text, and the non-uniform enforcement across 
Member States. It further pointed towards the difficulties that passengers encounter in 
seeking to enforce their individual rights. 

The  Commission  White  Paper  on  Transport  adopted  on  28  March  2011  mentions 
among  its  initiatives  for  service  quality  and  reliability  the  need  to  "develop  a  uniform 
interpretation  of  EU  Law  on  passenger  rights  and  a  harmonised  and  effective 

11 
12 

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2007:0168:FIN:EN:PDF 
Communication  from  the  Commission  to  the  European  Parliament  and  the  Council  on  the 
application of Regulation 261/2004 establishing common rules on compensation and assistance 
to  passengers  in  the  event  of  denied  boarding  and  of  cancellation  or  long  delay  of  flights 
(http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0174:FIN:EN:PDF).  COM 
(2011) 174 final 

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enforcement,  to  ensure  both  a  level  playing  field  for  the  industry  and  a  European 
standard of protection for the citizens".13 
On  29  March  2012,  the  European  Parliament  (EP)  adopted  a  resolution14  on  the 
functioning and application of established rights of people travelling by air, in response 
to  the  above  mentioned  Commission  Communication.  The  EP  believes  that  proper 
application  of  the  existing  rules  by  Member  States  and  air  carriers,  enforcement  of 
sufficient  and  simple  means  of  redress  and  providing  passengers  with  accurate 
information concerning their rights should be the cornerstones of regaining passengers’ 
trust. The EP regrets that the enforcement bodies set up by the Member States do not 
always  ensure  effective  protection  of  passenger  rights,  to  the  detriment  of  air 
passengers.  With  regard  to  the  upcoming  revision  of  the  Regulation,  the  EP  asks  the 
Commission to clarify the passengers' rights, in particular the notion of ‘extraordinary 
circumstances’  and  the  rules  governing  the  provision  of  assistance  and  the  right  to 
redress and compensation. 

Case  law  has  also  had  a  decisive  impact  on  the  interpretation  of  the  Regulation  and, 
hence  its  application.  In  the  IATA  ruling  (C-344/04),  the  ECJ  confirmed  its  full 
compatibility with the Montreal Convention and the complementarities between the two 
legal  instruments.  In  case  C-549/07  Wallentin-Herrman,  the  Court  clarified  when  a 
technical problem in an aircraft cannot be regarded as an ‘extraordinary circumstance’. 
In  the  Sturgeon  case  (Joined  Cases  C-402/07  and  C-432/07,  further  confirmed  in  the 
Joined Cases C-581/10 and C-629/10), the ECJ held that a long delay of at least three 
hours at arrival entitles passengers to the same compensation as in the case of a flight 
cancellation  (with  the  same  exceptions  for  extraordinary  circumstances),  since  the 
inconvenience  suffered  by  passengers  is  similar.  Since  the  ECJ  rulings  are  directly 
applicable  and  legally  binding  from  the  date  that  the  relevant  Regulation  came  into 
force, all the carriers are legally obliged to respect them. 

Note  that  in  its  resolution  of  23  October  2012  on  passenger  rights  in  all  transport 
modes15,  the  EP  specifically  asks  the  Commission  to  examine  the  effects  of  the 
Sturgeon judgement in the context of a revision of Regulation 261/2004. 

Besides  the  issues  linked  to  interpretation  and  enforcement  of  the  Regulation,  the 
volcanic  ash  cloud  crisis  of  April  2010,  when  airspace  in  large  parts  of  Europe  was 
closed  for  several  days,  showed  that  the  Regulation  exposes  the  airlines  to  significant 
(and unlimited) costs and practical problems for assistance and rerouting in the case of 
such  large  scale  events.  This  aspect  was  raised  again  during  the  snow  crisis  of 
December 2010. 

13 

14 

15 

144 

final, 

system 

COM(2011) 

Roadmap to a Single European Transport Area  - Towards a competitive and resource efficient 
transport 
http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0144:FIN:EN:PDF 
European  Parliament  resolution  on  the  functioning  and  application  of  established  rights  of 
people 
2011/2150(INI), 
by 
http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P7-TA-
2012-99 
European  Parliament  resolution  on  passenger  rights  in  all  transport  modes  (2012/2067  INI), 
http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P7-TA-2012-
0371+0+DOC+XML+V0//EN&language=EN 

travelling 

page 

air, 

see 

23: 

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In this context, this IA report analyses the extent and underlying reasons of the observed 
shortcomings  of  the  current  legal  framework  and  assesses  how  these  shortcomings 
could be overcome. 

4. 

PROBLEM DEFINITION 

4.1. 

Nature of the problem 

The  wide  consultation  process,  the  external  expertise  mentioned  above,  the  ex-post 
assessments (see section 3.2, page 10) conducted and the internal analysis used over the 
last  years  about  the  application  of  Regulation  261/2004  (and  complementarily  the 
Montreal  Convention  and  Regulation  2027/97  in  so  far  as  they  concern  mishandled 
baggage) have shown that very often air passengers do not enjoy the rights to which 
they  are  entitled  in  case  their  travel  plans  are  disrupted,  i.e.  in  instances  of  denied 
boarding, long delays, cancellations or mishandled baggage. 

As  shown  in  annex  2  (p.66),  the  frequency  of  such  disruptions  is  relatively  low  in 
"regular  years"  (i.e.  without  major  disruptions  like  the  ash  cloud  crisis  in  2010):  on 
average less than 1.5% of passengers are affected by delays of more than two hours and 
less than 1% by cancellations, but such events have a significant impact for the affected 
passengers and their frequency may suddenly increase during exceptional events. 

Testimony by consumer organisations and NEBs in the course of the public consultation 
indicates  that  airlines  are  far  from  fully  complying  with  the  obligations  under  the 
regulatory framework and under Regulation 261/2004 in particular. 
Surveys (see annex 3, p.68) carried out in Germany, Denmark and the UK16 17 suggest 
that in a large proportion of cases airlines are failing to offer disrupted passengers the 
assistance required under the Regulation: 

•  three  quarters  of  the  surveyed  passengers  were  offered  the  rerouting  to  which  they 
are  entitled,  but  other  care  such  as  meals,  refreshments  and  accommodation  was 
offered in less than half of the cases; 

•  only  a  fraction  of  the  surveyed  passengers  that  were  entitled  to  financial 

compensation did receive it. 

Besides, the surveys show that the provision of information on disruption and the rights 
of  passengers  under  the  Regulation  is  poor:  less  than  half  of  the  affected  passengers 
seem to be correctly informed about their rights as required by the Regulation. 

testimony  from  consumer  organisations 

that  passengers 
Furthermore, 
generally do not receive adequate compensation for mishandled baggage as foreseen by 
the  Montreal  Convention  and  Regulation  2027/97  (e.g.  a  quarter  of  the  air  transport 
complaints  received  by  the  European  Consumer  Centres  relate  to  this  problem).  In 
particular,  associations  representing  disabled  passengers  and  passengers  with  reduced 

indicates 

16 

17 

Surveys  by  Verbraucherzentrale  Brandenburg,  Danish  Consumer  Council,  Which  (a  UK 
consumer association) and the UK Civil Aviation Authority 
These surveys are limited and do not allow to draw more detailed conclusions with certainty, but 
they  give  clear  indications  that  there  are  problems  with  regard  to  compliance  of  airlines  with 
passenger rights, although we should be careful not to generalise to all airlines as testimony from 
enforcement  bodies  indicates  that  the  degree  of  compliance  varies  between  airlines.  Note  also 
that  the  information  provided  form  these  different  sources  does not  allow  to  draw  conclusions 
with regard to the compliance by particular airline business models.  

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mobility  (PRM)  indicate  that  compensation  for  damage  to  or  loss  of  their  mobility 
equipment, which is subject to the limits stipulated by the Montreal Convention, is often 
insufficient to meet the cost of its repair or replacement given the high value of this type 
of equipment. It would appear that such passengers are not adequately informed about 
the  option,  which  the  Montreal  Convention  provides,  to  make  at  check-in  a  special 
declaration of interest in delivery at destination (which raises the limit of compensation 
payable up to the actual declared value of such equipment) or that air carriers request a 
high fee in accepting such a declaration. 

4.2. 

Underlying drivers of the problem 

When  it  comes  to  compliance  with  regulatory  obligations,  there  are  in  theory  two 
counteracting  forces  at  work.  On  the  one  hand,  enforcement  (both  sanctioning  policy 
and  individual  enforcement)  should  give  a  direct  incentive  to  airlines  for  compliance. 
On  the  other  hand,  costs  induced  by  the  Regulation  that  cannot  be  recovered  in  an 
appropriate manner could lead airlines to try to find ways to avoid granting passengers 
their rights. 

The  2010  and  2012  external  studies,  the  2011  Commission  Communication  and  the 
contributions to the public consultation confirm that the observed lack of compliance is 
encouraged by a combination of two factors: 

(1) 

(2) 

An insufficiently effective and uniform enforcement regime across Europe, and 

Certain  costs  of  the  obligations  imposed  by  the  Regulation  constitute  strong 
disincentives to compliance 

4.2.1. 

Insufficiently effective and uniform enforcement across Europe 

In the current situation, most stakeholder groups reported that the enforcement system 
put in place by the regulatory framework is not sufficiently effective and is not applied 
in  a  uniform  manner  across  the  EU.  This  situation  not  only  reduces  the  protection  of 
passengers' rights, but it also endangers the level-playing field between EU air carriers. 

The  stakeholder  consultation,  together  with  the  studies  and  Commission  internal 
analysis,  allowed  to  identify  three  main  problematic  aspects  with  the  current 
enforcement system: 

(1)  Difficulty in interpreting key aspects of the Regulation;  

(2) 

(3) 

Inconsistent and insufficiently effective sanctioning policies; 

Inadequate  complaint-handling  processes  and  insufficient  means  of 
individual redress. 

4.2.1.1.  Difficulty in interpreting key aspects of the Regulation  

EU law – i.e. Regulation 261/2004 or general consumer law, mainly Directive 93/13 on 
unfair  contract  terms  -  contains  a  certain  number  of  grey  zones,  creating  legal 
uncertainty  that  hinders  the  proper  enforcement  of  EU  law  leading  to  many  disputes 
between  air  carriers  and  passengers.  Air  carriers  are  enticed  to  interpret  measures  in 
their  favour  while  passengers  may  take  an  opposing  view.  The  difficulties  in 
interpretation  have  consequently  led  to  the  high  number  of  referrals  to  the  European 
Court of Justice (ECJ), where especially the rulings in the Wallentin-Hermann and the 
Sturgeon & Bock cases have had a significant impact on the interpretation, application 
and cost of the Regulation. 

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The lack of a definition of "extraordinary circumstances" 

Airlines  are  required  to  pay  financial  compensation  to  passengers  where  a  flight  is 
cancelled - depending on when the passenger is informed of the cancellation - or where 
a flight is delayed by more than three hours at arrival. However, the airline can avoid 
paying  compensation  if  it  can  show  that  the  cancellation  or  delay  was  caused  by 
“extraordinary  circumstances  which  could  not  have  been  avoided  even  if  all 
reasonable measures had been taken” (Article 5(3)). 

The ruling of the European Court of Justice of 22 December 2008 in the case Wallentin-
Herrmann  v  Alitalia  (C549/07)  has  narrowed  the  meaning  of  the  term  "extraordinary 
circumstance"  by  ruling  that  a  technical  problem  in  an  aircraft  which  leads  to  the 
cancellation of a flight is not covered by the concept of ‘extraordinary circumstances’ 
within the meaning of that provision, unless that problem stems from events which, by 
their nature or origin, are not inherent in the normal exercise of  the activity of  the  air 
carrier concerned and are beyond its actual control.  

As  confirmed  by  most  stakeholder  groups  during  the  public  consultation,  despite  the 
Wallentin-Herrman ruling many stakeholders believe that the term is still unclear, both 
in  relation  to  what  circumstances  can  be  considered  extraordinary,  and  what  type  of 
‘reasonable  measures’  a  carrier  would  have  to  take  in  order  to  meet  the  criteria  for 
exemption from payment of compensation. As a result, it appears that different NEBs – 
and different national judges - adopt different interpretations, in part depending on their 
reading of the ECJ's judgement. 

Regulatory complexity 

As  confirmed  by  the  contributions  of  consumer  groups  to  the  public  consultation,  the 
application of passengers' rights is further hindered by the complexity of the Regulation. 
This  is  also  refelected  by  the  thousands  of  passenger  inquiries  received  by  the 
Commission's  Europe  Direct  Contact  Centre  (EDCC)  and  which  contain  –  apart  from 
questions on non-compliance – many questions which reveal passengers' difficulties to 
understand  their  rights  or  how  to  enforce  them.  This  relates  mainly  to  the  following 
issues: 

• 

• 

• 

unclear rights: EU law - be it Regulation 261/2004 or general consumer law - 
remains  vague  with  regard  to  the  rights  of  passengers  for  a  number  of  issues 
closely  related  to  disruptions  of  a  passenger's  travel  plans.  These  issues  are 
further  developped  in  annex  4  (p.70):  rights  of  the  passenger  in  case  of  a 
missed connecting flight, advance rescheduling, right of rerouting, "no show" 
policy, booking errors, tarmac delays, flight diversions. 

confusion about the NEB's role with regard to general enforcement (monitoring 
and  sanctionning)  and  individual  enforcement  (complaint  handling,  possibly 
mediation); 

in view of the number of different time thresholds existing in the Regulation, 
problems  in  understanding  how  it  applies  to  a  particular  case:  different  time 
thresholds for compensation (3 hrs), for care/assistance (2, 3 or 4 hrs depending 
on flight distance) and for the right to reimbursement (5 hrs). 

4.2.1.2.  Inconsistent and insufficiently effective sanctioning policies 

The enforcement policy varies in terms of effectiveness across Member States (see also 
annex  5,  p.  73):  the  various  NEBs  do  not  have  access  to  the  same  level  of  resources, 

EN 

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their sanction policies differ and they do not interpret various parts of the Regulation in 
the same way. Currently no formal coordination procedure exists between the national 
enforcement bodies (NEBs) and informal coordination (via the NEB network) seems to 
have reached its limits as informal meetings of NEBs lack the authority to take binding 
decisions. 

During  the  public  consultation,  consumer  groups  mainly  complained  about  the 
ineffectiveness  of  the  enforcement  policy,  while  airlines  referred  to  a  lack  of 
consistency between national policies. 

Moreover, Article 16(3) of the Regulation requires Member States to impose sanctions 
for infringements which are effective, proportionate and dissuasive, the intention being 
to  create  an  economic  incentive  for  air  carriers  to  comply  with  the  Regulation. 
However, the enforcement by the Member States often falls short of these requirements 
and  the  sanctions  regime  often  does  not  provide  an  economic  incentive  for  carriers  to 
comply with the Regulation. 

The identified problems generally do not arise from failings by the NEB, but from wider 
legal or administrative issues in the State concerned: 

• 

• 

• 

legal or procedural impediments to imposition of sanctions, which means that 
the sanctions regime cannot provide an incentive;  

difficulties in either imposing or collecting sanctions in relation to carriers not 
based in the State, meaning that sanctions cannot provide an incentive for these 
carriers to comply with the Regulation; and 

sanctions  which  are  too  low  to  provide  an  economic  incentive  for  carriers  to 
comply  with  the  Regulation,  taking  into  account  that  only  a  very  small 
proportion of passengers impacted by an infringement are likely to complain to 
the NEB. 

Note  that  enforcement  as  improved  over  time,  but  not  enough  to  overcome  all 
shortcomings (see section 3.2 with regard to previous evaluations). The option for the 
Commission  to  act  against  Member  States  is  limited  by  the  vague  definition  of  the 
NEBs role in the Regulation. Moreover, in the absence of any information obligations 
on  their  monitoring  and  sanctioning  activities,  the  provision  of  information  from  the 
NEBs  to  the  Commission  remains  irregular  and  lacks  detail  (despite  improvements 
thanks to regular informal contacts in recent years). 

Finally, the provisions of the Montreal Convention with regard to mishandled baggage 
are  not  enforced  because  no  specific  enforcement  body  is  foreseen  neither  by  the 
Montreal  Convention  nor  by  Regulation  2027/97.  Affected  passengers  are  entirely 
dependent  on  the  policy  and  goodwill  of  air  carriers  and  the  in-court  and  out-of-court 
means of settlement or have to rely on private travel insurance (where available). 

It  follows  that,  in  the  absence  of  a  credible  and  dissuasive  enforcement  policy,  air 
carriers are not encouraged from granting air passengers their rights especially if their 
competitors are not doing so. 

4.2.1.3.  Complex  complaint-handling  processes  and  insufficient  means  of  individual 

redress 

As  confirmed  by  contributions  from  consumer  associations  to  the  public  consultation, 
individual  means  of  redress  for  passengers  are  limited  and  the  complaint-handling 
process can be complex: 

EN 

15 

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• 

• 

face 
Inadequate  complaint  handling  procedures:  many  passengers 
difficulties  in  submitting  a  complaint  to  an  air  carrier,  either  because  the 
contact  details  of  the  air  carrier  are  difficult  to  obtain,  the  process  of  filing  a 
complaint  is  unclear  or  the  air  carrier  does  not  respond  within  a  reasonable 
time period to the submitted complaint or its answer is insufficiently detailed. 
Similar  shortcomings  are  reported  with  regard  to  the  NEBs;  in  addition,  in 
particular  passengers  are  often  confused  by  the  role  of  NEBs  with  regard  to 
individual enforcement (compared to general enforcement). 

Inadequate  means  of  court  and  out-of-court  dispute  settlement:  small 
claims procedures in civil courts can be slow and expensive and judges often 
lack  relevant  experience  in  aviation  law.  Many  passengers  are  therefore 
discouraged from pursuing their claims in court. But out-of-court procedures – 
either via NEBs or via alternative dispute resolution mechanisms (ADR) – only 
exist  and  apply  to  air  transport  in  some  Member  States.  Note  that  the  latter 
issue is already being addressed by another EU initiative (see page 22). 

As  the  current  system  does  not  provide  adequate  tools  to  passengers  to  enforce  the 
Regulation  independently,  passengers  are  being  discouraged  from  claiming  their 
rights in situations where they are entitled to them. This can be seen in the low claim 
rate for financial compensation in case of cancellation or long delays (where financial 
compensation  is  not  automatic  but  needs  to  be  claimed).  Indeed,  data  from  airlines 
indicate  that  only  between  5  and  10%  of  passengers  entitled  to  compensation  do 
actually claim it. This low "claim rate" can be explained by two factors: first, the low 
awareness  of  passengers  about  their  rights,  also  because  reportedly  airlines  do  not 
always  correctly  inform  their  passengers  about  their  rights;  and  second,  the  above 
mentioned  difficulties  linked  to  complaint  handling  seem  to  discourage  many 
passengers from even claiming their rights. 

4.2.2.  Certain  costs  of  the  obligations  imposed  by  the  Regulation  constitute  strong 

disincentives for compliance 

The public and targeted consultations have shown that: 

(3) 

Airlines  are  not  able  to  bear  or  to  price  in  costs  and  risks  (of  assistance/care 
and compensation) in certain situations: 

(a) 

(b) 

in  extraordinary  events  of  long  duration,  which  are  beyond  the  airlines 
control, the obligations are potentially of an unlimited duration; 

in certain small-scale operations (with small aircraft on short distances), 
the costs of the Regulation increase disproportionately to the air fare; 

(4) 

(5) 

Certain aspects of the financial compensation (which comes on top of care 
and assistance) have a strong disincentivizing effect; 

Airlines  are  liable  for  care  and  compensation  where  disruptions  are  due  to 
third parties, but the latter do not get economic incentives to take measures to 
reduce the frequency and/or the severety of such disruptions. 

As shown below, all these elements imply that, in current circumstances, airlines cannot 
recover or insure in an appropriate manner certain costs induced by the Regulation. This 
acts as a strong disincentive for compliance. 

Note that annex 6 (p.76) shows that the competition of air carriers with non-EU airlines 
could  constitue  an  additional  but  limited  disincentive  to  comply  for  the  directly 

EN 

16 

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concerned  carriers.  But  for  reasons  of  extra-territoriality,  Regulation  261/2004  is  not 
applicable  to  flights  operated  from  third  country  airports  by  carriers  from  third 
countries. 

Airlines  are  not  able  to  bear  or  to  price  in  costs  and  risks  (of  assistance/care 

(1) 
and compensation) in certain situations 

Unlimited  liability  with  regard  to  some  obligations  in  extraordinary  events  of  long 
duration 

While  financial  compensation  is  not  due  in  situations  of  extraordinary  circumstances, 
Regulation 261/2004 does not fix a limit in time to the cost of assistance and care to be 
provided  by  the  air  carrier,  even  in  situations  which  are  beyond  its  control.  This 
unlimited and unpredictable liability complicates the airlines' financial planning as it is 
currently  impossible  to  insure  and  therefore  may  constitute  a  risk  to  their  financial 
stability. 

The experience of the ash cloud crisis in April 2010 has shown that, although the cost of 
the  Regulation  remains  limited  in  "regular"  circumstances,  it  can  quickly  take 
disproportionate  dimensions  for  example  when  an  event  takes  place  that  causes  mass 
disruption.The cost of the right to care, especially the accommodation costs for several 
nights,  and  the  cost  (and  the  difficulty  of  organisation)  of  rerouting  via  alternative 
transport  modes  (if  available)  have  been  significant.  If  the  Regulation  had  been  fully 
complied with during the crisis, it would have increased airlines' combined costs by an 
estimated €960 million (which is roughly 1.5 times the expenses for care and assistance 
in a "regular" year, and this within a period of less than a week). See annex 9 (p.100) for 
an overview of the costs linked to the ash cloud crisis. 

The frequency of such events is very low and consequently, air carriers are not able to 
estimate  its  probability  and  to  adequately  price  this  risk  into  their  fares,  although  a 
single  such  event  will  require  considerable  resources.  Therefore,  where  such  an  event 
occurs, air carriers may not have available sufficient resources to cope with the care and 
assistance  to  so  many  passengers.  Moreover,  it  is  unlikely  that  airlines  could  find 
insurance to cover against business disruptions during such events which could impact 
flights throughout Europe for a prolonged period and which would lead to exceptionally 
large  claims.  The  association  of  insurers  CEA  stated  that  it  would  not  be  possible  to 
offer  insurance  to  cover  the  risk  of  these  events,  because  their  frequency  and  severity 
are difficult to properly assess and because the limited scope of the aviation insurance 
market  means  that  it  would  be  difficult  to  maintain  an  adequate  insurance  capacity 
without charging very high premiums.  

The public consultation has confirmed widespread dissatisfaction from both, consumer 
groups and airlines, with the application of passenger rights during the ash cloud crisis. 
Airlines  complained  about  the  practical  and  financial  difficulties  of  implementing  the 
Regulation  in  such  an  event,  while  consumer  organisations  complained  about 
insufficient  compliance  by  air  carriers.  The  cost  of  the  expected  care  and  assistance 
could sometimes become a multiple of the value of the transport service the passenger 
originally  acquired  and  the  organisational  and/or  financial  capacities  of  airlines  (and 
airports) were overtaken by the huge number of stranded passengers in such a short time 
period; the situation led to frustration on both sides, airlines and passengers, with regard 
to  a  situation  which  could  not  have  been  foreseen  at  the  time  the  Regulation  was 
adopted. 

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Certain  costs  of  care/assistance  are  out  of  proportion  with  regard  to  the  carrier's 
revenues for certain small-scale operations  
As shown in annex 918 (p.100), the impact of the Regulation's obligations varies by air 
carrier type. Despite some data limitations19, data provided by some of the interviewed 
air  carriers  indicate  the  main  reasons  behind  these  differences.  For  example,  charter 
carriers, which mainly carry package travellers, typically do not cancel flights, but may 
then experience long delays for such flights – therefore, the compliance cost for charter 
carriers is primarily on delays (e.g. hence a stronger impact of the Sturgeon judgement 
than  for  other  carrier  types).  The  absolute  compliance  cost  is  similar  for  low-cost  and 
traditional  scheduled  carriers  but,  because  low-cost  carriers'  tickets  are  typically  of  a 
lower value, the compliance cost as a percentage of carrier revenue is much higher for 
the low-cost carriers. This low-value-ticket effect also applies to regional carriers but, in 
addition,  the  absolute  compliance  cost  is  also  higher  for  regional  carriers.  This  small-
scale effect observed for the large category of regional carriers is even more pronounced 
when  looking  at  the  smallest  types  of  operations,  i.e.  short-distance  flights  with  small 
aircraft. 

When  the  Regulation  was  introduced  in  2004,  the  specific  impact  that  its  provisions 
could have on small regional operations was not taken into account. However, as shown 
in annex 9 (p.100), the incremental cost20 of the obligations of the Regulation appears to 
be heaviest for the regional carriers21. There are clear indications in the data analysed 
by the consultant that the absolute and relative cost of the obligations under Regulation 
261/2004  increases  the  smaller  the  scale  of  the  operations.  Data  analysis  and 
stakeholder  contacts  point  towards  a  higher  cancellation  rate  that  increases  mainly 
accommodation  costs  and  financial  compensation  and  which  is  due  to  numerous 
underlying reasons, for example the use of smaller aircraft which are more vulnerable to 
adverse  weather,  the  high  frequency  of  take-offs  and  landings  which  makes  small 
regional aircraft more vulnerable to technical defaults or the fact that regional carriers 
typically  have  small  aircraft  fleets  and  therefore  less  replacement  options  than  bigger 
carriers. 

The  higher  costs  translate  into  higher  prices  which  can  be  significant  enough  to 
discourage passengers from travelling by air to make that journey or from travelling at 
all.  Passengers  do  not  necessarily  value  these  rights  as  high  as  the  price  increase  that 
they involve. This may have a negative impact on regional accessibility as these carriers 
often serve islands or other remote areas which are very dependent upon air transport. 

18 
19 

20 

21 

Annexes 7, 8a and 8b explain the assumptions and data underlying the calculations 
Delay  data  are  broken  down  by  cause  or  by  carrier  type  (see  annex  2,  p.  66),  but  cannot  be 
broken down at the same time by carrier type and by delay cause. For cancellations, no official 
data are available; therefore estimates were made on the basis of the data provided by some of 
the interviewed air carriers. 
The  incremental  cost  of  the  Regulation  is  its  cost  relative  to  a  situation  in  which  it  would  not 
exist  (but  where  the  Montreal  Convention  and  other  EU  consumer  law  such  as  the  Unfair 
Contract Terms Directive 93/13 would remain applicable) 
Micro-enterprises  (defined  as  companies  with  fewer  than  10  employees  and  a  turnover  or 
balance sheet total equal to or less than €2 million) are not concerned by this report; indeed, even 
the  smallest  airlines  offering  services  that  fall  within  the  scope  of  the  Regulation  have  more 
employees.  But  also  the  number  of  small  and  medium-sized  enterprises  (SMEs)  that  fall 
within the scope of this Regulation is very limited (around 30).  

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The main cost driver for the regional carriers is the cost of accomodation to be provided 
to stranded passengers (which is part of the category "care" in the table on page 102 of 
annex 9). Given the low value ot tickets on very short routes (e.g. less than 250 km), the 
provision of accomodation can easily imply a cost higher than the ticket value. 

(2) Disincentivizing effect of certain aspects of the financial compensation 

Resistence  from  air  carriers  against  financial  compensation  has  increased  since  the 
Sturgeon  judgement,  which  extended  compensation  payments  from  cancellations  to 
long delays, and the Wallentin judgement, which extended compensation to many cases 
where the flight disruption is not due to an airline's commercial decision (e.g. technical 
defaults).  In  the  public  consultation,  the  airlines  confirmed  their  view  with  regard  to 
compensation, often referring to the cases where compensation went beyond the value 
of  the  ticket.  Note,  however,  that  consumer  groups  are  opposed  to  a  reduction  in 
compensation levels. 

The financial compensation can have a disincentivising effect in two ways: 

1.  The  Sturgeon  judgement  has  fixed  a  one-trigger  time  threshold  of  3  hours  for 
compensation  in  cases  of  delay.  However,  many  delays  cannot  be  resolved  within  the 
three  hours  fixed  in  the  judgement  and  this  –  in  combination  with  the  next  point  – 
strongly  discourages  airlines  from  complying,  as  suggested  by  airlines  and  their 
associations during the consultation. In addition, as shown in section 7.2.1 (on p.55), a 
short time threshold may increase the number of flight cancellations. 

2. The standardised compensation in the Regulation serves to compensate a loss of time 
which is common to all passengers (individual damage suffered beyond this common 
element  is  governed  by  the  conditions  for  compensation  specifed  in  the  Montreal 
Convention)22 . However, the amounts fixed in the Regulation23 can in many cases go 
beyond the value of the damage (i.e loss of time) incurred by passengers as established 
by economic studies24. This aspect plays a significant role in discouraging airlines from 
granting passengers their rights, especially with respect to the short time thresholds for 
compensation for delay (Sturgeon) and in combination with the restrictive definition of 
extraordinary circumstances (Wallentin).  

(3)  Lack  of  economic  incentives  for  third  parties  to  take  measures  to  reduce  the 
frequency and/or the severity of flight disruptions. 

The application of Regulation 261/2004 has shown a lack of transparency with regard to 
the  liability  of  the  different  actors  in  the  industry  chain.  The  party  responsible  for 
flight  disruptions  is  not  always  clearly  identified  and  the  cost  of  passenger  rights  is 

22 

23 

24 

This  is  confirmed  by  paragraph  52  of  the  Sturgeon  judgement  (joined  cases  C-402/07  and  C-
432/07), Paragraphs 46 to 60 of the judgement in the joined cases C581/10 and C629/10 repeats 
this point of view. 
Levels of compensation are: €250 below 1500 km, €400 for 1500-3500 km, €600 for more than 
3500km 
In the Handbook on estimation of external costs in the transport sector, used for reference by the 
Commission services and which provides an overview of such studies, the estimated values of 
waiting time are, based on willingness-to-pay surveys and after adjustment for inflation, between 
€16  per  hour  (for  leisure  travel)  and  €39  per  hour  (for  business  travel).  The  handbook 
recommends the multiplication by 2.5 in case of unexpected delays, giving respectively €40 and 
€98. As we are referring to standardised amounts covering a damage common to all passengers, 
it  is  the  lowest  value  that  should  be  taken  as  reference.  Study  done  for  the  Commission,  see 
pages 29 and 30 (http://ec.europa.eu/transport/sustainable/doc/2008_costs_handbook.pdf) 

EN 

19 

   EN 

 
                                                 
mostly borne by the air carriers, with limited possibilities of recourse against a possible 
responsible  third  party.  Although  most  of  this  cost  will  ultimately  be  borne  by  the 
passenger,  in  ticket  prices,  such  system  may  fail  to  give  sufficient  incentives  to  third 
parties  to  address  the  origins  and  the  severety  of  the  flight  disruptions  and  further 
reduces the incentive on airlines to comply with these rights. 

Article  13  of  the  Regulation  does  not  preclude  air  carriers  from  claiming  costs  from 
third parties where they are responsible for the disruption. However, in itself, it does not 
provide  any  such  right  and  to  date  airlines  state  they  have  not  been  able  to  claim 
successfully against third parties. The main third parties, who could be responsible for 
disruption,  are  principally  airports,  air  navigation  service  providers  (ANSPs)  and 
ground handlers. But in practice it is very difficult to claim against these bodies in view 
of  legal  obstacles  in contracts  or  national  law  (e.g.  airport  conditions  of  use  generally 
only  allow  claims  in  very  exceptional  cases  which  are  difficult  to  prove;  airports  and 
ANSPs  are  usually  government  bodies  and  may  have  State  immunity  from  claims; 
ground  handlers  are  protected  by  the  IATA  Standard  Ground  Handling  Agreement, 
which means that in most circumstances airlines cannot claim costs from them25). 

Note that, during the public consultation, most stakeholders argued in favour of such a 
form  of  "burden  sharing",  but  the  airports  were  clearly  opposed  to  any  measure  that 
would shift part of the compliance cost to them. 

Table 1 : Synoptic table of problem and drivers 

Problem: Lack of compliance with EU regulatory framework 

Driver  1: 
uniform enforcement across Europe 

Insufficiently  effective  and 

Driver  2:  Certain  costs  of  obligations 
the  Regulation  act  as 
imposed  by 
disincentives 
compliance  with 
for 
passenger rights 

Difficulty  to  interpret  key  aspects  of 
Regulation 

Inconsistent  and  insufficiently  effective 
sanctioning policies 

Inadequate  complaint-handling  processes 
and 
individual 
redress 

insufficient  means  of 

Strong  disincentives  in  specific  situations 
(extraordinary  events  of  long  duration, 
small-scale operations) 

Certain  aspects  of  financial  compensation 
discourage compliance 

Lack  of  incentives  for  responsible  third 
parties 

4.3.  Who is affected, in what ways and to what extent? 

Various categories of actors are affected by the identified problems: 

1. 

25 

The citizens/passengers who are the beneficiaries of the transport services and 
of the passenger rights granted by the Regulation: as mentioned above, in many 
cases they are not granted the rights to which they are entitled. 

Although it could be argued that airlines contract with ground handlers competitively and could 
therefore require a change to this agreement, at most airports airlines have only a limited choice 
of  ground  handling  providers,  and  therefore  they  are  not  necessarily  able  to  negotiate  any 
change. 

EN 

20 

   EN 

 
                                                 
2. 

3. 

4. 

The  air  carriers  which  provide  the  transport  services  and  which  are  due  to 
respect  air  passengers'  rights:  the  obligations  flowing  from  air  passenger  rights 
incur  costs  for  the  airlines  and  which  become  disproportionate  in  certain 
circumstances. 

The  (at  least  27)  national  enforcement  bodies  which  are  responsible  for 
ensuring the correct application of the Regulation: inconsistent policies between 
them affect the level of protection of the passengers and the level-playing field 
between  airlines.  The  enforcement  of  passenger  rights  requires  human  and 
financial resources that weigh on national budgets. 

Airports  –  first,  because  the  flight  disruptions  usually  take  place  in  airports; 
second,  because  airports  sometimes  provide  care  and  assistance  to  passengers, 
where airlines fail to provide it – for whatever reason. 

4.4. 

Likely evolution of the problem (baseline scenario) 

In the baseline scenario – which assumes unchanged policy – the scale of the problems 
is  not  expected  to  evolve  significantly  (except  for  out-of-court  means  for  individual 
redress).  Overall,  it  is  not  expected  that  over  time  airlines  will  get  more  incentives  to 
comply  with  the  air  passenger  rights  regulation.  The  underlying  root  causes  are  not 
expected to significantly change over time. 

Grey zones in the Regulation 

Some  of  the  regulatory  grey  zones  in  the  Regulation  may  be  addressed  through 
judgements  issued  by  the  Court  of  Justice.  Indeed,  the  ECJ  has  been  seized  on  more 
than  20  prejudicial  questions  with  regard  to  Regulation  261/2004,  many  of  them  still 
outstanding.  But  in  most  cases,  these  judgements  concern  one  particular  issue,  leave 
open  others  and  take  considerable  time  to  be  decided.  In  addition,  although  in  legal 
terms these judgements address the lack of clarity in the text of the Regulation, it would 
be  clearer  for  passengers,  airlines,  and  enforcement  bodies  if  the  obligations  of  the 
Regulation were clear in the text. 

General enforcement (monitoring and sanctioning) 

Studies  of  the  enforcement  of  the  Regulation  (see  section  3.2)  have  shown  gradual 
improvements over time, but this improvement has been slow. In the initial years after 
the Regulation took effect, the Commission had to intervene in particular because some 
Member States had not yet set up the processes to do so (for example, penalties had not 
been introduced into national law). However, almost 7 years after it took effect, many 
Member States still do not enforce the Regulation effectively and therefore it is likely 
that some Member States will continue  not  to do so. In addition, constraints to public 
finances in many Member States may result in reductions in staff at enforcement bodies, 
which may reduce the effectiveness of enforcement. 

Individual enforcement (complaint handling) 

The  possibilities  of  individual  redress  are  expected  to  improve  under  the  impulse  of 
general consumer legislation. 

On  29  November  2011,  the  Commission  proposed  a  Directive  on  alternative  dispute 
resolution for consumer disputes (Directive on consumer ADR)26 and a Regulation on 

26 

COM(2011) 793. 

EN 

21 

   EN 

 
                                                 
online  dispute  resolution  for  consumer  disputes  (Regulation  on  consumer  ODR)27. 
These  proposals  are  now  being  discussed  in  the  European  Parliament  and  in  the 
Council. 

Under the proposed Directive on consumer ADR, Member States shall ensure that all 
contractual disputes between a consumer and a trader arising from the sale of goods or 
the provision of services can be submitted to an ADR entity. This also includes disputes 
between passengers and air carriers. The proposal ensures that passengers will be able to 
find  information  on  the  competent  ADR  entity  in  the  main  commercial  documents 
provided by the air carrier.  

The  proposal  for  a  Regulation  on  consumer  ODR  aims  at  establishing  a  European 
online  dispute  resolution  platform  ("ODR  platform").  The  proposed  ODR  Regulation 
establishes  a  network  of  ODR  facilitators  for  the  single  EU-wide  ODR  platform,  in  the 
form  of  an  interactive  website  which  offers  a  single  point  of  entry  to  consumers  and 
traders who seek to resolve a dispute. Consumers and traders will be able to submit their 
complaints  through  an  electronic  complaint  form  which  will  be  available  on  the 
platform’s  website  in  all  official  languages  of  the  EU.  The  platform  will  check  if  a 
complaint  can  be  processed  and  seek  the  agreement  of  the  parties  to  transmit  the 
complaint to the ADR scheme which is competent to deal with the dispute. 

Disincentives from the cost of the legislation 

The incremental compliance cost of the legislation on airlines is expected to increase 
more or less in line with airlines' revenues. At unchanged legislation (baseline scenario), 
the  incremental  cost  of  the  legislation  on  airlines  will  increase  from  €0.9  billion  on 
average over 2007-2009 to €1.7 billion in  2025, mostly due to traffic growth. 

The baseline scenario was calculated on the assumption that the disruption rates would 
remain on their average levels of 2007-2009. It follows that the number of disruptions 
remains  in  line  with  traffic  growth.  With  respect  to  specific  traffic  categories,  it  was 
assumed  that  on  the  basis  of  recent  trends,  for  intra-EU  flights  of  less  than  1,500km, 
only  low  cost  carriers  (LCCs)  would  experience  growth.  In  addition,  given  the  long-
term trends towards passengers arranging their own travel itineraries, charter traffic was 
assumed  not  to  grow  on  any  category  of  route.  For  other  market  segments,  future 
demand was estimated using Airbus’ Global Market Forecast (see annex 8b for a more 
detailed  description  of  the  underlying  assumptions).  The  proportion  of  passengers 
claiming compensation for cancellations and delays ("claim rate") is assumed to slowly 
increase  over  time  under  the  influence  of  information  campaigns,  the  work  of 
commercial  claim  services  and,  potentially  in  some  Member  States,  introduction  of 
provisions  allowing  collective  action  to  claim  compensation  on  the  part  of  a  group  of 
consumers.  Total  cost  therefore  increases  slowly  as  a  share  of  airline  revenue,  from 
0.6% over 2007-2009 to 0.7% in 2025.  

Almost the entire compliance cost is carried by airlines, although the biggest part will 
ultimately be borne by the passengers through higher fares. Indeed, as the estimated cost 
variations  would  apply  to  all  airlines  operating  in  the  EU,  we  need  to  refer  to  price 
elasticity of demand on a supra-national level; demand is estimated to be quite inelastic 

27 

COM(2011) 794. 

EN 

22 

   EN 

 
                                                 
(estimates  of  -0.6  to  -0.8  are  reported28),  therefore  airlines  should  be  able  to  transfer 
most of the cost variations via fare variations to their passengers. 

Costs are also incurred by Member States, due to the requirement to establish and fund 
national  enforcement  bodies  (NEBs).  The  cost  for  Member  States  is  estimated  to 
increase from approximately €27 million  now to €46 million by 2025, which is in line 
with  traffic  growth  (the  underlying  assumption  is  that  the  number  of  complaints 
increases in the same proportion as air traffic). 

Extraordinary events of long duration 

In 2010, delays and cancellations increased as a result of the volcanic ash crisis which 
led to a complete closure of airspace across northern Europe. A number of other events 
including particularly bad winter weather and strikes by air traffic controllers (the latter 
leading to the complete closure of Spanish airspace in December) added to this event in 
2010.  Whilst  2010  was  a  particularly  bad  year  there  may  be  exceptional  events  in  the 
future.  

As  there  has  been  no  event  comparable  to  volcanic  ash  before,  we  do  not  know  the 
likelihood of such type of events. Note that even if such an ash cloud event were to be 
repeated,  better  understanding  of  the  problem  being  reflected  in  changes  to  safety 
regulations  mean  that  this  would  now  be  less  likely  to  cause  the  complete  closure  of 
airspace.  Therefore,  the  probability  that  the  Regulation  would  generate  an  exceptional 
economic cost to a comparable extent to that it generated in 2010 is low but cannot be 
further quantified. 

Third party responsibility 

Although  Article  13  of  the  Regulation  states  that  carriers  are  not  prevented  from 
claiming the costs of compliance from responsible third parties, there are limited legal 
means  for  airlines  to  claim  against  the  third  parties  most  likely  to  be  responsible  for 
disruption (e.g. airports, ANSPs). Some airlines are nonetheless trying to do so through 
national  courts;  at  the  time  of  writing  this  report  these  cases  had  not  been  decided  or 
were unsuccessful. 

4.5. 

Should the EU act? 

According to Article 4 of the TFEU, and without prejudice to Article 3(2) of the same 
treaty and to the Court of Justice of the European Union's case law, EU action regarding 
passenger rights, as part of the common air transport policy, has to be justified. In the 
present  case,  it  is  therefore  necessary  that  the  subsidiarity  principle  set  out  in  Article 
5(3)  of  the  Treaty  on  the  European  Union  is  respected.  This  involves  assessing  two 
aspects. 

Firstly,  it  has  to  be  assessed  if  the  objectives  of  the  proposed  action  could  not  be 
achieved sufficiently by Member States in the framework of their national constitutional 
system,  the  so-called  necessity  test.  In  the  present  case,  there  is  limited  scope  for 
Member  States  to  act  alone  to  protect  consumers,  as  the  Air  Services  Regulation 
1008/200829 does not allow scope for them to place additional requirements (other than 

28 

29 

See the 2012 study by Steer Dvaies Gleave, appendix C, page 38 or the IATA economic briefing 
No 9 of April 2008 
Regulation  (EC)  No  1008/2008  of  the  European  Parliament  and  of  the  Council  of 
24 September 2008  establishing  common  rules  for  the  operation  of  air  services  in  the 
Community, OJ L 293 of 31.10.2008. 

EN 

23 

   EN 

 
                                                 
those specified in the Regulation) on Community  air  carriers  seeking to operate  intra-
Community services. 

Secondly,  it  has  to  be  considered  whether  and  how  the  objectives  could  be  better 
achieved by action on the part of the EU, the so-called “test of European added value". 
Most of the problems identified above refer to divergences of application/enforcement 
of Regulation 261/2004 across Member States which weaken passengers' rights and the 
level-playing field between air carriers. The EU level appears to be the appropriate level 
to address these problems in order to ensure uniform passenger rights across all Member 
States  (and  across  third  countries  effectively  taking  part  in  the  single  air  transport 
market via international agreements). 

Indeed, addressing regulatory gaps and inconsistencies in EU law in an uncoordinated 
manner  generates  more  fragmentation  and  exacerbates  the  problem.  Only  coordinated 
EU intervention can contribute to the completion of the internal air transport market by 
solving these problems. Article 100(2) of the TFEU allows the European Parliament and 
the Council to lay down appropriate provisions for air transport. 

5. 

OBJECTIVES 

5.1. 

Policy objectives 

5.1.1.  General objectives 

In light of the problems identified in section 4 above and pursuant to article 100(2) of 
the  TFEU,  the  general  objective  of  this  initiative  is  to  promote  the  interest  of  air 
passengers  by  ensuring  that  air  carriers  comply  with  a  high  level  of  air  passenger 
protection  during  travel  disruptions,  while  ensuring  that  air  carriers  operate  under 
harmonised conditions in a liberalised market. 

5.1.2. 

Specific objectives 

Based  on  the  root  causes  of  the  problem  identified  in  section  4,  the  general  objective 
above can be translated into more specific objectives: 

1. To ensure effective and consistent enforcement of passenger rights across the EU by: 

1.1.  Clarifying  definitions  and  key  principles  underlying  passenger  rights  and 
simplifying the rights;  

1.2. Ensuring effective and consistent sanctioning policy; 

1.3. Ensuring effective complaint–handling processes and means of redress for 
passengers  

2.  To  reduce  the  disincentivising  effects  on  airlines  of  certain  costs  of  the  Regulation 
by: 

2.1.  Ensuring  that  airlines  obligations  with  regard  to  passenger  rights  cover 
risks  that  are  limited  in  time  and/or  in  size  (so  as  to  allow  for  potential 
insurability);  

2.2.  Ensuring  that  financial  compensation  in  certain  situations  does  not 
translate into decisive disincentives for compliance; 

2.3.  Ensuring  that  third  parties  are  incentivised  to  address  the  causes  of  the 
travel disruptions for which they are responsible.  

EN 

24 

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Table 2: correspondence between the objectives and the above described problems  

Identified problem 

General objective 

Insufficient  compliance  with  passenger 
rights 

Ensuring  compliance  of  airlines  with  a 
high level of air passenger protection 

Drivers 

Specific objectives 

and 

Insufficiently 
effective 
uniform 
enforcement 
across Europe 

Difficulty  to  interpret 
the 
key  aspects  of 
(grey 
Regulation 
zones), 
regulatory 
complexity 

Ensure 
effective  and 
consistent 
enforcement 

Clarify  definitions  and 
key  principles,  simplify 
rights 

and 
Inconsistent 
insufficiently  effective 
sanctioning policies 

Inadequate  complaint-
handling process 

disincentives 
Strong 
from  costs  in  specific 
situations 
(extraordinary  events 
duration; 
of 
small-scale operations)

long 

Disincentives  for 
compliance  with 
passenger rights 

of 

aspects 

Certain 
financial 
compensation 
discourage 
compliance,  especially 
for long delays 

Ensure 
consistent 
policy 

effective 

and 
sanctioning 

Ensure 
complaint-handling 

effective 

Reduce 
disincentives 
for compliance

airlines' 
that 
Ensure 
obligations  cover  risks 
that  are  limited  in  time 
and/or size. 

Make 
compensation 
desincentivizing, 
especially 
for 
delays 

financial 
less 

long 

Lack 
of 
incentives 
responsible 
parties 

economic 
for 
third 

economic 
Introduce 
for 
incentives 
responsible  third  parties 
to address disruptions 

5.1.3.  Operational objectives 

The defined specific objectives can be translated into operational objectives which will 
be useful for future monitoring and evaluation (see section 8): 

In relation with the objective of effective and consistent enforcement 

1. Reduce the number of prejudicial questions; 

2. Ensure that airlines can expect to be sanctioned for similar infringements across the 
EU; 

EN 

25 

   EN 

 
3. Reduce the number of disputes between passengers and airlines. 

In relation with the reduction of the disincentivizing effects on airlines of certain costs 
of the Regulation 

4. Ensure the predictability of the cost of the Regulation's obligations; 

5. Ensure that the total amount of compensations paid, especially for long delays, does 
not take a disproportionate share of the total cost of compliance; 

6. Ensure that third parties share their part of responsibility. 

5.2. 

Possible trade-offs between policy objectives 

The  two  specific  objectives  correspond  to  the  two  main  drivers  for  insufficient 
compliance with air passenger rights. As both, a stronger enforcement and a reduction 
of the disincentives flowing from certain costs, contribute  to  improving  compliance, a 
trade-off between these policy objectives is possible, putting either more weight on the 
first or on the second, or finding a balance between both policy objectives. This trade-
off will be translated into the selection of the policy options (see section 6.3). 

Note  that  this  also  implies  a  trade-off  between  the  general  objective  of  protecting 
passenger  rights  and  the  specific  objective  of  reducing  the  disincentivising  effects  of 
certain  costs  of  the  Regulation.  Indeed,  ensuring  that  the  costs  induced  by  the 
Regulation can be limited for airlines in specific situations (see objectives 2.1 and 2.2), 
where this is not the case now, may weaken in some cases certain passenger rights. It 
follows  that  passengers'  rights  may  be  limited  in  specific  circumstances  (e.g.  in 
extraordinary  events  of  long  duration)  while  they  are  being  reinforced  in  others  (e.g. 
better  enforcement;  clarification  of  rights).  The  assessment  of  the  options  will  pay 
special attention to these trade-offs. 

Consistency with other EU policies 

5.3. 
The Package Travel Directive 90/31430 is currently under review. DG JUST, which is 
in  charge  of  the  Directive,  and  DG  MOVE  will  ensure  the  consistency  between  both 
revisions. 

On  some  issues,  passengers  that  have  acquired  the  air  transport  as  part  of  a  travel 
package  enjoy  the  protection  of  both  Regulation  261/2004  and  Directive  90/314  on 
package  travel.  These  rights  do  not  conflict:  appropriate  clarifications  already  exist  in 
Regulation 261/200431. And as the Commission  already  clarified on several occasions 
(e.g. in informal guidelines), passengers cannot enjoy double compensation under both 
pieces of legislation; to ensure clarity, this could be explicitly mentioned in the text of a 
revised Regulation. 

It  must  be  stressed  that  consistency  between  both  pieces  of  legislation  does  not 
necessarily  imply  that  "flight  only"  travellers  must  enjoy  exactly  the  same  rights  as 
"package travellers". It is rather the aim of EU law to better protect "package travellers" 
as  package  travel  involves  a  very  complex  and  atypical  contractual  relationship, 
involving  several  service  providers,  covering  longer  time  spans,  with  significant  costs 
often  pre-paid  in  advance.  Ensuring  consistency  between  both  pieces  of  legislation 

30 

31 

Council  Directive  90/314/EEC  of  13  June  1990  on  package  travel,  package  holidays  and 
package tours, OJ L 158, 23.6.1990, p.59 
For  example,  article  8(2)  of  Regulation  261/2004  excludes  passengers  from  the  right  of 
reimbursement where such right already arises under Directive 93/114. 

EN 

26 

   EN 

 
                                                 
means  avoiding  any  conflicts  of  law.  The  most  important  common  issues  where 
consistency must be ensured are the following: 

• 

• 

• 

Advance rescheduling: the Regulation is not clear at present what rights and 
obligations apply with respect to schedule changes, which would generally be 
notified in advance to passengers. In contrast, for package travel, Article 4(5) 
of  the  Package  Travel  Directive  is  clear  that  the  passenger  has  a  right  to  an 
alternative or a refund if the organiser makes a significant change to the agreed 
package. A clarification of this right in Regulation 261/2004 (as recommended 
in the present report) would clarify that "package travellers" and "flight only" 
travellers have similar rights in this respect. 

Extraordinary  events  of  long  duration:  the  revisions  of  both  pieces  of 
legislation will be coordinated in order to ensure that any limits to liability of 
operators  in  such  events  would  be  consistent  between  the  Package  Travel 
Directive,  Regulation  261/2004  and  passenger  right  regulations  for  other 
transport modes. 

Insolvency: a notable difference between "flight only" travellers and package 
travellers is the protection provided to the latter in case of insolvency of one of 
the parties performing the contract. No such protection exists for "flight only" 
travellers.  Such  protection  flows  again  from  the  underlying  principle  that  a 
better  protection  of  package  travellers  is  necessary  as  purchasing  a  package 
holiday  involves  several  service  providers  where  usually  the  one  providing 
transport  is  not  the  result  of  an  informed  choice  by  the  traveller  and  where 
bigger amounts have to be advanced than when buying only the air ticket32. 

6. 

POLICY OPTIONS 

6.1. 

Possible types of EU intervention 

The Commission has envisaged three possible interventions at EU level to address the 
problems identified above, but which were discarded at an early stage of the assessment 
for the following reasons. 

Some air carriers requested a repeal of the Regulation. Note that in such event, other 
applicable  law,  in  particular  the  Montreal  Convention  and  Directive  93/13  on  unfair 
contract  terms  would  remain  in  force  (see  annex  7,  p.  78).  A  repeal  of  Regulation 
261/2004 would lead to a substantial reduction in the level of protection of passengers' 
rights and would thus be inconsistent with the general objective of ensuring a high level 
of protection of passengers. 

The second discarded policy option is the introduction of an industry fund that would 
take charge of all expenses linked to care and compensation. Although it would present 
the advantage of breaking the link between cost and application of passenger rights in 

32 

Note that the Commission services are currently assessing possibilites to improve "flight only" 
passenger  protection  in  case  of  airline  insolvency.  For  the  moment,  non-legislative  ways  are 
being investigated; therefore a revision or the introducion of new legislation on this issue is not 
considered  as  long  as  non-regulatory  measures  have  not  been  fully  investigated  and  tested.  In 
this  context,  the  Commission  has  sought  the  views  of  Member  States'  regulatory  authorities 
which it is currently assessing in view of issuing best practice guidelines to national regulatory 
authorities.  

EN 

27 

   EN 

 
                                                 
individual cases and therefore of reducing the incentive not to comply, it also presents 
many disadvantages that appear to be outweighing its advantages: 

- an industry fund would not be able to take charge of all types of passenger rights. For 
example, rerouting can be organised the most efficiently by the airline itself; 

-  although  a  fund  could,  theoretically,  pay  out  compensation,  the  latter  would  lose  its 
incentivizing effect on the air carriers to reduce disruptions; 

- there may be difficulties in applying such fund to non-EU air carriers; 

- the administrative cost linked to such a fund would increase the total compliance cost. 

Note that in option 1 presented below, a similar idea in the form of optional insurance 
was taken up, but it was limited to care to avoid the mentioned lack of efficiency with 
regard  to  rerouting  and  compensation.  As  this  type  of  insurance  already  exists,  it  was 
assumed  that  building  on  something  already  existing  would  be  more  promising  than 
inventing a new industry fund, the setting up of which would cause additional costs. But 
the  idea  of  an  industry  fund  was  partly  taken  up  in  options  3  and  4  to  cover 
accommodation  costs  in  extraordinary  events  of  long  duration,  for  which  only  limited 
insurance coverage exists. 

The  third  discarded  policy  option  is  strict  implementation  of  the  existing,  unchanged 
Regulation  coupled  with  guidance  material  and  voluntary  commitments  from 
industry  and  enforcement  bodies.  This  policy  option  has  been  preferred  by  some 
stakeholders  (e.g.  some  air  carriers)  over  a  revision  of  the  Regulation.  However, 
existing  voluntary  agreements  with  the  air  carriers  and  between  the  NEBs33  and 
guidelines issued have not allowed lifting all the problems identified above and, coupled 
with the interpretation provided by the ECJ rulings, they do not leave much scope for 
further progress via non-regulatory measures. 

A  proposal  of  the  European  Commission  to  update  the  current  EU  regulatory 
framework  is  therefore  the  only  form  of  EU  intervention  that  could  address  all  root 
causes of the identified problems. 

6.2. 

Initial screening of the policy measures 

The  stakeholder  consultations  and  interviews  identified  a  broad  set  of  individual 
measures having the potential to address the individual drivers mentioned above.  

In  a  first  stage,  all  the  policy  measures  were  submitted  to  a  preliminary  screening, 
thereby  discarding  those  that  did  not  bring  sufficiently  high  benefits  in  comparison  to 
their  costs  and  disadvantages.  The  following  criteria  were  used  for  this  initial 
assessment: 

• 

• 

• 

Stakeholder opinion 

Legal  and  practical  compatibility  (in  particular,  the  compatibility  with 
international law) 

Effectiveness of the measure to achieve its objective 

33 
http://ec.europa.eu/transport/passengers/air/doc/neb/neb_complaint_handling_procedures.pdf  Agreement 

Agreement between NEBs: 

between airlines and NEBs: 

http://ec.europa.eu/transport/passengers/air/doc/neb/neb_airlines_procedures.pdf 

EN 

28 

   EN 

 
                                                 
• 

Complementarity with other policy measures 

The  policy  measures  have  also  been  assessed  in  light  of  the  subsidiarity  and 
proportionality principles. Annex 10 (p.105) gives an overview of the initial screening 
of  the  policy  measures;  it  also  show  the  main  positions  expressed  in  the  public 
consultation  for  each  of  the  assessed  measures..  The  most  important  (retained  and  not 
retained) policy measures are analysed in detail in annex 11 (p.124). 

The following table gives an overview of the retained policy measures. The last column 
also shows which measures are retained in which policy option. The construction of the 
policy options is explained in the next section. 

EN 

29 

   EN 

 
Table 3: retained policy measures 

policy 

Content of policy measures 

Main 
measures 

Specific 
policy 
objectiv
es 

Ensure effective and consistent enforcement of passenger rights across the EU 

  Options 

1 2
a

2
b 

3  4 

X X   X X

define 

Clearly 
extraordinary 
circumstances  

alternatives 

(2 
retained) 

Clarify 
definitio
and 
ns 
key 
principle
s, 
simplify 
rights 

1.  Clearly  define  extraordinary  circumstances  and  provide  a  non-exhaustive  list  of  such 
circumstances  in  line  with  the  strict  interpretation  provided  in  the  Wallentin  judgement 
and hence excluding many technical defaults (if such list is included in the Regulation it 
can be amended by implementing/delegated act) 

2.  Clearly  define  extraordinary  circumstances  and  provide  a  non-exhaustive  list  of  such 
circumstances but extend their scope such that most technical defaults would be covered 
by the definition (and therefore not give rise to compensation) – the definition would thus 
deviate from today's definition as interpreted by the Walletnin judgement in order to cover 
all events outside the direct control of the air carrier. 

  X  

Clarify  the  right 
of rerouting 

alternatives 

(2 
retained) 

1.  Clarification  of  today's  notion  of  "comparable  transport  conditions".  If  the  air  carrier 
cannot reroute on its own services on the same day, it must consider other carriers or other 
transport modes in so far as seats are available at reasonable cost. 

X X X X  

2 . Rerouting with other carriers or modes would have to be provided if not possible on 
own  services  within  5  hours34,  and  even  for  delayed  passengers  (at  present,  rerouting  is 
only offered for denied boarding and cancellation). 

  X

Simplify  right  to  1.  Consistent  time  thresholds  for  assistance  at  delays:  instead  of  different  thresholds 
depending  on  flight  distance  (as  today),  meals  and  refreshments  would  have  to  be 

  X X   X

34 

Which would be the same delay after which the right to reimbursement arises 

EN 

30 

EN 

 
  
 
 
 
 
 
                                                 
care 

alternatives 

(2 
retained) 

Further 
clarification 
rights 

of 

provided for delays of more than 2 hours for all flight distances and for all events (delays 
and for passengers awaiting rerouting in case of denied boarding or cancellation) 

2. Replace current rights for meals/refreshments/accomodation by an obligation imposed 
on airlines to offer passengers optional insurance to cover such care 

X  

- Missed connecting flight: clarify right to care and right to compensation 

X X X X X

-  Mobility  equipment:  inform  PRM  on  the  possibility  –  under  Montreal  –  to  make 
(without  fee)  a  declaration  of  special  interest  to  declare  the  actual  value  of  mobility 
equipment 

-  Rescheduling:  clarification  that  rescheduling  is  similar  to  cancellation/delay  if  it  is 
notified  less  than  2  weeks  before  the  initially  scheduled  time.  When  the  change  in 
schedule  is  of  more  than  x  hours  (x  is  equivalent  to  the  delay  triggering  the  right  to 
compensation  and  depends  on  the  option),  than  rerouting  must  be  offered  and 
compensation may be due. 

- Tarmac delays: clarification that Regulation applies also to delays on the tarmac: right to 
free drinking water after 1 hour, right to disembark after 5 hours35  

-  "No  show"  policy:  clarify  –  in  line  with  the  Directive  on  unfair  contract  terms  -  that 
passengers could use the return journey of a ticket even if they had not used the outward 
journey, but without a more general right with regard to the different segments within the 
inbound or outbound journeys. 

- Airports to provide basic information on passengers' rights (notices, posters) 

Ensure 
effective 
and 
consiste

1.  Better  flow  of 
information 
between  NEBs 
and Commission 

- NEBs to inform COM on their sanctioning policy 

X  

- Clarification of the role of the NEBs (sanctioning versus complaint handling) 

- Proactive policy by checking manuals and ground handling agreements 

35 

Under the current Regulation the right to renunciation and to reimbursement arises after 5 hours 

EN 

31 

EN 

 
  
 
 
 
 
 
 
                                                 
2. 
coordination 
NEBs 
by 
Commission 

Formal 
of 
the 

nt 
sanctioni
ng 
policy 

(3 
alternati
ves) 

- NEBs to inform COM on their sanctioning policy 

  X X X  

- Clarification of the role of the NEBs (sanctioning versus complaint handling) 

- Proactive policy by checking manuals and ground handling agreements 

-  Use  of  implementing  or  delegated  acts  for  decisions  over  common  interpretations  and 
common actions (comitology) 

-  Right  for  COM  to  require  investigation  by  one  or  several  NEBs  (especially  for  multi-
country cases) 

3.  Centralisation 
EU 
an 
in 
enforcement body 

- Setting up of an EU enforcement body of which NEBs would be local branches 

  X

-  The  EU  enforcement  body  would  have  the  right  of  investigating  and  of  sanctioning 
infringements  

- Proactive policy by checking manuals and ground handling agreements 

NEBs to check on 
compliance  with 
Montreal 
on 
baggage issues 

The  NEBs  (or  the  EU  enforcement  body)  would  also  ensure  the  enforcement  of  the 
provisions of the Montreal Convention and Regulation 2027/97 with regard to mishandled 
baggage; this means that they would monitor the terms and conditions of the airlines and 
sanction  where  necessary  (this  measure  only  covers  general  enforcement,  it  does  not 
include the handling or the mediation on individual complaints on baggage issues which is 
being taken care of by the EU proposal on ADR) 

X X X X X

Ensure 
effective 
complai
nt-
handling 

Definition 
minimum 
complaint 
handling 
procedures 

of 

-  Air  carriers  to  provide  information  on  complaint  handling  procedures  (e.g.  contact 
addresses, e-mail) 

X X X X X

- Maximum time periods for airlines to respond to complaints 

- Compel air carriers to recognise Property Irregularity Report (PIR) as baggage complaint 
under the Montreal Convention 

EU 
body 

centralised 
for 

The same EU body as mentioned above would centralize all passenger complaints 

  X

EN 

32 

EN 

 
  
 
 
 
 
 
 
complaint 
handling 

Clarify  exchange 
of  info  between 
ADR  and  NEB 
into 
taking 
the 
account 
ADR 
existing 
proposal  

- Building up on the new ADR Directive, the Regulation would clarify that mediation is 
the role of the ADR while NEBs concentrate on general enforcement, complaints should 
therefore  primarily  be  addressed  to  ADR  bodies  (where  NEBs  and  ADR  are  different 
bodies, the NEB will inform about the respective roles) 

X X X X X

-  The  NEBs  would  offer  their  expertise  to  the  ADR  and  investigate  complaints  where 
necessary 

-  ADR  would  provide  NEBs  with  information  on  complaints  useful  for  general 
enforcement 

Reduce disincentives for compliance 

Ensure 
that 
airlines' 
obligatio
ns  cover 
risks 
that  are 
limited 
in 
time 
and/or in 
size 

Increase 
predictability  of 
costs 
in 
exceptional 
events  of 
duration 
alternatives) 

long 
(3 

1. Obligation on airlines to offer optional insurance for care (as above) 

2. Time limit on accomodation in events of long duration (2 sub-options: 3 or 4 nights - 
with  a  maximum  amount  per  day  per  passenger).  PRM  would  not  be  impacted  by  this 
limitation. 

X  

  X X  

3.  No  limit  on  care  but  where  an  extraordinary  event  lasts  longer  than  a  predetermined 
time limit (2 sub-options: 3 or 4 nights), an industry fund would reimburse airlines within 
the limits of its finances. Such an industry fuind would be organised on a national or EU 
level and would be financed via a levy on every airline ticket. 

  X X

Reduce 

1. Obligation on airlines to offer optional insurance for care (as above) 

X  

EN 

33 

EN 

 
  
 
 
 
 
 
 
 
 
 
cost 
small-scale 
(3 

compliance 
for 
operations 
alternatives) 

Increase 
time 
for 
threshold 
compensation  for 
delay 

Adjust  lump-sum 
compensation, 
especially 
short distances 

for 

Make 
financial 
compens
ation 
less 
disincent
ivizing, 
especiall
for 
y 
long 
delays 

2.  Derogation  for  small-scale  operations  with  regard  to  accomodation  (small-scale 
operations would be defined as flights with aircraft with less than 80 seats over distances 
of less than 250 km36) 

  X X  

3. No change on care and assistance  

  X X

Instead of 3 hours, the right to compensation would arise after a delay at destination of at 
least 5 hours37 

X X  

Increase progressivity of compensation amounts from short to long distances (€75 for 0-
750km, €150 for 750-1500 km, €300 for 1500- 3500 km, €500 for more than 3500km) 38 

X 0
/
X

0
/
X

Introduc
e 
economi

all 
Involve 
players  of  the  air 
transport  chain  in 

- Airports to set up contingency plans in cooperation with airlines and other airport users 

X X X X X

- Possible recourse against third parties: national and contractual provisions cannot stand 

36 

37 

38 

80  seats  was  chosen  as  that  is  about  the  maximum  capacity  of  turboprop  aircraft  used  on  this  type  of  operations  and  250km  was  chosen  as  reference  to  short 
operations  and  establishing  a  parallel  with  the  most  recent  passenger  protection  regulation  –  regulation  181/2011  on  the  rights  of  passengers  in  bus  and  coach 
transport – which derogates routes with a distance of less than 250km. 
During  the  screening  of  individual  measures,  both  a  5-hour  threshold  and  longer  thresholds  for  long-haul  flights  were  considered.  See  section  6.3.for  more 
information and the assessment of these sub-variants. 
It is important to note that the indicated amounts have been chosen for the purpose of calculation of the impacts on airline costs and should rather be understood as 
orders  of  magnitude.  Small  variations  of  these  amounts  (e.g.  increasing  the  €75  for  short  dist ances  up  to  €100)  will  only  have  a  small  additional  impact  on  the 
estimated cost of the entire regulation for the combined option packages indicated in the assessment section and will therefore not alter the conclusions of the present 
report (this is because other measures such as an increased time threshold for compensation for delay, already significantly reduce the total amount of compensation; 
the percentages in the table 56 of annex 13 would only slightly be altered; of course only as long as the amounts are not modified too much).  

EN 

34 

EN 

 
  
 
 
 
 
 
 
 
 
                                                 
the  provision  of 
passenger rights 

in the way of claiming redress from third party responsible for disruption 

for 

c 
incentiv
es 
third 
parties 
to 
address 
disruptio
ns 

EN 

35 

EN 

 
  
6.3. 

Description of policy options 

In a second stage, the retained policy measures were packaged into policy options that 
constitute viable policy alternatives for achieving the above defined policy objectives.  

Four policy options are considered by combining the different policy measures retained 
after  the  initial  screening.  The  four  have  in  common  a  certain  number  of  policy 
measures.  What  distinguishes 
trade-off  between  stronger 
enforcement and adjusted economic incentives for airlines. As shown above, a heavier 
cost  is  an  incentive  for  airlines  for  minimising  costs  of  compliance  and  trying  not  to 
grant  passengers  their  rights.  A  stronger  sanctioning  policy  is  an  incentive  for 
compliance. Therefore, in light of the general objective of promoting the interest of air 
passengers, for options where the cost imposed by the obligations of the Regulation is 
higher, the enforcement policy must be stricter and better coordinated, and vice versa. 

the  chosen 

them 

is 

Such a selection is considered because a full focus on enforcement without addressing 
the economic disincentives would require very considerable resources to be devoted to 
the enforcement bodies. To avoid such public cost, different trade-offs are considered to 
mitigate  the  public  resources  needed  while  keeping  a  high  level  of  protection  for 
passengers. 

(1) 

(2) 

Focus  on  economic  incentives  (moderate  change  of  enforcement):  under 
option  1,  enforcement  is  better  coordinated,  mainly  via  a  better  stream  of 
information  between  the  NEBs  and  the  Commission.  The  option  mainly 
focuses  on  the  reduction  of  costs  by  replacing  some  of  the  obligations  with 
regard to care (i.e. refreshments, meals, accommodation) by the obligation for 
airlines to propose optional insurance to passengers at the moment of booking. 
Other  obligations  such  as  rerouting  are  left  under  the  responsibility  of  the 
airlines  as  an  insurance  company  could  not  organise  the  rerouting  as 
efficiently. Also compensation is left to the airlines as it plays an incentivizing 
role. This option is inspired by the opinions expressed by many airlines that a 
greater role should be given to the insurance market although this option goes 
not as far as proposing a complete replacement of the current passenger rights 
by insurance (which would be incompatible with the stated policy objectives). 

Balancing  stronger  enforcement  policy  with  economic  incentives:  under 
option  2, enforcement policy is  reinforced  via  a  strong  coordination  of  NEBs 
with  a  central  and  formal  coordinating  role  for  the  Commission.  The  option 
mainly  focuses  on  reinforcing  care  and  assistance  while  additional  costs 
flowing  from  this  are  compensated  by  adjustments  in  the  global  amount  of 
financial  compensation  to  be  paid.  Option  2  modifies  this  global  amount  by 
reducing the frequency of compensation payments via two variants: 

(a)  Either  by  increasing  the  time  threshold  after  which  the  passenger 
has a right to compensation in case of delays from the current three 
hours to at least five39; 

(b)  Or  by  extending  the  scope  of  "extraordinary  circumstances"  to 

include most technical defaults. 

39 

Note that to respect the principle if equal treatment confirmed in the Sturgeon judgement, this 
implies  an  equivalent  change  in  Article  5(1)(c)  of  the  Regulation  with  regard  to  cancellations. 
This has been taken into account in the calculations. 

EN 

36 

   EN 

 
                                                 
For  both  variants  2a  and  2b,  the  report  assesses  whether  an  additional 
adjustment of the lump-sum compensation amounts would be useful to reduce 
the  disincentives  in  specific  situations  and  to  further  focus  on  the  specific 
problems  identified  for  small-scale  operations  (stronger  progressivity  of 
amounts in function of flight distance). 

Moreover, option 2a implies an increase of the one-trigger delay threshold for 
compensation  from  the  current  three  hours  to  at  least  5  hours.  A  further 
subvariant of option 2a was assessed to determine whether a further fine-tuning 
of  this  option  could  add  value.  The  subvariant  implies  multiple  delay 
thresholds for compensation depending on the flight distance: 5 hrs for flights 
shorter  than  1500km,  9  hrs  for  1500-3500km  and  12  hrs  beyond  3500km40. 
This subvariant was tested in order to take into account the practical difficulties 
of long-haul flights to deal with delays (e.g. time needed to fly in spare parts or 
replacement aircraft). At the same time, there is a rationale of proportionality in 
linking  the  compensation  to  the  duration/distance  of  the  flight  as  long  delays 
appear to be more frequent for long-haul flights than for short-haul flights. 

Option  2  is  a  mix  of  policy  measures  including  elements  from  various 
stakeholder groups. The stronger enforcement policy and the clarification of a 
certain number of rights is backed by consumer groups. Airlines are opposed to 
the  compensation  in  case  of  long  delay  but  it  was  included  in  this  option  to 
avoid  a  weakening  of  passenger  rights  contrary  to  the  policy  objectives; 
therefore it was rather considered how the parameters of compensation in case 
of long delay could be modified to take into account the financial concerns of 
the  airlines.  Finally,  a  time  limit  on  the  liability  of  airlines  in  cases  of 
extraordinary events of long duration is clearly an airline request (we consider 
two sub-options: a limit of 3 days or 4 days), but its impact on passengers is 
being mitigated by accompanying measures such as a quicker rerouting or the 
introduction of contingency planning. 

Focus on enforcement: option 3 entirely focusses on stronger enforcement and 
clarifies  existing  passenger  rights  to  render  their  application  more  effective. 
The compliance cost is not expected to decrease under this option, but it adds a 
measure  where  air  carriers  must  designate  a  responsible  for  each  airport  that 
would have the power to take decisions with regard to care and compensation. 
Such an obligation of means would be easy to check by the enforcement bodies 
and is expected to ensure a better application of passenger rights "on the spot". 

Option 3 is inspired from those elements of the EP resolution mentioned above 
(page 11) which refer to Regulation 261/2004 or to baggage issues. However, 
the  EP  resolution  could  not  be  translated  directly  into  a  policy  option  as  its 
elements did not respond to all the policy objectives set in the present impact 
assessment.  Therefore,  a  number  of  elements  were  added  to  ensure  that  the 
option would stand as a full policy alternative in view of the set objectives (e.g. 
the common elements mentioned in table 4, but also an industry fund to tackle 
the  problem  of  unlimited  liability  in  extraordinary  events  of  long  duration). 

(3) 

40 

This subvariant has been taken as an example for calculation purposes. Other possibilities exist, 
such  as  a  double  threshold,  distinguishing  only  short-haul  flights  and  long-haul  flights  (e.g.  5 
hours for the first and 12 hours for the latter). 

EN 

37 

   EN 

 
                                                 
Furthermore, while the EP resolution calls for an inclusion of compensation for 
long delays into the text of the Regulation, it remains vague with regard to the 
time threshold that would apply and only refers to the need to take into account 
that  such  compensation  could  trigger  more  cancellations.  In  option  3,  the 
judgements  of  the  Court  in  the  cases  Sturgeon  (compensation  for  long  delay) 
and  Wallentin  (technical  defaults)  are  integrated  as  such  into  the  Regulation. 
Note  that  a  policy  measure  that  would  introduce  a  compensation  for  delayed 
baggage was discarded because of its likely incompatibility with the Montreal 
Convention (see annex 10, on p.122). 

(4) 

Centralised  enforcement:  option  4  entirely  focuses  on  a  powerful  and 
centralised  enforcement  policy  which  must  counteract  the  negative  incentives 
from the compliance cost: a central EU enforcement body is therefore part of 
this option. Like option 3, option 4 also introduces the principle of an industry 
fund to ensure continued care in cases of mass disruption41. 

Option  4  is  inspired  from  the  contributions  of  consumer  groups  to  the  public 
consultation: centralised enforcement and an obligation of rerouting in case of 
long  delays  were  requests  by  some  consumer  groups  and  are  therefore 
integrated  into  this  option.  Note,  however,  that  an  obligation  to  have  airline 
representatives  in  every  airport  as  in  option  3  is  not  included  in  this  option 
because, under this option, enforcement is directly ensured by a centralised and 
stringent sanctioning policy. 

As a number of alternative policy measures were discarded already in the preliminary 
screening, the policy options have some common features such as: 

• 

• 

• 

• 

41 

the  clarification of  a number  of issues (e.g. rerouting obligations, care during 
tarmac delays, passenger rights for missed connections, etc.); 

better  claim  and  complaint  handling  by  both,  the  air  carriers  and  the  national 
bodies  in  charge  of  individual  complaints  (information  to  be  provided  on 
complaint-handling  procedures;  maximum  time  periods  for  airlines  and  such 
bodies  to  respond  to  claims  and  complaints;  coordination  and  cooperation 
between NEBs and future ADR bodies under the new ADR Directive); 

involvement  of  other  market  players:  enhanced  possibility  for  recourse  of 
airlines  against  third  parties  responsible  for  disruptions;  setting  up  of 
contingency plans among airport users). 

Note that option 1 does not include a specific measure to address the problems 
of regional carriers as the replacement of care obligations by optional insurance 
would  already  tackle  one  of  the  main  problems  of  regional  carriers  in  this 
context  (i.e.  the  provision  of  accommodation).  Option  2  includes  derogation 
from  the  accommodation  obligation  with  regard  to  operations  on  short  routes 
with small aircraft. Options 3 and 4 do not include a specific measure for this 

The  industry  fund  would  be  organised  on  Member  State  level  or  on  EU  level.  It  would  be 
financed via a levy on every airline ticket. It is assumed that the fund would gradually build up 
the necessary resources to carry the costs of an "ash cloud" similar event, from the third or fourth 
day of the event. It would intervene in function of the resources available at the time of the event 
(hence,  there  is  no  guarantee  that  it  would  cover  the  full  costs  of  the  airlines  for  the  period 
beyond the three or four days). 

EN 

38 

   EN 

 
                                                 
kind of operations as those options mainly focus on the enforcement of existing 
rights. 

EN 

39 

   EN 

 
Table 4: overview of main differences between the policy options 

Option 1 

Option 2a 

Option 2b 

Option 3 

Option 4 

Improved 
enforceme
nt 

"Light" 
coordination 

"Medium" coordination 

"Strong" 
coordinatio
n 

"Medium" 
coordination 
+ 
stronger 
enforcement 
via obligation 
of means 

How? 

-  Better  flow  of 
information 
between  NEBs 
and Commission 

-  clear  distinction 
between  general 
enforcement  and 
complaint 
handling  –  NEBs 
to  support  ADR 
for the latter 

and 

Formal 
coordination 
Commission: 

centralised 
via 

In  addition  to 
option 2: 

each 

Obligation 
for  airlines  to 
have 
a 
representativ
e 
in 
airport 
competent for 
taking 
decisions 
with 
regard 
to  care  and 
compensation 

take 
-  Commission  can 
initiative 
request 
to 
investigations  by  NEBs  or 
to 
common 
coordinate 
action of several NEBs 

-  A  formal  committee  can 
decide 
common 
on 
procedures  (e.g.  transfer  of 
complaints,  exchange  of 
information, etc.) 

-  clear  distinction  between 
general  enforcement  and 
complaint  handling  –  NEBs 
to  support  ADR  body  for 
the latter 

EU 
enforcement 
body: 

NEBs 
- 
would 
be 
subsidiaries 
of 
the 
central body

clear 

- 
distinction 
between 
general 
enforcement 
and 
complaint 
handling  – 
EB 
to 
support 
ADR for the 
latter 

Economic 
(dis)incen
tives 

Care 

Low cost 

Medium cost 

High cost 

High cost 

- 
insurance 
passengers 

Optional 
for 

limit 

on 
Time 
- 
accommodation 
in 
extraordinary events of long 
duration42 

-  Partial  derogation 

for 

Industry 
- 
fund 
for 
extraordinary 
of 
events 
long duration  

Industry 
- 
fund 
for 
extraordinar
y  events  of 
long 
duration  

42 

In practice, this time limit can be implemented in various ways. One possibility is to introduce a 
new definition in the Regulation that would define the type of rare events to which the time limit 
would apply (e.g. max 3 or 4 nights in mass disruptions). Another possibility would be to define 
a  time  limit  for  accommodation  for  all  extraordinary  circumstances,  which  would  avoid 
introducing  a  new  definition,  especially  in  option  2a  where  extraordinary  circumstances  are 
anyway already defined in a restrictive way (Wallentin). . 

EN 

40 

   EN 

 
 
                                                 
small-scale operations 

of 

Right 
compensati
on for delay 
more 
of 
than 
3 
hours 

Right 
of 
compensation 
for  delay  of 
more  than  3 
hours 

of 

Right 
compensati
on for delay 
more 
of 
than 
3 
hours 

Compensa
tion 
payments 

Right 
of 
compensation  for 
delay  of  more 
than 5 hours  

Right 
of 
compensation 
for  delay  of 
more  than  5 
hours 

a 

longer 

(and 
subvariant 
with 
delays 
depending  on 
flight 
distance) 

of 

in 
with 

Definition 
extraordinary 
circumstances 
line 
Wallentin 
judgement 

Definition  of 
extraordinary 
circumstance
s  in  line  with 
Wallentin 
judgement 

Larger 
scope 
for 
extraordinar
y 
circumstanc
es 

Definition  of 
extraordinary 
circumstance
s  in  line  with 
Wallentin 
judgement 

Unchanged 
lump-sum 
amounts 
for 
compensation 

lump-
Reduced 
sum  amounts  of 
compensation 
with 
short distances 

focus  on 

sub-
Two 
variants:  with 
or 
without 
reduced 
lump-sum 
amounts 
of 
compensation 
with focus on 
short 
distances 

or 

sub-

Two 
variants: 
with 
without 
reduced 
lump-sum 
amounts  of 
compensati
on 
focus 
short 
distances 

with 
on 

Definition 
of 
extraordinar
y 
circumstanc
es 
line 
in 
with 
Wallentin 
judgement 

Unchanged 
lump-sum 
amounts  for 
compensati
on 

Common 
features 

-  Clarification  of  rights  for  missed  connecting  flights,  advance  rescheduling, 
mobility equipment, tarmac delays and "no show" policy 

- Enforcement body for existing rights in case of mishandled baggage 

- Minimum claim handling procedures for airlines  

- Sharing of the compliance cost with third parties 

The  full  details  of  the  policy  options  can  be  read  from  table  3  and  from  the  table  in 
annex 10 (p. 105). 

EN 

41 

   EN 

 
7. 

ANALYSIS OF IMPACTS 

The analysis of the impacts has been divided into: 

•  Economic impacts; 

•  Social impacts; 

•  Environmental impacts. 

The  assessment  of  impacts  is  supported  by  quantitative  data  provided  by  the  external 
study  and/or  by  academic  research  where  necessary.  Annexes  8a  and  8b  provide  a 
detailed  description  of  the  underlying  assumptions  of  the  external  study.  Given  the 
strong  focus  on  enforcement  and  more  appropriate  cost  recovery  mechanisms  for 
airlines, the core impacts of this initiative are economic  and social (consumer impact) 
while  environmental  impacts  are  mostly  indirect  and  sometimes  negligible.  Summary 
tables of the assessment of impacts are presented throughout this section. 

7.1. 

Economic impacts 

7.1.1. 

Impact on enforcement 

a. Enforcement policy 

The options differ with regard to the level of coordination between national enforcement 
policies: 

In option 1, a better stream of information from the NEBs to the Commission on their 
enforcement actions is very useful to fulfil its monitoring and coordinating role; reports 
by the NEBs give the Commission a direct insight into the activities of the NEBs and 
allows it to take action when NEBs fail to fulfil their obligations or when NEB actions 
need coordination. 

In  options  2  and  3,  in  addition  to  the  above,  consistency  between  the  enforcement 
policies of the various Member States would be improved as the room for interpretation 
of the existing rules is reduced thanks to their clarification (see below) and thanks to a 
stronger  coordination  between  NEBs  via  a  formal  coordinating  role  for  the 
Commission and a formalisation of the existing network of NEBs which could then take 
binding  decisions  in  the  context  of  implementing  acts  ("comitology")43.  Divergent 
interpretations between NEBs can more easily be prevented. 

In addition, option 3 includes an obligation for airlines to designate a representative in 
every  airport  served  by  the  airline,  who  would  be  entitled  to  take  the  necessary 
decisions  with  regard  to  care  and  assistance.  The  measure  was  strongly  supported  by 
consumer groups, airports and NEBs, but opposed by airlines. A major advantage is that 
compliance with this obligation would be relatively easy to check by the NEBs and the 
presence of such entitled person increases the chances that passengers receive the rights 
to  which  they  are  entitled  (indeed,  a  frequent  passenger  complaint  is  that  they  cannot 
find  an  airline  contact  when  stranded  in  an  airport).  However,  the  measure  has  some 
drawbacks: 

-  it  is  a  rather  costly  measure  (estimated  at  €340  million  NPV);  indeed,  given  the 
financial significance of the decisions they would be making, the staff would probably 
need  to  be  better  qualified  and  hence  better  paid  and  trained  than  standard  passenger 

43 

For example a non-exhaustive list of extraordinary circumstances.  

EN 

42 

   EN 

 
                                                 
service  staff.  The  relative  cost  of  such  staff  would  be  higher  at  airports  served  at  low 
frequencies  by  the  air  carriers  and  could  therefore  have  a  more  significant  impact  on 
regional carriers and low-cost carriers; 

- as it is an obligation of means, it is not guaranteed that compliance with this measure 
would  indeed  automatically  imply  better  compliance  with  the  obligations  of  care  and 
assistance, thereby raising some doubts as to the cost efficiency of such a measure. 

In option 4, a central EU enforcement body of which the NEBs would only be the local 
antennas, would interpret and enforce EU law in the most consistent and uniform way 
across the EU. It would achieve operational efficiencies, as there would be no need to 
forward complaints or seek coordination between NEBs. 

There  are  also  common  elements  among  the  policy  options.  In  all  options, 
enforcement  policy  would  be  clearly  distinguished  from  complaint  handling,  NEBs 
would  focus  on  general  enforcement  and  would  take  a  more  pro-active  role  by 
checking airlines’ manuals, terms and conditions and contingency plans for compliance 
with  Regulation  261/200444.  Some  NEBs  already  do  this,  but  introducing  this 
requirement at EU level would be  useful for those  NEBs that do not already have  the 
power  to  request  such  documents,  or  where  they  only  have  this  power  in  relation  to 
intra-Community infringements. 

For the air carriers, such a pro-active role would require airlines to put in place and then 
follow procedures which are sufficient to ensure that they comply with the Regulation 
effectively and  consistently, including  during  periods  of  major  disruption.  On  request, 
airlines would have to provide these procedures, evidence that they followed them, and 
all other information necessary to the NEB. This measure could have a beneficial effect 
on  the  resources  that  airlines  and  NEBs  currently  spend  on  the  investigation  of 
individual  complaints.  Indeed,  enforcement  at  present  consists  almost  entirely  of 
investigation  and  (potentially)  sanctioning  of  individual  incidents.  The  Regulation  is 
inherently  difficult  to  enforce  through  investigation  of  individual  incidents,  because  it 
creates  obligations  in  respect  of  approximately  40,000  passengers  on  700  flights  each 
day  at  airports  across  the  EU  and  beyond.  It  is  very  difficult  for  NEBs  to  ensure 
compliance in respect of each of these cases, and it is difficult to determine definitively 
on  the  basis  of  individual  incidents  that  an  airline  has  non-compliant  or  insufficient 
operational procedures in place, or a policy of consistent non-compliance. 

In  this  context,  a  more  pro-active  approach  towards  enforcement  would  be  more 
efficient in terms of resources used as it would be directly addressing the source of the 
problem  and  could  therefore  reduce  the  quantity  of  individual  complaints  to  be 
investigated. 

Furthermore,  the  measures  with  regard  to  complaint  handling  and  clarification  are 
expected to reduce the number of complaints and disputes and therefore further reduce 
the  cost  of  enforcement  policies.  Unfortunately,  while  the  administrative  cost  of  the 
new missions can be estimated (see section 7.2.6), the cost savings from this expected 
reduction in complaints and enforcement actions cannot be estimated although it could 

44 

Note that the proposed requirements with respect to procedures and contingency plans would be 
consistent  with  and  complementary  to  the  requirements  for  minimum  quality  standards  and 
contingency plans in the already proposed Regulation on ground handling services - proposal for 
a Regulation of the European Parliament and the Council on ground handling services at Union 
airports and repealing Directive 96/67/EC, COM (2011) 824 

EN 

43 

   EN 

 
                                                 
be expected that – given the moderate administrative costs – the cost savings would be 
bigger than the new costs. 

Another common feature of all options is that a new and similar monitoring role with 
regard to mishandled baggage is introduced where NEBs would check that terms and 
conditions  and  information  by  airlines  are  consistent  with  the  requirements  of  the 
Montreal  Convention  and  of  Regulation  2027/97  with  regard  to  mishandled  baggage. 
Although,  in  the  retained  policy  options,  the  NEBs  would  not  engage  in  complaint 
handling,  information  provided  by  ADR  bodies  could  be  used  to  detect  possible 
recurrent infringements of baggage rules. 

Note, however, that some consumer groups have called for the NEBs also to look into 
individual complaints on baggage. Such measure was not retained in the policy options 
because of its significant cost impact on NEBs, which is unrealistic to expect especially 
in  the  present  economic  context  where  budgetary  restraints  are  unlikely  to  lead  to 
substantial increases in the NEBs' resources (indeed, the measure could increase NEB 
costs by more than 50% on average) and because most of the complaint handling would 
be shifted to the future ADR bodies anyway. 

A focus on general enforcement by NEBs and a pro-active approach could also have an 
impact on the working of Regulation 2006/2004 on consumer protection cooperation 
(CPC)45. Currently, NEBs act mainly with regard to individual complaints concerning 
incidents  under  their  jurisdiction  (by  airlines  of  any  nationality).  The  CPC  system  is 
devised  for  cross-border  cases  of  unlawful  practices  harming  collective  consumer 
interests  and  not  for  individual  complaints.  In  the  context  of  the  review  of  the 
Regulation  2006/2004,  the  relevance  of  the  CPC  system  for  the  cross-border 
enforcement of the Regulation 261/2004 is being assessed. If a more pro-active policy is 
adopted, it needs to be analysed what coordination may be necessary between the CPC 
system and a formalised network of NEBs (note that in most Member States the NEBs 
were designated as enforcement authorities under the CPC system, but not in all). 

b. Clarification and simplification of rights 

In all policy options, existing rights for air passengers are clarified. The most impact is 
expected  from  the  clarification  of  the  notion  of  extraordinary  circumstances,  via  a 
more precise definition. Reducing the room for interpretation will significantly reduce 
the  disputes  between  airlines  and  passengers  and  should  reduce  the  number  of 
complaints (with a positive effect on the cost of enforcement). It will also reduce legal 
costs for airlines and passengers. 

Further  clarifications  of  rights,  with  regard  to  connecting  points,  tarmac  delays,  flight 
diversions,  advance  rescheduling,  “no  show”  policy,  booking  errors  and  mishandled 
mobility  equipment  reinforce  passengers’  rights  and  simplify  their  enforcement  (see 
also annex 11, p.124). 

Under options 2 and 4, the rights are further simplified by the measure implying that 
care in the form of meals and refreshments always be provided after a delay of two 
hours, irrespective of the flight distance and the origin of the traveller’s delay. Indeed, 
present  rules  where  this  care  has  to  be  provided  immediately  (denied  boarding  and 

45 

the  Council  of 
Regulation  (EC)  No 2006/2004  of 
27 October 2004 on cooperation between national authorities responsible for the enforcement of 
consumer protection laws, OJ L 364, 9.12.2004, p. 1 

the  European  Parliament  and  of 

EN 

44 

   EN 

 
                                                 
cancellation)  or  after  two,  three  or  four  hours  depending  on  flight  distance  are  very 
confusing for the passenger and for airline staff46. 

Under  option  2a,  there  is  a  further  simplification  for  long  delays  as  the  right  for 
compensation  would  arise  after  5  hours  which  is  the  same  delay  as  the  right  to 
reimbursement.  This  way,  instead  of  multiple  delay  thresholds,  the  passenger  would 
have to know only two thresholds: 2 hours for care and 5 hours for reimbursement and 
compensation. However, this simplification advantage would be lost in the sub-variant 
of  option  2a  in  which  there  would  be  multiple  thresholds  for  delay  compensation 
depending on the flight distance (5, 9 or 12 hours). 

c. Complaint handling 

A  common  feature  of  all  options  is  that  passengers  will  find  it  easier  to  introduce 
complaints  to  the  airlines  as  the  information  on  contact  addresses  and  complaint 
handling  procedures  will  be  improved  and  airlines  will  provide  replies  within  a  clear 
timeframe.  The  difference  between  general  enforcement  (sanctioning)  and  complaint 
handling will be clarified for passengers. The respective roles of NEBs in enforcement 
and  of  ADR  bodies  (under  the  new  ADR  Directive)  in  individual  complaint  handling 
will be clarified so that passengers know what to expect from these bodies. Complaints 
should as far as possible be submitted to the ADR body; where the NEB and the ADR 
are two different bodies, the NEB would inform the passenger about the ADR and its 
role.  NEBs  will  use  information  on  complaints  provided  by  the  ADR  bodies  in  their 
enforcement  policy,  while  ADR  bodies  can  make  use  of  the  aviation  expertise  of  the 
NEBs. 

Under option 4, in addition to the above, there would be one single enforcement body 
to which passengers can complain. The EU enforcement body would then allocate the 
complaints  (or  the  requests  from  the  ADR  bodies)  to  the  most  appropriate  national 
branch (taking into account for example the language of the complaint and the place of 
the  incident),  thereby  ensuring  a  more  effective  allocation  of  the  requests  to  the  most 
appropriate body. 

An  important  impact  of  better  enforcement  and  complaint  handling  is  the  likely 
increase  of  the  claim  rate  for  compensations  in  cases  of  delay  and  cancellation.  If 
passengers are better aware of their rights (note that the information obligations would 
also  be  better  enforced)  and  if  better  enforcement  makes  them  more  confident  that 
airlines will meet their claims (when justified) then a greater proportion of passengers 
would claim the compensation in the cases where this right arises. This has a significant 
impact on the compliance cost as will be shown in the next section. 

46 

Option  3  does  not  include  this  simplification:  the  option  was  inspired  from  the  EP  resolution 
which makes no reference to such a unified 2-hour threshold for care 

EN 

45 

   EN 

 
                                                 
Table 5: summary table of impacts on enforcement 

Option 
1 

Option 
2a 

Option 
2b 

Option 
3 

Option 
4 

Impacts  on  enforcement 
policy 

Impacts 
on 
clarification/simplifaction 

Impacts  on  complaint 
handling 

+ 

+ 

+ 

++ 

++ 

++ 

+++ 

+/++47 

++ 

+ 

+ 

+ 

+ 

++ 

++ 

"-" means less than baseline – "+" means better than baseline 

7.1.2. 

Impact on compliance cost 

To  evaluate  the  compliance  cost  under  the  baseline  and  under  the  policy  options,  the 
consultant has  developed  a  quantitative  model. This model  was based on the  database 
for flight disruptions and disaggregated by type of airline and route in order to measure 
the  impact  of  various  policy  options  on  the  compliance  costs  of  the  different  airline 
types. More information on the used model and the underlying assumptions is given in 
annex 15 (p.152). 

The  compliance  cost  under  the  policy  options  is  compared  with  the  cost  under  the 
baseline  scenario.  To  this  end,  the  compliance  cost  was  first  estimated  under  the 
baseline scenario, based on the asssumptions and the methodology explained in annexes 
8 (p. 81) and 15 (page 152). A net present value (NPV) of the compliance cost over the 
period  2015-2025  was  first  calculated.  The  policy  measures  are  then  assumed  to  be 
implemented with effect from 1 January 2015, and the NPV of the compliance cost is 
then calculated for the same period 2015-2025. 

Most proposed measures, such as clarification of rights, have a very limited cost impact. 
The  calculations  have  shown  that  a  limited  number  of  the  measures  contained  in  the 
policy options explain most of the cost impact: these are changes to the time thresholds 
for care, modifications of the scope of "extraordinary circumstances", modifications of 
the time threshold for compensation for long delays, modifications in the compensation 
levels,  derogations  for  care  (limited  liability  in  extraordinary  events  of  long  duration 
and small-scale operations) and optional insurance in place of care. 

Table  6  compares  the  NPV  of  the  compliance  costs  for  the  airlines  over  the  period 
2015-2025  for  the  different  policy  options  (detailed  data  for  the  various  types  of  air 
carriers are provided in annex 13). Given the uncertainty surrounding the evolution of 
the claim rate for financial compensation, the results are first shown for a claim rate that 
is kept constant between the baseline and the policy options in order to show how the 
options modify the theoretical cost of the Regulation. The table shows results for a low 
claim rate (the current claim rate of 10% which is assumed to increase only slowly at a 

47 

A subvariant that introduces multiple delay thresholds for compensation would add complexity 
to the Regulation and take away a part of the simplification gain. 

EN 

46 

   EN 

 
 
 
 
 
 
 
                                                 
rate of 0.5% per year) and for the maximum claim rate (i.e. when all entitled passengers 
would claim their compensation). 

Table 6: Impact on total cost of Regulation for airlines at constant claim rate 

Impact of the full policy packages 
compared to the baseline scenario 

Total cost at current claim 
rate  (assumed  to  increase 
slowly over time) 

NPV  (2015-
2025) 

In € million 

% change 

compared 
to 
baseline 

Theoretical maximum cost of 
Regulation  (if  all  entitled 
passengers 
claim 
compensation) 

NPV  (2015-
2025) 

In € million 

% change 

compared  to 
baseline 

Baseline 

Option 1 

Option 2a 

Unchanged 
compensation levels 

Adjusted 
compensation levels 

Option 2b 

Unchanged 
compensation levels 

Adjusted 
compensation levels 

Option 3 

Option 4 

10.4 

2.1 

9.8 

9.1 

9.6 

8.9 

11.3 

11.6 

- 

-80% 

-6% 

23.6 

8.0 

18.4 

- 

-66% 

-22% 

-13% 

15.1 

-36% 

-8% 

17.5 

-26% 

-14% 

14.2 

-40% 

+9% 

+12% 

26.0 

26.2 

+10% 

+11% 

As these estimates are sensitive to the underlying assumptions, a number of sensitivity 
tests  were  carried  out.  These  tests  have  shown  that  variations  in  the  underlying 
assumptions  do  not  modify  the  ranking  of  the  options  in  terms  of  their  quantitative 
impact  and  that  the  order  of  magnitude  of  the  options'  impacts  is  not  significantly 
alterered. More information on these sensitivity texts can be found in annex 15 (p. 152).  

As expected, option 1 implies the strongest cost reduction as refreshments, meals and 
accommodation are the main cost drivers of the Regulation (about two thirds of the total 
cost); their replacement by optional insurance for the passengers therefore significantly 
reduces the total cost of the Regulation48. 

48 

As option 1 mainly impacts  on the cost of care and assistance (which is not influenced by the 
claim rate for compensation), the cost reduction from option 1 is less under the 100% claim rate 
than under the current claim rate. Indeed, under the 100% claim rate the share of compensation 
in  the  total  cost  is  higher  and  therefore  cost  reductions  on  care  and  assistance  will  have  less 
impact on total cost that under the current claim rate where care and assistance is the main cost 
factor. 

EN 

47 

   EN 

 
 
 
                                                 
Option  2  has  a  more  moderate  impact  (it  is  very  similar  for  options  2a  and  2b),  but 
annex 13 (p. 139) shows that is has a more pronounced impact on the regional carriers 
than on other carriers. This is due to the derogation for accommodation for the smallest 
regional  operations.  Note  that  the  adjustment  of  the  lump-sum  amounts  for 
compensation  has  a  limited  additional  impact  on  costs  as  the  overall  amount  spent  on 
compensation is already reduced by the increase of the delay threshold or the extended 
scope  of  extraordinary  circumstances.  Still,  it  would  add  a  further  reduction  to  the 
compliance cost, especially for network carriers (see annex 13, p. 139). 

Table  7  looks  more  closely  at  the  sub-variants  of  option  2a,  where  instead  of  a  5h 
threshold  for  delay  compensation,  there  would  be  multiple  thresholds:  5  hours  for 
flights up to 1500 km, 9 hours for flights between 1500 and 3500 km and 12 hours for 
flights  of  more  than  3500  km.  Overall,  the  table  shows  that  such  a  sub-variant  would 
significantly reduce the compliance cost especially for higher claim rates. More detailed 
results per carrier type are provided in annex 13; they show that in comparison to the 
single 5-hour threshold, the multiple thresholds would mainly benefit carriers operating 
long-haul  flights,  i.e.  charter  carriers  and  network  carriers  (non-EU  carriers  appear 
among  the  main  beneficiaries  of  such  a  sub-variant  as  they  mainly  operate  long-haul 
flights from the EU). 

Note  that  the  subvariant  presents  the  advantage  that  it  might  create  an  additional 
incentive to reduce delays. As 5 hours could always be too short to deal with technical 
problems  on  long-haul  destinations  and  compensation  would  then  always  be  due,  the 
compensation would not present an incentive. But setting more realistic time thresholds 
within which the airlines could indeed remedy the problem might create an incentive to 
do so as quickly as possible in order to avoid the compensation payment. 

EN 

48 

   EN 

 
Table 7: Impact on total cost of sub-variants of option 2a 

Impact of the full policy packages 
compared to the baseline scenario 

Total cost at current claim 
rate  (assumed  to  increase 
slowly over time) 

NPV  (2015-
2025) 

In € million 

% change 

compared 
to 
baseline 

Theoretical maximum cost of 
Regulation  (if  all  entitled 
claim 
passengers 
compensation) 

NPV  (2015-
2025) 

In € million 

% change 

compared  to 
baseline 

Baseline 

Option  2a  with 
unchanged 
compensation 
levels 

Option  2a  with 
adjusted 
compensation 
levels 

threshold 
delay 

5h 
for 
compensation 

5-9-12h 
thresholds  for 
delay 
compensation 

threshold 
delay 

5h 
for 
compensation 

5-9-12h 
thresholds  for 
delay 
compensation 

10.4 

9.8 

- 

-6% 

23.6 

18.4 

- 

-22% 

9.4 

-10% 

15.8 

-33% 

9.0 

-13% 

15.1 

-36% 

8.9 

-14% 

13.2 

-44% 

Source: Commission estimates based on SDG data 

Note that the tables in annex 13 (po.139) - which give the results of these estimations by 
carrier  type  -show  that  the  total  effect  of  policy  option  2  is  especially  strong  for  the 
regional carriers, because of the effect of the derogation from accommodation for the 
small-scale  operations.  Compliance  cost  would  be  reduced  by  about  40%  for  these 
carriers  (note  that  this  brings  the  absolute  cost  per  passenger  for  the  regional  carriers 
close to the average for the other carrier types). As mentioned before, options 3 and 4 do 
not address the specific situation of regional carriers. 

Under options 3 and 4, air carriers would experience cost increases the scale of which 
depends on the weight of financial compensation in their total compliance costs. 

Tables  6  and  7  were  estimated  under  the  assumption  of  no  significant  changes  in  the 
claim rate for compensation. However, as we noted before, the claim rate is likely to 
increase  thanks  to  the  better  enforcement  of  passenger  rights.  If,  in  table  6,  we 
compared  the  baseline  cost  at  the  current  claim  rate  (i.e.  €  10.4  million)  with  the 
estimates under the 100% claim rate, we could be looking at the theoretical maximum 
cost increase that an increasing claim rate could trigger:  if the claim rate went up  to 
100%,  costs  would  more  than  double  under  the  baseline  (from  €10.4  million  to  €23.6 
million)  and  increase  even  more  under  options  3  and  4  (from  €  10.4  million  to  €26 

EN 

49 

   EN 

 
 
million), but option 2 would limit the increase (from €10.4 million  to max €18.4 million) 
while option 1 would decrease the compliance costs (from €10.4 million to € 8 million). 

Such an increase of the claim rate to 100% seems unrealistic; therefore we talk about a 
theoretical  maximum.  Note,  however,  that  if  compensation  were  made  automatic 
(instead of the passenger having to claim it), these costs increases would no longer be 
theoretical.  Given  the  high  cost  of  such  automatic  compensation,  an  automatic 
compensation was not considered in the policy options as it would fail to address our 
policy objectives. 

For better understanding, tables 6 and 7 and the annex 13 (p. 139) can be summarized as 
follows in an approximative but illustrative way: 

• 

• 

• 

• 

The  average  cost  of  the  current  Regulation  in  a  "regular"  year  (i.e.  without 
major  extraordinary  events)49  is  approximately  between  €1  and  €3  per 
passenger, depending on the claim rate; but it may take unlimited proportions 
in  extraordinary  events  of  long  duration  and  weighs  very  heavy  on  small 
regional carriers. 

Under option 1, this cost would be approximately between €0.20 and €0.75; an 
extraordinary  event  of  long  duration  would  have  very  limited  impact;  costs 
would remain similar for regional carriers. 

Under  option  2  (and  its  variants  and  sub-variants),  this  cost  would  be 
limit  on  cost  developments  in  an 
approximately  between  €1  and  €2,  with  a 
extraordinary  event  of  long  duration;  the  cost  for  regional  carriers  would  be 
within the same bracket. 

Under  options  3  and  4,  the  cost  would  be  approximately  between  €1.20  and 
€3.20, with a limitation on cost developments  in an extraordinary event of long 
duration (but only as long as the industry fund has enough resources); the cost 
for regional carriers would remain very high in proportion to their revenues. 

Tables  6  and  7  show  the  compliance  cost  in  "regular  "years,  i.e.  years  without  major 
events.  In  order  to  measure  the  impact  of  the  time  limit  on  accommodation  in 
extraordinary events of long duration, we tested such a limit on the cost calculations 
for the ash cloud crisis in April 2010. For the purposes of the calculation we looked at a 
limit on accommodation of 3 or 4 days with a maximum of €100 per passenger. If an 
exceptional event equivalent in scale to the volcanic ash crisis occurred again, option 1 
would strongly limit any costs as there is no obligation for accommodation under that 
option.  Options  2,  3  and  4  would  reduce  the  assistance  costs  incurred  by  airlines  by 
about 40% with a 3-day cap and by about 20% with a 4-day cap (under the assumption 
that, in options 3 and 4, the industry fund would have enough resources when the event 
occurs). Most importantly, it would put a clear time limit on these costs: their level 
would remain approximately the same even if the crisis would last longer. On the basis 
of information obtained from airports, which indicates that PRMs account for 0.44% of 
passengers, excluding PRMs from the application of the cap would only have a minor 
impact  on  the  costs  while  keeping  a  maximum  protection  for  the  most  vulnerable 
passengers. 

49 

We used the average disruption rates for the period 2007-2009 

EN 

50 

   EN 

 
                                                 
Note, however, that options 3 and 4 imply the payment of a contribution per passenger 
to the industry fund which weighs on the compliance cost in normal times (and which is 
included in tables 6 and 7). If we assume that the reserve fund would build up reserves 
needed  for  a  "ash  cloud"  type  event  over  a period  of  10  years,  then  the  cost  could  be 
estimated at €0.06 per passenger 50. 

The four options also imply a cost for airports as they contain two measures that impact 
airports:  the  obligation  for  airports  to  provide  some  basic  information  to  passengers 
(notices  on  passenger  rights)  and  the  obligation  to  prepare  contingency  plans  in 
cooperation  with  the  airport  users.  The  cost  of  these  measures  has  been  estimated  as 
quite  modest  (around  €200  000  per  year  for  all  airports  combined  –  see  annex  12). 
However,  airports  and  other  third  parties  (such  as  ground  handlers  or  air  navigation 
services)  could  share  a  part  of  the  above-mentioned  airline  costs  as  the  three  options 
give airlines enhanced possibilities to claim compensation for incurred costs from third 
parties which were responsible for delays or cancellations. 

"Recourse against third parties": the maximum potential for recovery is about 30% 
of the costs of the Regulation51, i.e. if airlines are willing to exploit this new possibility. 
But  it  must  be  underlined  that  since  many  airports  and  ANSPs  operate  on  a  cost-
recovery basis, one consequence of such a change would be to increase charges to the 
airlines. Therefore this would not necessarily result in a reduction in the economic cost 
on airlines, especially if there would be increased legal costs linked to disputes between 
airlines and third parties over the responsibility for certain flight disruptions. Ultimately, 
most industry costs must be covered by the fares paid by passengers to airlines, part of 
which  cover  airport  and  ANSP  charges.  Note,  however,  that  charges  on  airlines  and 
their passengers are not the only sources of revenue of the airports. 

Although  such  a  regulatory  change  might  lead  to  higher  airport  and  ANSP  charges, 
overall costs could be reduced over the longer term, because airports and ANSPs would 
have  an  economic  incentive  to  improve  their  service  quality.  Indeed,  the  measure 
would  introduce  more  transparency  into  the  air  industry  chain  on  the  respective 
responsibilities  for  flight  disruptions  and  generally  raise  awareness,  also  among  other 
airport  users,  about  the  need  to  optimize  measures  to  reduce  the  occurrence  and  the 
severity of flight disruptions. 

7.1.3. 

Impact on the functioning of the internal market and competition 

The four policy options should contribute to maintaining the level-playing field between 
the  air  carriers  operating  in  the  internal  air  transport  market,  by  ensuring  a  consistent 
enforcement  of  air  passenger  rights  across  the  EU.  The  strength  and  coordination  of 

50 

51 

For  these  indicative  calculations,  the  consultant  assumed  that  the  charge  would  apply  to  all 
flights  covered  by  the  Regulation  -  although  there  might  be  problems  to  apply  it  to  non-EU 
airlines  -  and  that  the  overhead  cost  of  the  fund  would  be  about  half  of  the  overhead  cost  of 
existing tour operator insolvency funds in the UK and Denmark as it operations would be less 
complex (but these overhead costs would still increase the total cost of the fund by about 40%). 
To get an idea of the part of the total cost that could be affected by this measure, the consultant 
used eCODA data from Eurocontrol to identify the proportion of non-reactionary delays where 
airports or air navigation service providers were clearly indicated as being at the source of the 
delay.  eCODA  data  indicate  that  airports  or  air  navigation  service  providers  (ANSPs)  are 
responsible  for  28%  of  non-reactionary  delays.  Assuming  the  proportion  of  reactionary  delays 
attributable  to  these  entities  is  equivalent  to  the  proportion  of  primary  delays,  this  could  be 
equivalent  to  an  average  of  28%  of  delays  and  38%  of  cancellations.  More  details  on  the 
calculation are given in annex 13.  

EN 

51 

   EN 

 
                                                 
enforcement policy increases from option 1 to option 4. If the enforcement bodies had 
unlimited  resources,  option  4  would  be  the  most  successful  in  establishing  a  level-
playing field but, in view of their limited resources and the counteracting force in terms 
of economic disincentives, it is difficult to judge which option would attain the highest 
level of compliance in real practice.  

Micro-entreprises:  as  noted  before,  among  the  airlines  covered  by  this  Regulation, 
there  are  no  micro-entreprises52.  Given  the  required  technical  resources  to  set  up  an 
airline  carrying  out  regular  air  services,  it  is  highly  unlikely  that  a  micro-entreprise 
could fall within the remit of this Regulation. 

Impact  on  SMEs:  only  a  very  limited  number  of  SMEs  are  concerned  by  the 
Regulation (about 30). The latter are mainly small regional carriers that benefit from the 
specific  measures  proposed  for  small-scale  operations  in  option  2.  Among  the  other 
stakeholders  impacted  by  the  options,  there  are  some  SMEs  active  among  the  ground 
handling  companies.  Enhanced  recourse  of  airlines  against  responsible  third  parties 
could  impact  them  (insofar  as  their  ground  handling  contracts  do  not  already  include 
provisions that vary their remuneration in function of service quality criteria). 

7.1.4. 

Impact on competitiveness of EU airlines 

As shown in annex 6 (p.76), where EU airlines compete with non-EU airlines on routes 
from third countries to the EU, they suffer a cost disadvantage, though limited, versus 
these non-EU airlines. Options 1 and 2 would reduce this disadvantage by reducing the 
compliance  cost  with  air  passengers'  rights.  On  the  contrary,  options  3  and  4  could 
increase the competitive disadvantage. 

7.1.5. 

Impact on administrative costs/burden 

The  main  measure  with  administrative  costs  is  that  airlines  would  have  to  set  up  the 
contingency plans and provide the requested information to the NEBs (see annex 12 for 
detailed  calculations  using  the  Standard  Cost  Model53).  This  would  cause  the  airlines 
additional administrative costs of about €  445 000 in the first year and about € 115 000 
for 

confounded). 

following 

airlines 

years 

each 

(all 

the 

of 

52 

53 

EN 

Micro-enterprises  are  defined  as  companies  with  fewer  than  10  employees  and  a  turnover  or 
balance sheet total equal to or less than €2 milli on. For example, Astraeus (one of the smallest 
airlines  in  the  UK)  in  2010  had  260  employees  and  a  turnover  of  more  than  €65  million.  The 
only  aviation  enterprises  which  might  fit  this  definition  could  be  small  business  aviation 
operators,  but  these  are  beyond  the  scope  of  the  current  Regulation  and  any  of  the  proposed 
options (no scheduled services). 
See 
(http://ec.europa.eu/governance/impact/commission_guidelines/docs/iag_2009_en.pdf) 

the  Commission  Guidelines 

assessments 

impact 

page 

for 

42 

on 

52 

   EN 

 
                                                 
Table 8: contingency planning – administrative costs for airlines 

Type of obligation 

Action 

Cost 

Submission  of 
report 

the 

first 

Compilation  of  report  (first 
year only) 

€ 328,459 

Submission  of  (recurring) 
reports 

Updating 

€ 65,692 

Submission  of  (recurring) 
reports 

Answering  questions  from 
authorities 

€ 50,149 

7.1.6. 

Impact on public authorities 

A number of policy measures (contained in all options) entail new administrative costs 
for NEBs, in total for a Net Present Value (NPV) of about €2 million over the period 
2015-2025: 

• 

• 

• 

the NEBs would have to prepare the annual reports to the Commission, where 
the  estimated  cost  is  €70000  per  year  or  a  NPV  of  €420000  over  the  period 
2015-2025.  This  corresponds  to  an  increase  of  0.12%  over  the  baseline  NEB 
costs. 

The NEBs would have to check airlines’ policies with regard to baggage, with 
an  estimated  cost  of  NPV  €500000  over  the  period  2015-2025.  This 
corresponds to an increase of 0.15% over baseline NEB costs. 

The  NEBs  would  have  to  check  airlines’  procedures  and  contingency  plans 
with regard to their rights under Regulation 261/2004 with an estimated cost of 
NPV €0.9 million which is an increa se of 0.25% over baseline costs. 

Note  that  there  are  compensating  factors  that  may  reduce  these  costs  (for  NEBs  and 
ADR bodies) but which cannot be estimated. Indeed, the clarification of rights and the 
pro-active action of checking procedures and manuals could demand fewer resources if 
it leads to a reduction of the number of complaints.  

Furthermore, under option 1, as meals, refreshments and accommodation are no longer 
provided under the provisions of the Regulation, the number of complaints is likely to 
diminish more significantly than in the other options.  

As for option 4, which includes the setting up of an EU enforcement body, according to 
the consultant's study such a measure might lead to economies of scale of about 20% of 
the  combined  costs  of  the  current  NEBs.  However,  these  savings  would  be  partly 
counteracted  by  the  higher  travel  costs  (to  the  local  branches,  and  possibly  to  visit 
airports and carry out inspections), by higher staff costs (need to attract competent staff 
to a central location) and high set-up costs (although the latter are one-off costs). 

Such a centralised system entails a transfer of the required resources from the Member 
States to the Commission. It is a matter of political judgement whether to pursue such 
option.  But  it  could  be  justified  on  the  grounds  of  subsidiarity  as  it  would  be  a  more 

EN 

53 

   EN 

 
 
 
efficient way (in the sense of more effective at similar cost) to enforce an option with 
higher compliance costs than the present Member-State based enforcement. 

7.1.7.  Overview of economic impacts 

Table 9: summary of the economic impacts of the policy packages 

Impacts  on  the 
functioning  of 
internal 
the 
and 
market 
competition 

on 

Impact 
competitivenes
s of EU airlines 

Impacts 
on 
operating  costs 
and  conduct  of 
businesses 

1 

2a 

2b 

3 

4 

0/+ 

0/+ 

0/+ 

0/+ 

0/+ 

Positive 
impact on 
the  level-
playing 
field 

Positive 
impact  on 
level-
the 
playing 
field 

Positive 
impact on 
the  level-
playing 
field 

Positive 
impact  on 
the  level-
playing 
field  

Positive 
impact  on 
the  level-
playing 
field  

0/+ 

0 

0 

-/0 

-/0 

Slightly 
positve 
impact 
because 
of 
lowering 
cost 
for 
EU 
airlines 

Marginal 
impact  on 
competitiv
eness  vis-
à-vis  non-
EU airlines 

Marginal 
impact on 
competiti
veness 
vis-à-vis 
non-EU 
airlines 

Slightly 
negative 
impact 
because 
of 
increasin
g  cost  for 
EU 
airlines 

Slightly 
negative 
impact 
because 
of 
increasin
g  cost  for 
EU 
airlines 

++ 

+ 

+ 

-- 

-- 

Cost 
increases 

Cost 
increases 

Strong 
cost 
reduction 

Cost 
reduction 
and 
limit 
costs 
cases 
mass 
disruptions 

clear 
to 
in 
of 

Cost 
reduction 
and  clear 
to 
limit 
costs 
in 
cases  of 
mass 
disruption
s 

  Businesses 

- 

-/0 

-/0 

-/0 

-/0 

-/0 

administrative 
burden 
after 5 years 

(AB) 

Slight 
increase 
of burden 

Slight 
increase  of 
burden 

Slight 
increase 
of burden 

Slight 
increase 
of burden 

Slight 
increase 
of burden 

  Public 

+ 

-/= 

-/= 

-- 

-- 

authorities 
AB 
after 
years 

- 
5 

Decreasin
g 
costs 
for 
enforcem

Slightly 
increasing 
costs 
enforceme

for 

Slightly 
increasin
g 
for 
enforcem

costs 

costs 

Increasin
g 
for 
enforcem

costs 

Increasin
g 
for 
enforcem

EN 

54 

   EN 

 
 
 
 
 
 
 
1 

2a 

2b 

3 

4 

ent policy  nt policy 

ent policy  ent policy  ent policy 

Member 
States 

+ 

European 
Commission 

0 

- 

- 

- 

- 

+ 

+ 

Cost 
shifts 
to 
Commissi
on 

- 

-- 

7.2. 

Social impacts 

7.2.1. 

Impact on passengers/consumers 

All options present common features: 

• 

• 

• 

Better  enforcement  of  passengers'  rights  (including  for  mishandled  baggage): 
NEBs can better concentrate on general enforcement (thanks to the complaint-
handling  of  ADR  bodies  under  the  ADR  proposal)  and  would  implement  a 
more pro-active approach aimed at preventing infringements. 

Improved means to submit individual complaints when rights are not respected: 
passengers  will  have  more  information  on  how  to  contact  the  airline  for 
submitting complaints and airlines will have to give a reasonable reply within a 
fixed deadline; in addition, thanks to the ADR proposal, passengers can turn to 
the ADR with their individual complaints and the NEB will provide technical 
support (see complaint handling below). 

A  simplification  of  rights  (e.g.  time  thresholds)  and  a  clarification  and 
strengthening of rights in many instances: this will provide passengers a better 
understanding  of  their  rights,  may  reduce  disputes  between  parties  on  the 
correct interpretation of law and provide a more effective legal framework for 
enforcement bodies and courts. 

Option 1 significantly reduces the obligations of airlines versus passengers during flight 
disruptions  and  only  insured  passengers  will  remain  protected.  Optional  insurance 
presents advantages and disadvantages to passengers. 

Advantages of option 1: 

• 

• 

Airlines would have a financial incentive to comply with the obligation to offer 
optional  insurance;  indeed,  if  they  did  not  offer  it,  they  would  not  earn  any 
revenue  from  the  sale  of  these  insurances.  Moreover,  the  passenger  could 
possibly  acquire  the  insurance  via  other  channels  as  well  (travel  agent,  tour 
operator, etc.). The passenger would be able to make an informed choice. 

The  passenger  would  be  able  to  make  a  choice  for  or  against  insurance  in 
function of his individual situation. For example, a passenger visiting friends or 
relatives may avoid the expense for insurance when he is assured that in case of 
flight disruption he would anyway be able to stay with his friends or relatives. 
He would thus not be paying for an insurance he is unlikely to enjoy. 

EN 

55 

   EN 

 
 
 
 
 
• 

• 

Different  types  of  insurance  policies  are  likely  to  be  developed,  offering 
different  levels  of  quality  of  service  at  different  prices.  Consumers  would  be 
able to take out insurance in function of their individual capability or desire to 
organise  their  care  and  assistance  (e.g.  with  or  without  assistance  to  find 
accommodation, different hotel categories, etc.). 

Air  fares  would  be  reduced  by  between  0.5  and  1  per  cent  compared  to  their 
evolution in the baseline scenario if the cost reduction were translated into the 
air fares. 

Disadvantages of option 1:  

• 

• 

• 

Many  passengers,  in  the  light  of  the  low  occurrence  rate  of  delays  and 
cancellations, may misjudge the risk of not being insured. Although one might 
consider that this is an individual choice, and although many of the operational 
objectives defined above are well met by this option, it is questionable whether 
this option does fully respond to the general objective of ensuring a high level 
of protection to passengers in cases of travel disruption. 

Insurance companies are likely to introduce some caps on liability which will 
not allow the passenger to attain the same level of coverage as today or under 
the other options, even if he takes out insurance. 

insurance 

in  case  passengers  would 

The positive impact on air fares would be counterbalanced by the price to be 
to  keep 
paid  for  optional 
approximately the same level of protection as today. The cost of insurance will 
probably  vary  depending  on  circumstances  (e.g.  insurance  policy  for  single 
flight  or  covering  a  certain  period),  but  existing  insurance  policies  in  the  EU 
and  the  US  show  that  the  price  could  easily  be  higher  than  the  above-
mentioned gain in air fares. 

like 

Under option 2, the airline remains compelled to provide the care and assistance. 

Advantages of option 2a:  

• 

• 

It further contributes to the simplification of passenger rights: the right to care 
arises always after 2 hours of delay; the right to financial compensation in case 
of  delay  will  not  arise  before  the  right  to  reimbursement  (5  hours),  which 
increases  the  consistency  of  the  passenger  rights.  However,  as  noted  earlier, 
this simplification advantage would be lost in a sub-variant  of option 2a with 
multiple time thresholds for delay compensation depending on the distance of 
the flight (where the passenger would need to know the different thresholds of 
5, 9 or 12 hours and in which category fits his flight). 

It avoids cancellations that risk arising under a strict application of the 3-hour 
delay for compensation for delay. Indeed, airline schedule optimisation models 
show  that  a  short  threshold  may  increase  the  number  of  flight  cancellations 
where airlines reduce the knock-on effects of delayed flights on the subsequent 
flights by cancelling one or several flights to reposition the aircraft for a next 

EN 

56 

   EN 

 
flight54. As in most circumstances, the passenger will still prefer a delay over a 
cancellation, this measure therefore also presents an advantage for him or her. 

• 

It reduces the cost of the compensation for delay for the airlines and thereby 
reduces  the  disincentive  for  compliance  with  passenger  rights.  This  impact 
would be stronger in case the subvariant with reduced compensation levels was 
chosen (and even stronger if this was combined with multiple time thresholds 
for compensation in case of long delay). 

Disadvantages of option 2a:  

• 

• 

• 

The right to claim compensation for delay only arises after a delay of 5 hours 
instead of 3 hours (although this may reduce cancellations) and the amount of 
compensation  may  be  lower  (depending  on  the  sub-variant).  The  cost 
reductions  for  the  airlines  are  the  mirror  image  of  the  monetary  loss  of 
passengers.  In  the  sub-variant  with  multiple  time  thresholds,  the  right  to 
compensation for delay arises even later (e.g. already for flights of more than 
1500 km, a threshold of 9 hours would apply instead of the current 3 hours).  

In  case  of  mass  disruption,  passengers  (except  PRM)  would  have  to  pay  for 
their  accommodation  if  the  disruption  lasts  longer  than  the  introduced  time 
limit (e.g. 3 or 4 nights). 

The protection of passengers is reduced on regional flights: for the passengers 
of these flights, this is of course a significant reduction of their rights although 
the  question  arises  in  how  far  small  regional  carriers  are,  under  the  current 
rules,  able  to  provide  these  rights.  In  total,  based  on  2011  data,  between  200 
and 260 small routes in the EU would be touched by this measure, implying the 
offer  of  about  680  000  seats  yearly  or,  assuming  an  average  load  factor  of 
61.4%  for  regional  carriers  (see  annex  8a),  about  417  000  passengers,  that  is 
less than 0.05% of all passengers covered by this Regulation. 

Although option 2b is very similar to option 2a, there are differences for passengers: 

• 

• 

• 

Under 2b, the right to compensation already arises after 3 hours, but there will 
be  more  circumstances  where 
invoke  extraordinary 
circumstances;  

the  airline  can 

It  appears  inconsistent  and  confusing  that  the  right  to  compensation  (3  hrs) 
arises before the right to reimbursement (5 hrs); 

There is a risk of more cancellations if the right to compensation after a 3-hour 
delay is better enforced. 

Options  3  and  4  contain  many  advantages  for  passengers  such  as  a  reinforcement  of 
their  existing  rights  and  a  better  enforcement  of  these  rights.  However,  it  may  also 
translate – compared to the baseline - into higher ticket prices to finance the costs for 
airlines and the contribution to the industry fund and, as tax payers, passengers will also 
contribute to the higher enforcement cost. 

54 

To  see how  increasing  delay  costs  may  increase  cancellations  in  schedule  optimisation  see  for 
example  "Sensitivity  analysis  of  airline  schedule  optimization  (ASO)  -  advanced  model"  by 
Danica Pavlovic, Journal of Air Transport Studies, volume 1, issue 2, 2010  

EN 

57 

   EN 

 
                                                 
Table 10 shows the impact of the policy options on quantifiable consumer benefits.  It 
should  be  recalled  that  estimates  are  made  under  the  assumption  of  full  compliance. 
Where a reinforcement of enforcement would improve actual compliance, these figures 
could become positive again. 
Table 10: impact of policy options on consumer benefits55 

Impact of the full policy packages 
compared to the baseline scenario 

Total  passenger  benefits 
rate 
at  current  claim 
(assumed 
increase 
slowly over time) 

to 

NPV  (2015-
2025) 

In € million 

% change 

compared 
to 
baseline 

Total  passenger  benefits  (if 
all  entitled  passengers  claim 
compensation) 

NPV  (2015-
2025) 

In € million 

% change 

compared  to 
baseline 

Baseline 

Option 1 

Option 2a 

Unchanged 
compensation levels 

Adjusted 
compensation levels 

Option 2b 

Unchanged 
compensation levels 

Adjusted 
compensation levels 

13.1 

4.7 

12.5 

- 

-64% 

-5% 

26.3 

10.6 

21.0 

- 

-60% 

-20% 

11.7 

-11% 

17.6 

-33% 

12.3 

-6% 

20.0 

-24% 

11.5 

-12% 

16.8 

-36% 

Option 3 

Option 4 

13.3 

13.8 

+2% 

+5% 

27.8 

28.4 

+6% 

+8% 

Source: 2012 SDG study + Commission estimates 

Overall, as announced in section 5.2, the assessment shows the unavoidable trade-off to 
be  made  between  the  objective  of  reducing  disincentives  and  the  protection  of 
passengers; indeed, reductions in compensation payments take into account the financial 
capacities of the air carriers, but at the same time reduce benefits to consumers. But this 
trade-off only touches upon financial compensation rather than on care and assistance; 

55 

Many  of  the  passenger  benefits  required  by  the  Regulation  are  either  monetary  amounts  or 
directly  quantifiable  in  monetary  terms  (for  example,  monetary  compensation,  refunds,  hotel 
accommodation and refreshments). These passenger benefits are therefore expressed in monetary 
terms  and  are  equivalent  to  the  costs  the  airline  has  to  incur.  However,  by  changing  the 
circumstances under which rerouting should be offered, a number of the policy measures could 
result  in  changes  to  the  total  level  of  passenger  waiting  time.  The  consultant  calculated  the 
waiting time impact by estimating how much more or less time a passenger would have to wait, 
and attaching a value to this time (see also footnote 23). 

EN 

58 

   EN 

 
 
                                                 
this is the result of how the policy objectives were set (section 5.1); policy options 2 to 
4  protect  and  reinforce  passenger  rights  with  regard  to  immediate  help  in  the  form  of 
care  and  assistance,  but  they  may  weaken  the  aspect  of  financial  compensation  that 
comes on top of this care.  

Table 11: summary of impacts on consumers/passengers. 

Impacts 
on 
consumer
s/passeng
ers 

Option 1 

Option 2a  Option 2b Option 3 

Option 4 

- 

+ 

+ 

++ 

++ 

Better 
enforcem
ent, better 
defined 
rights  and 
new 
rights 

Better 
enforcem
ent, better 
defined 
rights  and 
new 
rights 

Less 
protection 
in 
flight 
disruptions 
if 
passenger 
misjudged 
the risks  

Slightly 
lower fares 

better 

Better 
enforceme
nt, 
defined 
rights,  new 
rights  (and 
unlimited 
rights  even 
mass 
in 
disruptions
) 

better 

Better 
enforceme
nt, 
defined 
rights,  new 
rights  (and 
unlimited 
rights  even 
mass 
in 
disruptions
) 

Slightly 
increased 
air fares 

Slightly 
increased 
air fares 

"-" means less than baseline – "+" means better than baseline 

7.2.2. 

Impacts on employment 

The  employment  impact  of  the  assessed  policy  options  remains  limited  as  the  options 
mainly  aim  at  fine-tuning  existing  passenger  rights  and  improving  their  enforcement. 
There  are  some  indirect  effects  on  employment,  mainly  via  the  impact  that  changing 
costs can have on air fares and hence on demand for air services. As shown in the table 
below,  these  effects  remain  quite  limited  but  are  positive  for  most  options  (except 
option 4). 

To  obtain  these  figures,  it  was  assumed  that  the  number  of  jobs  per  passenger  (in  the 
case  of  airports)  and  per  passenger-kilometer  (in  the  case  of  airlines)  is  relatively 
constant  (see  page  155  of  annex  15  for  more  information  on  the  underlying 
assumptions).  The  global  employment  figures  shown  in  table  12  correspond  for  about 
55% to airline jobs and 45% to jobs located at airports (airport staff, ground handling 
staff and other). 

Table  12:  expected  variation  in  average  employment  (2015-2025)  under  the  various 
policy options (compared to baseline) 

Full-time 
equivalents 

Option 1 

Estimated under current claim rate 

+10 000 

Option 2a 

Unchanged compensation 

+ 750 

EN 

59 

   EN 

 
 
 
 
 
 
Adjusted compensation 

+1 800 

Option 2b 

Unchanged compensation 

+1 000 

Adjusted compensation 

+1 800 

Option 3 

Option 4 

-1 100 

-1 500 

Source: Commission estimates based on SDG data 

7.2.3. 

Impacts on fundamental rights 

The policy options have no adverse effects on the fundamental rights of citizens. The 
policy  options  2,  3  and  4  enhance  consumer  protection  and  are  therefore  in  line  with 
Article 38 of the Charter on fundamental rights; however, there are doubts with regard 
to option 1 where the protection depends on the willingness of the passenger to acquire 
insurance. With regard to the protection of personal data (article 8 of the charter), note 
that  the  option  includes  an  obligation  for  travel  agents  to  provide  passengers  contact 
details to the airline (to contact them in case of flight disruption), but the travel agent 
cannot do so without the explicit consent of the passenger and the data can only be used 
for this specific purpose. 

With  regard  to  the  integration  of  persons  with  disabilities  (article  26),  the  options 
include  a  clarification  with  regard  to  the  compensation  for  mishandled  mobility 
equipment  (enabling  compensation  up  to  the  full  damage),  and  option  2  excludes 
disabled  passengers  and  passengers  with  reduced  mobility  from  the  applicability  of  a 
cap  on  accommodation  in  extraordinary  events  of  long  duration.  In  option  2,  such 
exclusion  could  also  be  added  with  regard  to  the  derogation  from  accommodation  for 
regional operations without significantly increasing the compliance cost, given the low 
proportion of persons with disabilities in total passenger numbers. 

7.3. 

Environmental impacts 

The environmental impacts of the policy options mainly derive from the indirect effects 
from cost variation on air fares and from there on demand for air travel using standard 
price  elasticities  (see  annex  15,  page  152,  for  the  assumptions  underlying  the 
calculations). The table below shows the impact on emissions: options 1 and 2 slightly 
increase emissions while under options 3 and 4 emissions are almost unchanged. Note 
that  any  increases  will  be  addressed  by  the  inclusion  of  the  air  transport  sector  in  the 
emission trading system. 

Table  13:  impact  on  average  CO2  emissions  between  2015  and  2025  (compared  to 
baseline) 

In  thousands 
of  tonnes  of 
CO2 

Option 1 

Estimated under current claim rate 

+900 

Option 2a 

Unchanged compensation 

+70 

EN 

60 

   EN 

 
 
 
 
 
Adjusted compensation 

+150 

Option 2b 

Unchanged compensation 

+90 

Adjusted compensation 

+160 

Option 3 

Option 4 

-130 

-100 

Source: Commission estimates based on SDG data 

7.4. 

Comparing the options 

The  policy  packages  are  assessed  against  the  criteria  of  effectiveness,  efficiency  and 
coherence. 

From  an  effectiveness  point  of  view,  option  2  (a  and  b)  offers  the  highest  potential 
achievement of all specific goals, while 1 and 4 offer a good effectiveness in general. 

In terms of efficiency, options 3 and 4, are the most costly and are less efficient than the 
other options. 

In  terms  of  coherence,  option  1  risks  missing  the  general  objective  of  reinforcing 
passenger rights if most passengers were not ensured. 

Table 14: comparion of the options 

Effectiveness 
with  regard  to 
specific 
objectives 

(see  annex  16 
for details) 

Effectiveness, efficiency and coherence of the policy packages 

1 

2a 

2b 

3 

4 

+ 

++ 

+(+) 

-/+ 

-/+ 

(some 
weakness 
on 
coordinati
on 
enforceme
nt  policy, 
good 
but 
on 
other 
objectives) 

of 

(addresses 
all 
objectives) 

specific 

(addresses  all 
specific 
objectives 
some 
but 
weakness  on 
clarification/
consistency) 

unsure 
this 

(strong 
enforcement 
but 
whether 
can 
compensate 
disincentive 
for compliance 
from  increased 
costs) 

unsure 
this 

(strong 
enforcement 
but 
whether 
can 
compensate 
disincentive 
for compliance 
from  increased 
costs) 

Efficiency 

+ 

+ 

+ 

- 

- 

(moderate 
cost 
reduction  for 
airlines  and 
authorities) 

(moderate 
cost 
reduction  for 
airlines 
and 
authorities) 

(costs  increase 
both 
for 
airlines 
and 
authorities) 

(costs  increase 
both 
for 
airlines 
and 
authorities) 

(strong 
cost 
reduction 
for  airlines 
and 
authorities
) 

EN 

61 

   EN 

 
 
 
 
 
 
 
 
Coherence 

-/+ 

++ 

++ 

++ 

++ 

(better 
enforcement 
existing 
of 
rights, 
marginal 
environment
al impact)  

existing 

(better 
enforcement 
of 
rights, 
marginal 
environmenta
l impact) 

(better 
enforcement of 
existing  rights, 
marginal 
environmental 
impact) 

(better 
enforcement of 
existing  rights, 
marginal 
environmental 
impact) 

(while  the 
option 
ensures 
better 
complianc
e 
passenger 
rights, 
these 
rights  are 
weakened) 

with 

Global 
assessement 

+ 

++ 

+(+) 

-/+ 

-/+ 

'-" means worse than baseline, "+" means better than baseline 

Overall option 2 is preferable over the others as it is effective and efficient to meet the 
policy objectives and remains coherent with the overall objective of ensuring minimum 
rights to all passengers. 

Although  very  similar  in  the  outcome,  option  2a  is  slightly  preferred  over  2b  for  two 
reasons: 

• 

• 

In  option  2b,  the  delay  threshold  is  kept  at  3  hours  (as  in  Sturgeon),  but  this 
might incur more cancellations than if the threshold were increased as in option 
2a. 

It  also  follows  from  this  that  in  option  2b,  the  right  to  reimbursement  only 
arises after 5 hours while the right compensation already arises after 3 hours: 
this appears inconsistent and may confuse passengers. 

It  comes  as  no  surprise  in  the  light  of  the  policy  objectives  that  the  preferred  policy 
option  2a  presents  a  compromise  between  the  positions  expressed  by  the  air  carriers 
and the consumer groups in the public consultation. In line with consumers' wishes, the 
option enhances enforcement and individual complaint handling, clarifies a number of 
rights  that  are  at  best  implicit  in  the  present  Regulation  (e.g.  missed  connections  or 
tarmac delays), confirms the right to compensation in case of long delays and introduces 
contingency  planning.  And  in  view  of  taking  into  account  the  concerns  of  the  air 
carriers, the option includes an increased time threshold for the delay compensation, a 
time limit on the care to be provided during exceptional events of long duration and a 
measure  to  take  into  account  the  specific  problems  of  regional  flights.  It  includes  the 
possibility  of  recourse  against  third  parties  such  as  airports  or  ground  handlers  but 
without introducing any automatic rights in this regard, thereby taking into account the 
groups. 
concerns 

stakeholder 

expressed 

these 

by 

EN 

62 

   EN 

 
Table 15: Summary quantitative impact on compliance costs and consumer benefit (at 
current claim rate, unchanged compensation amounts) 

1 

on 

-80% 

2a 

-6% 

2b 

-8% 

3 

4 

+9% 

+12% 

on 

-64% 

-5% 

-6% 

+2% 

+5% 

Impact 
compliance 
cost 

Impact 
consumer 
benefit 

Source: tables 6 and 10 

With regard to the assessed sub-variants of option 2a, there is no objective criterion to 
mark  a  preference  between  them.  The  choice  of  subvariant  mainly  depends  on  the 
political choice being made with regard to the trade-off between the passengers' rights 
and the compliance cost for the airlines: 

- a possible change of the lump-sum amounts of compensation (see section 7.2) would 
provide  an  additonal  reduction  in  the  compliance  cost,  but  this  reduction  implies  an 
equivalent loss of compensation for the passengers (both are reduced by about 10%). 

-  the  same  is  valid  for  the  possible  introduction  of  multiple  delay  thresholds  for 
compensation in function of the flight distance. This measure would mainly benefit air 
carriers operating long-haul flights and would mainly impact on passengers of the same 
flights. 

It is a matter of political judgement to weigh such additonal cost reduction against the 
reduced  possibilities  for  compensation  for  the  passengers  on  the  concerned  flights. 
Hence, the choice between the sub-variants of policy option 2a is a matter of political 
consideration. 

8. 

MONITORING AND EVALUATION 

Providing for a robust monitoring and evaluation mechanism is crucial to ensure that the 
rights  envisaged  in  the  Regulation  are  complied  with  in  practice  and  that  its  costs 
remain proportional to its objectives. 

Under the revised Regulation, the NEBs will provide annual reports on their activities to 
the  Commission;  these  reports  will  provide  a  valuable  overview  of  the  application  of 
passenger rights.  

The  annual  reports  of  the  NEBs  will  be  the  main  tool  for  monitoring  the  level  of 
compliance  and  the  consistency  of  national  enforcement  policies.  Among  other,  they 
will provide information with regard to the following parameters: 

• 

Number and type of enforcement actions and sanctions imposed (and effective 
payment of penalties), especially in view of evaluating the effectiveness of the 
enforcement policies; in this context, also the new areas of competence of the 
NEBs with regard to baggage will be evaluated. 

EN 

63 

   EN 

 
 
 
 
• 

• 

• 

Number and type of founded complaints: their analysis should provide insight 
into  the  main  problem  areas  of  the  passenger  rights  (i.e.  to  which  rights  do 
most complaints refer) – the information should be compared, where available, 
with  surveys  on  compliance  in  order  to  obtain  a  full  understanding  of  the 
explanatory  factors  underlying  the  data.  Special  consideration  should  also  be 
given  to  specific  problems  reported  with  regard  to  passengers  with  reduced 
mobility. 

Where  available,  cases  before  national  courts  and  their  outcome:  again,  this 
information is valuable to get insight into possible shortcomings of the revised 
passenger  rights  or  of  their  application.  This  can  be  cross-referenced  with 
possible prejudicial questions before the ECJ. 

Resources  employed  by  the  NEBs  in  order  to  evaluate  the  impact  of  the 
modifications  to  complaint  handling  and  enforcement  on  the  cost  of 
implementation. 

Furthermore,  the  Commission  can  carry  out  ad-hoc  studies  on  the  application  of  air 
passenger rights as it has already done in the past on several occasions (see section 3.2, 
p.10). More information can be gathered from possible common surveillance actions by 
the NEBs, from consumer organisations and the surveys they carry out, and from airline 
associations. Such studies will also provide further information on the evolution of the 
compliance  cost  and the  evolution of actions  for redress against third parties  ("burden 
sharing"). 

Based  on  the  gathered  information,  the  Commission  would  properly  evaluate  the 
implementation  of  the  Regulation  4  years  after  its  adoption  and  report  to  the  Council 
and the Parliament on possible legislative or non-legislative action to be taken. 

EN 

64 

   EN 

 
ANNEX 1: Public consultation - participation 

A public on-line consultation has been carried out between 19 December 2011 and 11 
March  2012  which  focussed  on  questions  with  regard  to  a  possible  revision  of 
Regulation 261/2004. A total of 410 submissions to the consultation were received: 

Consumer and passenger associations: 28 

EU-wide associations of consumer and passenger associations: 2 

Airline associations: 16 

Individual airlines: 46 

Airport associations: 9 

Individual airports: 17 

Tour operators' associations: 8 

Individual tour operators: 3 

Travel retailers and suppliers: 56 

National and subnational authorities: 18 

Individuals: 181 

Other: 26 

Given  the  high  number  of  issues  covered,  the  Commission  instructed  its  consultant 
(Steer  Davies  Gleave)  to  carry  out  –  complementary  to  the  public  consultation  - 
individual interviews and consultations with 98 stakeholders selected in order to cover 
all stakeholder groups: 

Consumer and passenger associations: 28 

Airlines' associations: 6 

Individual airlines: 18 

Airports' associations: 1 

Individual airports: 6 

Tour operators' associations: 2 

National Enforcement Bodies: 32 

Other: 5 

These individual consultations allowed to deepen the issues with regard to the specific 
interests  and  know-how  of  the  stakeholders  concerned.  In  total,  41  face-to-face 
interviews were carried out with the main pan-EU industry and consumer associations, 
with airline and with national enforcement bodies and national consumer organisations 
in  14  case  study  countries.  The  other  stakeholders  contributed  by  direct  written 
submissions and/or telephone interviews. 

Finally, on 30 May 2012, the Commission and the Economic and Social Committee co-
organised a conference presenting the main results of the public consultation, and giving 
stakeholders  the  opportunity  to  react  to  these  results.  The  representative  organisations 
that responded to the public consultation were invited to this conference. 

EN 

65 

   EN 

 
 
For the results of the consultation, please see the Commission's website:  

http://ec.europa.eu/transport/passengers/consultations/2012-03-11-apr_en.htm.  

EN 

66 

   EN 

 
ANNEX 2a: Basic data and estimates 

Table 16: Total disrupted passengers (millions) 

OD / length 

Delay type 

2007 

2008 

2009 

2010 

Proportio
n  of  total 
passenger
s (average 
2007-
2009) 

Delay 

EU <1500km 

Delay > 120 mins 

6.425  

5.842  

5.017  

8.853  

1.20% 

EU 1500-3500km 

Delay > 180 mins 

1.119  

1.154  

0.842  

1.634  

1.00% 

EU >3500km 

Delay > 180 mins 

0.024  

0.027  

0.027  

0.051 

1.47% 

Non-EU <1500km 

Delay > 120 mins 

0.476  

0.478  

0.514  

1.040 

1.77% 

Non-EU 
3500km 

1500-

Delay > 180 mins 

0.603  

0.764  

0.603  

1.485  

1.17% 

Non-EU >3500km 

Delay > 240 mins 

1.530  

1.467  

1.140  

1.756  

0.93% 

Other disruption 

Cancellation 

8.035  

7.864  

7.416  

23.705 

0.9% 

Tarmac delay 

Delay > 60 mins 

1.017  

1.048  

1.078  

2.087  

0.13% 

Denied boarding 

Voluntary 

0.176 

0.144  

0.133  

0.135  

0.02% 

Involuntary 

0.233  

0.185 

0.173  

0.170 

0.02% 

Downgrading 

0.224 

0.153  

0.109  

0.123 

0.02% 

Baggage 

Lost 

0.036  

0.029  

0.020  

0.025 

0.003% 

Delayed 

8.194 

6.739  

4.844  

5.585  

0.79% 

Damaged/pilfered 

1.613 

1.418  

1.158  

1.340  

0.17% 

EN 

67 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ANNEX 2b: breakdown of delays by cause 

Proportion of all delays 

Cause of Delay 

2007 

2008 

2009 

2010 

Average 
2007-10 

Technical 

10.3% 

10.9% 

11.5% 

8.6% 

10.3% 

ATFM and airports 

14.7% 

16.0% 

15.9% 

18.3% 

16.2% 

Weather 

Aircraft 
handling 

2.9% 

3.4% 

5.1% 

6.1% 

4.4% 

and 

ramp 

5.1% 

4.9% 

4.5% 

3.7% 

4.6% 

Operations and crew 

3.5% 

3.8% 

3.9% 

3.7% 

3.7% 

Passengers and baggage 

5.1% 

4.2% 

4.7% 

3.6% 

4.4% 

Mandatory security 

2.2% 

1.9% 

2.2% 

1.9% 

2.1% 

Reactionary 

46.8% 

45.8% 

43.8% 

46.3% 

45.4% 

Other 

9.3% 

8.6% 

8.4% 

7.9% 

8.5% 

Tab
le 

17 

Sou
rce: 
Eur
oco
ntr
ol 
eC
OD
A 

EN 

68 

   EN 

 
 
ANNEX 3: Passenger surveys on airline compliance with air passenger rights 

During the individual interviews, four stakeholders presented evidence from surveys of 
airline compliance with the Regulation: 

•  Verbraucherzentrale  Brandenburg  (VZB;  the  consumer  association  of 

Brandenburg, Germany); 

•  The Danish Consumer Council; 

•  Which; and 

•  The UK CAA. 

VZB  surveyed  1,184  consumers  across  all  German  states  in  2010,  of  which  1,122 
submissions were included in the survey. It found that:  

•  In 84% of cases  passengers were not  informed of the disruption until they 

arrived at the airport. 

•  Over half of passengers were not informed of their rights, as required under 

Article 14; 

•  Where  passengers  complained,  airline  response  times  were  long  –  24%  of 
complainants  received  a  reply  within  1  month,  and  22%  did  not  receive  a 
response; and 

•  Only  one  in  four  airlines  provided  compensation,  any  in  many  cases  this 

was only on request from the passenger. 

The  Danish  Consumer  Council  has  conducted  two  surveys  over  the  past  two  years, 
which have found that: 

•  Delays were the most commonly experienced type of disruption, with 20% 
of  passengers  having  been  affected  in  the  previous  three  years.  10%  had 
been  affected  by  cancellations,  and  only  2%  had  experienced  denied 
boarding.  

•  More  than  50%  of  passengers  affected  by  delays  and  40%  affected  by 

cancellations were not informed of their rights; 

•  27% of  delayed  passengers and 11% due to travel  on cancelled flights  did 

not receive any assistance; 

•  Only 2% of delayed and 4% of cancelled passengers were offered telephone 

calls, telex/fax messages, or emails; 

•  Only 4% of passengers received compensation for delays, and 2% received 

compensation for cancellations; and 

•  None of the carriers serving Copenhagen airport followed the guidelines set 
by  the  Danish  NEB  regarding  minimum  allowances  for  refreshments  and 
meals. 

Which?  undertook  a  survey  in  2010  which  indicated  that  45%  of  passengers  which 
experienced  delays  did  not  receive  the  care  to  which  they  were  entitled.  Very  few 
respondents  had  tried  to  claim  compensation  for  a  long  delay  or  cancellation,  so  no 
reliable conclusions could be drawn on this matter. 

EN 

69 

   EN 

 
The UK CAA conducted a passenger survey following the heavy snowfall in the winter 
of 2010/11, which found that: 

•  Although 89% of respondents had experienced a delay or cancellation, less 
than  20%  received  refreshment  or  meal  vouchers,  and  60%  received 
nothing; 

•  74%  of  respondents  were  dissatisfied  with  the  information  they  received 

during the disruption; and 

•  75%  were  not  informed  of  their  rights  when  their  flight  was  delayed  or 

cancelled. 

All of these surveys suggest that provision of information on disruption and the rights of 
passengers under the Regulation is poor, and in a large proportion of cases airlines are 
failing  to  offer  disrupted  passengers  the  assistance  required  under  the  Regulation. 
However,  the  respondents  to  the  CAA  and  VZB  survey  were  self-selecting,  and 
therefore  it  is  not  clear  that  wider  conclusions  can  be  drawn  about  airline  compliance 
from these surveys.  

EN 

70 

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ANNEX 4: Unclear rights under Regulation 261/2004 and other EU consumer law 

EU  law  -  be  it  Regulation  261/2004  or  general  consumer  law  -  remains  vague  with 
regard  to  the  rights  of  passengers  for  the  following  issues  closely  related  to  flight 
disruptions: 

• 

• 

• 

56 
57 

the right of rerouting: the public consultation has shown that in many cases 
airlines and passengers disagree on the meaning of the terms "re-routing under 
comparable  transport  conditions"  given  in  Article  8.1.b  of  the  Regulation,  in 
particular whether this provision includes a requirement for rerouting via other 
carriers or other transport modes. In the interviews, the issue of the meaning of 
the term ‘comparable transport conditions’ was frequently raised by NEBs as 
an issue  needing clarification, in particular with respect to whether and when 
rerouting on other carriers or other modes was required. All of the main airline 
associations  and  most  of  the  individual  airlines  were  opposed  to  further 
clarification of this Article, as they understand that rerouting by other carriers 
or modes would currently not be a requirement. In contrast, most tour operator 
and  travel  agent  associations  believed  that  there  should  be  a  requirement  to 
reroute  on  other  airlines  after  a  certain  time.  Most  public  authorities  and 
consumer  representatives  agreed  that  there  should  be  a  right  to  rerouting  on 
other carriers after a certain period. 

a missed connecting flight due to the delay of a preceding flight: passengers 
who miss connecting flights due to cancellations are explicitly protected by the 
Regulation,  but  the  protection  of  passengers  who  miss  connections  due  to 
delays  is  not  as  clear.  Although  in  its  April  2010  Communication,  the 
Commission  clarified  that  connecting  points  are  indeed  covered  by  the 
provisions of the Regulation56, NEBs or courts may not always share this view 
and  the  public  consultation  confirmed  the  disagreement  between  airlines  and 
consumers/passengers  on  this  issue:  all  consumer  associations  and  almost  all 
public  authorities  agreed  that  the  Regulation  should  be  amended  to  clarify 
explicitly that missed connections due to the delay or cancellation of a previous 
leg of a journey under a single transport contract are covered. In the bilateral 
interviews, most said that airlines generally already did provide rerouting and 
assistance  in  these  cases,  but  that  it  depended  on  the  airline  and  was  not 
universally  the  case.  It  is  one  of  the  issues  raised  most  often  by  NEBs  and 
others in the interviews as being unclear in the current Regulation. There are no 
statistics on missed connecting flights, but estimates by SDG in its 2012 study 
– based on delay statistics and average connecting times – indicate that around 
3.8 million passengers might miss connections due to delays every year. 
advance  rescheduling  of  the  flight57:  the  Regulation  does  not  explicitly 
provide  rights  for  the  passengers  in  case  their  flight  has  been  rescheduled  in 
advance (although if the new flight times are not convenient for the passenger, 
the rescheduling may cause the same discomfort as a cancellation). Only if the 
flight  was  part  of  a  package,  passengers  may  be  protected  by  the  Package 
Travel  Directive  90/314.  Unfortunately,  no  data  on  advance  rescheduling  are 
available,  although  complaints  and  inquiries  received  by  the  European  Direct 

Page 7 of COM(2011) 0174 final 
Some NEBs and national courts assimilate rescheduling to cancellations 

EN 

71 

   EN 

 
                                                 
Contact  centre  and  by  NEBs  indicate  that  confusion  about  the  topic58.  In  the 
public consultation, almost all the consumer associations and public authorities 
asked  for  the  explicit  inclusion  of  passenger  rights  in  case  of  advance 
rescheduling into the text of the Regulation, but airlines, travel agents and tour 
operators were opposed. 

denied  boarding  because  the  passenger  did  not  use  consecutively  the  flights 
bought  under  the  same  travel  contract  ("no  show"  policy):  many  airlines 
require  their  passengers  to  use  flights  bought  under  the  same  travel  contract 
consecutively,  otherwise  they  may  not  be  allowed  to  board  the  subsequent 
flight(s). Passengers who decide not to take, for instance, the first leg of a flight 
with one or more stops, but wish to board the flight at the first transit point (or 
are  unable  for  whatever  reason  to  take  the  outbound  flight  of  a  return  ticket) 
may be denied boarding for the next leg of the flight or the return flight by the 
airline, which considers their ticket no longer valid. The practice appears to be 
banned  in  some  Member  States  but  not  in  others  depending  on  the  way 
Directive  93/13  on  unfair  terms  in  consumer  contracts  has  been  translated  in 
national  law  and  has  been  interpreted  by  national  courts59.  Unfortunately,  no 
data is available on the number  of  passengers  that  suffered from this practice 
but  associations  of  consumers  and  of  travel  agents  indicate  that  this  is  a 
recurrent  problem.  In  the  public  consultation,  most  consumer  organisations 
back  an  explicit  ban  of  no-show  policies  while  airlines  and  their  associations 
were clearly opposed. 

risk  of  denied  boarding  because  of  booking  errors:  consumer  organisations 
point  to  the  costs  that  consumers  incur  with  some  airlines  when  they  wish  to 
correct mistakes in their bookings. Unfortunately, no data are available on the 
number  of  passengers  affected.  In  the  public  consultations,  there  was  general 
support across stakeholder groups that clear spelling mistakes should be easily 
corrected within a short time period (and as long as allowed under applicable 
legislation)  but  consumer  organisations  required  a  more  general  right  (e.g. 
cooling  off  period  within  which  the  consumer  may  decide  to  renounce  the 
booking).  

long delays on the tarmac: while the Regulation also covers delays of flights 
where the passengers are already on board the aircraft, it does not specifically 
refer  to  this  kind  of  situation,  nor  does  it  include  provisions  with  regard  to 
tarmac  delays  on  arrival.  The  problem  is  far  less  frequent  in  Europe  than  in 
North  America;  an  explanation  could  be  the  European  system  of  airport  slot 
regulation, which ensures that the number of flights scheduled does not exceed 
the capacity of the airport infrastructure in normal circumstances. Still, over the 
period  2007-2009,  about  1  million  passengers  annually  were  delayed  on  the 

There  are  no  airline  data  available  on  the  extent  of  rescheduling,  but  the  number  of  inquiries 
received by the Europe Direct Contact Centre (EDCC) gives a rough idea: in 2011, the EDCC 
received 189 inquiries about rescheduling, to be compared to 2680 inquiries about cancellations, 
2709  inquiries  about  delays,  724  inquiries  about  denied  boarding  and  21  inquiries  about 
downgrading. 
A  study  commissioned  by  the  Commission  gives  an  overview  of  existing  practices  and  of  the 
relevant  European  and  national  legislation:  Analyses  of  the  European  air  transport  market: 
airline pricing, ticketing rules an consumer rights, Deutsches Zentrum für Luft- und Raumfahrt 
e.V., June 2009; see annex 

• 

• 

• 

58 

59 

EN 

72 

   EN 

 
                                                 
• 

tarmac  by  1  hour  or  longer.  In  2010,  this  figure  doubled  to  about  2  million, 
most  likely  linked  to  the  ash  cloud  crisis  in  April  2010  and  the  bad  winter 
weather in December of that year. In the public consultation, there were again 
large differences of view, consumers being in favour of clarifying the issue in 
the Regulation, while airlines did not see the need. 

flight  diversion  to  another  airport:  the  Regulation  does  not  explicitly 
mention rights to care/assistance/compensation in case the flight is diverted to 
another  airport.  Given  the  principles  established  by  the  ECJ  in  the  case 
Rodríguez  and  others  v  Air  France60,  where  a  return  of  the  flight  to  the 
departure  airport  is  considered  as  a  cancellation,  it  might  follow  that  an 
unscheduled  diversion  could  also  be  considered  as  a  cancellation.  However, 
this is not explicitly stated in the Regulation and remains uncertain as long as 
the Court has not been seized on such a case. There are no data available with 
regard  to  flight  diversions.  The  public  consultation  showed  again  large 
disagreement between consumers and airlines, the former considering that the 
issue needs clarification while the latter did not see the need to do so.  

60 

Case C-83/10 

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ANNEX 5: Complaint handling by NEBs 

Table 18: Complaint handling by NEBs between 2007 and 2011 - overview 

Complaints 
received in total 

Delay 

Cancellation 

Denied 
Boarding 

Others 

Number of 
cases closed 

2007 

41 740 

8 543 

10 260 

2 357 

4 828 

2008 

2009 

2010 

39 277 

9 414 

10 369 

2 670 

9 295 

33060 

8 875 

14 409 

3 609 

5 312 

80 832 

15 426 

47 731 

2 902 

10 433 

na 

Number of 
cases engaged 
for 
sanctioning 

185 

308 

1 075 

na 

7 726 

9 448 

8 484 

2011 

Not yet complete (see next table) 

Na = non available 

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Table 19: Complaint handling 2011 – detailed view 

2007 

Complaints 
received in total 

Delay 

Cancellation 

Denied 
Boarding 

Others 

Number of 
cases closed 

Number of cases 
engaged for 
sanctioning 

174 

1040 

AT 

BE 

BG 

CY 

CZ 

DE 

DK 

ET 

EL 

ES 

FI 

FR 

HU 

IE 

IT 

LT 

LV 

LU 

MT 

NL 

PL 

PT 

RO 

SK 

SV 

4563 

2419 

1747 

297 

100 

1062 

1385 

120 

146 

190 

364 

476 

na 

59 

90 

80 

na 

22 

37 

91 

48 

na 

14 

7 

19 

na 

28 

556 

na 

291 

na 

181 

na 

na 

65 

151 

52 

124 

2933 

2195 

6454 

na 

35 

45 

na 

9 

254 

na 

173 

na 

64 

na 

na 

24 

23 

18 

58 

1664 

980 

1561 

na 

18 

15 

na 

12 

153 

na 

92 

na 

80 

na 

na 

21 

47 

17 

40 

362 

726 

915 

na 

6 

13 

na 

6 

28 

na 

20 

na 

9 

na 

na 

6 

10 

2 

3 

62 

62 

409 

na 

2 

4 

na 

25 

12 

0 

na 

1 

121 

na 

na 

na 

28 

na 

na 

0 

43 

15 

23 

na 

47 

na 

104 

65 

186 

805 

na 

na 

na 

na 

266 

na 

118 

na 

na 

14 

25 

37 

105 

na 

na 

3569 

9231 

na 

9 

13 

na 

14 

25 

0 

na 

0 

na 

2 

68 

na 

7 

32 

na 

na 

na 

9 

na 

na 

47 

na 

na 

0 

na 

Na 

5 

na 

5 

6 

EN 

75 

   EN 

 
SE 

UK 

Total 

na 

3986 

na 

na 

1294 

na 

na 

na 

na 

na 

255 

na 

na 

30 

na 

na 

na 

na 

na 

11 

na 

EN 

76 

   EN 

 
 
ANNEX 6: Competition with other modes and with non-EU carriers 

Competition with other modes 

Rail is likely to represent the most serious competition to air, given its speed, frequency 
and  convenience;  although  coaches  and  ferries  may  offer  viable  options  in  isolated 
cases, or for particular types of passenger.  

However,  where  air  travel  offers  a  faster  alternative  most  passengers  are  unlikely  to 
wish  to  travel  for  longer  than  4  hours,  which  means  that  the  rail  option  is  only  really 
feasible  for  journeys  within  the  EU.  In  order  to  assess  the  potential  for  distortion  of 
competition  with  rail,  the  top  50  intra-EU  city  pairs  measured  in  terms  of  total  seats 
scheduled in May 2012 (representing 18% of all intra EU city pairs) were analysed. On 
7 of these 50 routes rail journey times are typically less than 4 hours. Almost all of these 
routes  are  domestic,  and  therefore  Member  States  have  the  option  of  exempting  rail 
services from Regulation 1371/2007; this suggests that Regulation 261/2004 might lead 
to a distortion of competition on a minority of routes. However: 

• 

• 

In  practice,  of  the  largest  Member  States,  only  the  UK  and  France  have 
exempted domestic long distance rail services from this Regulation, and some 
Member  States  have  national  laws  or  policies  on  compensation  or  assistance 
for rail passengers which are more generous than the Regulation (particularly 
Spain). 

For many network airlines, most passengers on these very short intra-EU routes 
are carried in order to ‘feed’ the wider network, and therefore competition with 
rail is not relevant. Any costs incurred by the Regulation on these short routes 
become insignificant in comparison to the long-haul routes they serve. 

The proportion of routes on which coach services are viable competitors is likely to be 
even smaller, as in the vast majority of cases the journey times of coaches are even less 
competitive  than  those  of  rail  services.  However,  some  competition  may  exist  at  the 
margins for the most price-sensitive travellers, and again the difference in burden faced 
by the two types of operator may to some extent depend on the origin and destination of 
the  route  concerned.  In  addition,  Member  States  are  permitted  to  exempt  domestic 
services  from  the  application  of  most  of  the  Articles  of  Regulation  181/2011,  and 
therefore there is potential for competition to be distorted albeit in quite limited cases. 

Similarly, although ferries would rarely offer competitive journey times in comparison 
with air, there are isolated instances where this might be the case – for example, on the 
Helsinki  –  Tallinn  route  the  2  hour  journey  time  offered  by  the  ferry  service  may  be 
faster  than  the  30  minute  air  journey  time  when  waiting  times  and  travel  to/from  the 
airports  are  included.  In  other  cases  ferry  services  may  be  preferred  for  reasons  other 
than price – for example, for holidaymakers may use ferries as they wish to take their 
car with them. Therefore, again there is some potential for competition to be distorted, 
but the proportion of European air traffic this impacts is likely to be very low. 

Competition with non-EU airlines 

There  is  most  likely  to  be  distortion  of  competition  between  EU  and  non-EU  carriers 
operating flights into the EU, as the provisions of the Regulation do not apply to non-
EU carriers. To assess the extent of competition between EU and non-EU carriers, we 
analysed  routes  to  and  from  the  EU  to  identify  on  what  proportion  EU  and  non-EU 
carriers competed directly. The table below shows the share of routes operated by EU 

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carriers to the EU from outside, together with the number of these routes on which non-
EU carriers compete. 

Table 20: Analysis of routes to and from EU, May 2012 schedules 

All routes into EU 

Routes 

1,998  

Flights 

Seats 

69,877  

14,362,968  

EU carrier-operated flights into EU 

1,384 

34,787 

7,406,845 

EU  carrier-operated  flights  to  the  EU  on 
routes shared with non-EU carriers 

458 

18,381 

4,035,142  

As  %  of  all  flights  to  the  EU  operated  by 
EU carriers 

33% 

53% 

54% 

On  more  than  half  of  services  into  the  EU  operated  by  EU  carriers,  there  is  direct 
competition  from  non-EU  carriers.  142  million  passengers  per  year  travel  on  EU 
carriers’  flights  outside  the  EU,  on  routes  shared  with  non-EU  carriers,  equivalent  to 
17% of all passengers on flights to, from or within the EU. Even where there is no direct 
competitor, indirect services also often provide competition on non-EU routes. 

An  EU  airline  competing  directly  with  a  non-EU  airline  could  either  absorb  the  cost, 
reducing its profit margin, or pass it through to passengers. The consultant's modelling 
shows  that,  for  a  long  haul  route  into  the  EU  operated  by  a  large  EU  traditional 
scheduled  carrier,  the  average  cost  of  the  Regulation  over  the  period  was  €1.63  per 
passenger,  and  the  average  fare  €678  per  passe nger.  If  all  the  costs  of  the  Regulation 
were added to the fare, the average fare might be increased by 0.24% relative to a non-
EU carrier. 

To calculate the potential impact on demand, a cross elasticity was used to calculate the 
impact  of  the  fare  increase  applied  by  the  EU  carrier,  in  terms  of  the  percentage  of 
passengers  which  might  switch  to  non-EU  carriers’  services.  Unfortunately,  although 
there  is  significant  published  research  on  overall  price  elasticities  of  demand,  no 
published  research  on  cross-elasticities  between  carriers was  found.  However,  given  a 
route level price elasticity is -1.461, the cross elasticity might be expected to be in the 
range -1.0 to -2.0. Consequently, the additional €1.63 charged by the EU carrier could 
result  in  a  loss  of  between  0.24%  and  0.48%  of  its  passengers  to  the  EU.  However, 
since virtually all long haul passengers buy return tickets, and the Regulation applies to 
both EU and non-EU airlines from the EU, the overall reduction in volumes would be 
0.12% to 0.24%.  

This  analysis  indicates  that  the  Regulation  could  in  principle  impact  on  competition 
between EU and non-EU carriers, but this impact appears to remain limited. 

61 

Source: IATA economic briefing 

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ANNEX 7: Relation between Regulation 261/2004 and other EU and international 
law 

The total cost of the correct application of Regulation 261/2004 has been estimated as 
the  incremental  cost  of  airline  policies  that  would  be  followed  in  the  absence  of 
Regulation 261/2004. The consultant assessed airline polices in the absence of a legal 
framework  (by  looking  at  airlines  in  Europe  before  2004  and  at  airlines  operating  in 
other similarly developed aviation markets but without passenger protection legislation) 
and  assessed  how  general  EU  consumer  law  would  apply  to  airline  policies  in  the 
absence of Regulation 261/2004. 

If  the  Regulation  was  repealed,  there  would  still  be  some  minimum  standards  of  air 
carrier behaviour as a result of: 

• 

• 

Directive 93/13/EC on unfair contract terms; and 

the Montreal Convention and Regulation 2027/97. 

Passengers who were not transported, because their flight was cancelled or because they 
were denied boarding, would most probably have a right to either rerouting or refund in 
any event (any restriction on this would be most likely to be an unfair contract term and 
thus  be  unenforceable  –  at  any  rate  where  the  cancellation  was  within  the  carrier's 
control). 

Passengers  would  not  have  any  automatic  right  to  assistance,  such  as  refreshments  or 
hotel accommodation. However, it could be considered to be an unfair contract term if 
passengers’ right to claim for costs of assistance (i.e. their damages resulting from the 
carrier’s  breach  of  contract)  was  restricted  in  circumstances  where  the  carrier  was 
responsible for the delay or cancellation. 

The  Montreal  Convention  provides  a  right  to  compensation  in  the  event  of  delay. 
However,  the  passenger  would  need  to  prove  that  he/she  had  suffered  a  loss,  and  the 
Convention  would  provide  the  carrier  with  a  defence  if  it  could  prove  that  it  and  its 
servants  and  agents  took  all  necessary  measures  that  could  reasonably  be  required  to 
avoid the damage or that it was impossible for them to take such measures. This defence 
is  relatively  easy  for  carriers  to  establish  where  the  delay  is  for  reasons  beyond  their 
control  and,  in  any  case,  experience  has  shown  that  there  have  been  relatively  few 
claims  by  passengers  on  this  basis  both  due  to  the  need  to  prove  financial  loss  and 
because of the existence of the Regulation. 

It is less clear what rights there would be to compensation in the case of cancellation as 
this  is  not  covered  by  the  Montreal  Convention.  Passengers  could  still  claim  against 
carriers for breach of contract under national law, but it is likely that they would have to 
prove a loss and a carrier could defend a claim on the basis that it was not responsible 
for  the  cancellation.  Any  term  in  Conditions  of  Carriage  which  restricted  carriers’ 
obligations beyond this would probably be an unfair contract term. In the case of denied 
boarding it would be harder for the carrier to prove that it was not responsible for the 
breach of contract but the passenger would still have to prove a loss in order to obtain 
compensation.  

The  consultant  has  assumed  that  if  the  Regulation  was  repealed,  airlines  would  on 
average provide the minimum service level required for compliance with other EU law. 
The  only  exception  to  this  is  that  some  fixed  compensation  would  be  paid  for  denied 
boarding, partly because it would be easier in this case for the passenger to prove that 

EN 

79 

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the  carrier  was  responsible,  but  this  compensation  would  not  exceed  the  price  of  the 
ticket. 

On this basis, for the purpose of quantifying the economic cost of the Regulation, it was 
assumed  that  if  the  Regulation  was  repealed  the  airlines  would  on  average  apply  the 
policies in the following table. 

Table 21: Likely airline policies in the absence of Regulation 261/2004 

Disruption type 

Policy 

If flight cancelled for reasons that the airline defines as being within its control, it would offer the passenger 
a choice of:  

alternative service on same carrier subject to availability;  

a refund. 

Cancellation 

The refund would be the fare paid, if no portion used; otherwise at least the difference between fare paid and 
applicable fare for the segment(s) used. No administration fee is charged. 

The airline would also provide a voucher for care, and pay for overnight accommodation where necessary (or 
reimburse reasonable costs).  

For cancellations outside the airline’s control, the airline would provide either rerouting or a refund, but it 
would  be  at  its  discretion  which  of  these  was  provided.  There  would  be  no  payment  for  care  or 
accommodation. 

The carrier would have no further obligation except as otherwise provided by the Montreal Convention, and 
therefore in most circumstances no compensation would be payable. 

If the airline fails to operate a flight within 5 hours of the schedule, for reasons that it defines as being within 
its control, it would offer the passenger a refund if he/she did not wish to travel.  

The refund would be the fare paid, if no portion used; otherwise at least the difference between the fare paid 
and the applicable fare for segment(s) used. No administration fee would be charged. 

Delay 

The airline would also provide a voucher for care and pay for overnight accommodation where necessary (or 
reimburse reasonable costs).  

For  delays  outside  the  airline’s  control,  there  would  be  no  option  of  a  refund  and  no  payment  for  care  or 
accommodation. 

The carrier would have no further obligation except as otherwise provided by the Montreal Convention, and 
therefore in most circumstances no compensation would be payable. 

First  the  airline  would  seek  volunteers,  who  would  be  offered  incentives  according  to  airline  policy.  For 
modelling  purposes  we  have  assumed  that  this  would  include  a  refund  or  rerouting,  plus  compensation 
equivalent to 50% of the ticket price with a maximum of €200. 

For passengers denied boarding involuntarily, the airline would offer the passengers a choice of:  

alternative service on same carrier subject to availability; or 

a refund. 

Denied 
boarding 

The refund would be the fare paid, if no portion used; otherwise at least the difference between the fare paid 
and the applicable fare for segment(s) used. No administration fee would be charged. 

The  airline  would  provide  a  voucher  for  care  and  pay  for  overnight  accommodation  where  necessary  (or 
reimburse reasonable costs).  

In  addition  the  airline  would  provide  compensation.  This  compensation  would  be  equivalent  to  the  ticket 
price except that it would not exceed a given amount (for modelling purposes we have assumed €400). 

The carrier would have no further obligation except as otherwise provided by the Montreal Convention, and 
therefore in most circumstances no other compensation would be payable. 

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Disruption type 

Policy 

For downgrading within the carrier’s control, affected passengers would be offered the choice of:  

alternative service in the original class on the same carrier subject to availability; or  

Downgrading 

a refund of the difference in fare between the original class and the downgraded class. 

Where downgrading is for reasons which the airline determines as being outside the its control, the choice 
between these may be at the carrier’s discretion.  

No voucher for care or overnight accommodation would be offered. 

Tarmac delays 

No provisions – rare occurrence in EU. 

Source: 2012 SDG Study 

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ANNEX 8a: Underlying assumptions of the baseline scenario 

Traffic growth 

Overall  air  traffic  is  assumed  to  increase  at  the  rate  specified  in  the  Airbus  Global 
Market Forecast.  

With  respect  to  specific  traffic  categories,  it  is  assumed  that  on  the  basis  of  recent 
trends,  for  intra-EU  flights  of  less  than  1,500km,  only  low  cost  carriers  (LCCs)  will 
experience  growth.  In  addition,  given  the  long-term  trends  towards  passengers 
arranging  their  own  travel  itineraries,  charter  traffic  is  assumed  not  to  grow  on  any 
category of route. 

For  other  market  segments,  future  demand  is  estimated  using  Airbus’  Global  Market 
Forecast. The Forecast provides an average growth rate between pairs of regions, which 
is assumed to remain constant for each year covered by the impact assessment. Data for 
passengers (from Eurostat) and for seats (from OAG) are used to estimate current total 
passengers for each flow and carrier type. Airbus’ growth rates are then disaggregated 
by carrier type, such that the growth for the carrier types for which growth is assumed to 
occur  exceed  the  average  for  the  inter-regional  flow,  whilst  at  the  total  level  the  flow 
grows at the average rate estimated by Airbus.  

The forecast was benckmarked against Eurocontrol STATFOR long- and medium-term 
forecasts,  and  have  found  it  to  be  generally  slightly  more  conservative,  although  the 
difference is small, averaging 0.4% each year for both forecasts.  

Trends in disruption 

For all types of disruption it is assumed that the rate of disruption in future years will 
remain constant within each market segment, at the average for 2007-9. The basis for 
this  assumption  is  a  review  of  historic  disruption  data  which  indicated  no  discernible 
trend. 2010 is excluded due to the extraordinary effects of the volcanic ash crisis and the 
other disruption that year. The absolute number of passengers affected therefore grows 
at the same rate as overall traffic for each carrier and route type. In total, the number of 
cancellations increases slightly faster than the number of long delays (due to statistical 
effects  such  as  the  declining  market  share  of  charter  carriers  which  basically  have  no 
cancellations). 

Trends in complaint rates and NEB costs 

It  is  assumed  that  complaint  rates  remain  constant  on  a  per-passenger  basis,  and 
consequently  that  the  absolute  number  of  complaints  increases  in  line  with  traffic. 
Notwithstanding  any  potential  scope  for  efficiencies  we  assume  that  NEB  operating 
costs are related to the number of complaints, and therefore the impact of any options 
which relate to NEB complaint handling will also increase in line with traffic.  

Claim rates 

It  is  likely  that  the  current  10%  claim  rates  for  compensation  for  delays  and 
cancellations will increase, due to improved awareness of passengers' rights under the 
Regulation,  increased  activity  by  commercial  claims  agencies,  and  potentially 
introduction  of  measures  on  collective  consumer redress in some Member States. It is 
not  possible  to  know  how  much  of  an  increase  these  factors  will  generate,  and  as  the 
data  on  claim  rates  we  have  is  limited,  it  is  not  possible  to  extrapolate  from  current 
trends. Therefore, an indicative 0.5% annual increase in the claim rate is assumed.  

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There is no change assumed to the claim rate for refunds for delays over 5 hours – most 
passengers are assumed still to wish to travel. 

Inflation and discounting 

Future costs are modelled in real 2010 terms. For most cost types, rates remain constant 
in real terms,  so  for most cost items no inflation is applied; historically air fares have 
fallen in real terms but due to carbon pricing and increased fuel prices, it is unclear this 
will be the case in future.  

However,  this  means  that  any  costs  which  are  fixed  in  nominal  terms  have  to  be 
deflated. The only example of such a cost is fixed compensation of the type currently 
specified in the Regulation. The inflation rates applied in the impact assessment model 
are derived from the European Central Bank’s inflation forecast of December 2011. A 
4% discount rate is used to calculate net present values (NPVs) of impacts62.  

Results 

If the Regulation is not amended, it is estimated that the incremental compliance cost of 
the legislation on airlines will increase from €0.9 billion on average over 2007-2009 to 
€1.7 billion in 2025, mostly due to traffic growt h. As a share of airline revenue, the cost 
will increase from 0.6% to 0.7%.  

Almost  all  of  the  compliance  cost  is  carried  by  airlines  (and  ultimately  passengers 
through  higher  fares)  but  costs  are  also  incurred  for  States,  due  to  the  requirement  to 
establish  and  fund  NEBs.  It  is  estimated  that  the  cost  for  States  will  increase  from 
approximately  €27  million  now  (assuming  fu ll  complaint  handling)  to  €46  million  by 
2025. 

62 

Source: European Commission Impact Assessment Guidelines, Annex 11.6 

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ANNEX 8b: Underlying assumptions of cost calculations 

Introduction 

This  annex  describes  the  process  undertaken  in  the  2012  SDG  study  to  model  the 
current  economic  cost  of  the  legislation.  The  first  stage  comprises  the  disruption 
database, which calculates the number of passengers affected by each type of disruption. 
The  second  stage  involves  evaluating  the  cost  of  the  obligations  stipulated  by  the 
legislation. These obligations are then applied to the disruption types being evaluated to 
obtain  a  cost  by  disruption  type.  The  application  of  the  costs  varies  according  to  the 
assumptions behind each of the scenarios that have been modelled. 

The focus is on the cost generated for airlines by the types of disruption specified in the 
Regulation,  which form by  far the  largest  element of the total cost.  NEB  enforcement 
costs are discussed separately in the final section of this appendix.  

Unless otherwise stated, use of the term ‘EU’ refers to the 27 members of the EU plus 
Iceland,  Norway  and  Switzerland.  The  flight  disruption  and  economic  burden  models 
cover all of these States. 

Flight disruption database 

Flight and passenger numbers 

Calculating the impact of disruption requires a complete record of passenger numbers, 
broken down by flight and carrier types, to which disruption data can be applied. This is 
based on flight and passenger numbers at EU airports, provided by Eurostat. For EU 27 
countries,  the  Eurostat  data  is  sufficiently  detailed  to  allow  a  distinction  between 
domestic flights, flights to other EU countries and flights to destinations outside the EU. 
For the other States, similar data from national organisations (Avinor, Statistik Schweiz 
and Statistics Iceland) allows to obtain the required level of detail. 

Although  Eurostat  provides  figures  for  domestic,  EU  and  non-EU  flights,  it  does  not 
include  Norway,  Iceland  or  Switzerland  in  its  definition  of  the  EU.  SDG  therefore 
applied  an  adjustment  so  that  the  ‘EU’  category  includes  routes  to/from  these  States. 
The adjustment is based on the relative number of seats and flights for these States in 
the schedule data provided by OAG. 

Table 22: Total number of flights and passengers used in the consultant's model 

2007 

2008 

2009 

2010 

Flights 

8,884,662 

8,876,521 

8,167,538 

8,131,834 

Passengers 

849,355,876 

853,387,770 

800,981,473 

831,476,369 

Source: SDG 2012 study 

The  OAG  data  provides  information  on  the  number  of  flights  and  seats  operated  by 
route  and  carrier.  This  allows  a  more  detailed  categorisation  of  flights  to  include 
distance  bands  that  match  those  used  in  the  Regulation.  Using  this  data,  carriers  have 
also been allocated to one of fourteen carrier types, based on three characteristics: 

• 

• 

EN 

Business  model  (Regional,  Charter,  Low  Cost  Carrier  (LCC),  Traditional 
Scheduled); 

Area of registration (EU, Non-EU); and 

84 

   EN 

 
 
 
• 

Size of operations within the EU (Large or Small). 

The categories used for the business model and area of registration characteristics match 
those used in the Eurocontrol eCODA data on departure delays. 

Regional  carriers  are  assumed  to  be  those  carriers  who,  on  average,  operate  routes 
shorter than 1,500km and with fewer than 100 seats on each flight. 

Large carriers comprise the 20 carriers with the highest number of seats flown in 2010; 
all  other  carriers  are  categorised  as  Small.  This  distinction  is  used  because  no  airline 
operating a significant number of services would meet the normal categorisation for an 
SME (less than 250 employees). 

The  categories  used  are  summarised  in  the  table  below.  Combining  the  two 
classification systems yields 126 combined flight and carrier types which form the level 
of disaggregation of our analysis. 

Table 23: Flight and carrier classification based on OAG data 

Flight and destination types 

Carrier types 

National <1500km 

Large Regional EU 

National 1500-3500km 

Large Regional Non-EU 

National >3500km 

Small Regional EU 

EU <1500km 

EU 1500-3500km 

EU >3500km 

Non-EU <1500km 

Small Regional Non-EU 

Charter EU 

Charter Non-EU 

Large LCC EU 

Non-EU 1500-3500km 

Large LCC Non-EU 

Non-EU >3500km 

Small LCC EU 

Small LCC Non-EU 

Large Traditional Scheduled EU 

Large Traditional Scheduled Non-EU 

Small Traditional Scheduled EU 

Small Traditional Scheduled Non-EU 

Charter flights 

Since  Eurostat  data  includes  charter  flights  while  OAG  data  does  not,  the  consultant 
required  further  information  on  charter  flights  to  enable  a  reconciliation  between  the 
two data sources. 

Eurocontrol  data  allows  to  calculate  the  proportion  of  all  flights  that  are  classified  as 
charter  flights  by  airport  and  route  type.  Data  for  Norwegian,  Icelandic  and  Swiss 
airports  is  available  only  at  an  airport  level  (not  by  route  type).  For  these  countries, 
SDG has applied a weighted average to obtain the proportion of charter flights for each 

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flight type. Spanish airport data from AENA provides a breakdown of charter flights by 
carrier, from which SDG has calculated the proportion of charter flights operated by an 
EU-domiciled  carrier  for  each  year.  These  factors  have  been  applied  to  all  charter 
flights. 

Table 24: Charter flights by carrier domicile 

Proportion of charter flights on 
EU carriers 

Proportion of charter flights on 
Non-EU carriers 

96% 

97% 

97% 

97% 

4% 

3% 

3% 

3% 

Year 

2007 

2008 

2009 

2010 

Load factors 

A variety  of sources have been  used  to calculate the load factors  by  flight  and  carrier 
type. This data is available for 2008 and 2009; a weighted average of the two years has 
been  applied  to  all  four  years  on  the  assumption  that  load  factors  have  remained 
constant  over  the  period.  The  load  factors  were  adjusted  to  ensure  that  the  passenger 
numbers match those provided by the Eurostat data. 

Table 25: Load factors by carrier type and route length 

Carrier type and route length 

Load factor 

Charter <1500km 

Charter 1500-3500km 

Charter >3500km 

LCC <1500km 

LCC 1500-3500km 

LCC >3500km 

Regional <1500km 

Regional 1500-3500km 

Regional >3500km 

Traditional scheduled <1500km 

Traditional scheduled 1500-3500km 

Traditional scheduled >3500km 

85.9% 

88.3% 

87.8% 

76.6% 

84.9% 

83.1% 

61.4% 

70.0% 

57.5% 

68.9% 

71.6% 

77.5% 

National  data  sources  for  the  UK  (CAA),  Italy  (ENAC),  Spain  (AENA),  Portugal 
(INAC) and France (DGAC) were used to obtain the average number of passengers per 
charter flight. Weighted average figures have been used for all countries: 

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Table 26: Charter flights passenger loading 

Year 

2007 

2008 

2009 

2010 

Average  number 
of  passengers  per 
charter flight 

91 

88 

87 

99 

Final flight and passenger numbers 

By  the  application  of  the  load  factors  and  adjustments  for  charter  flights  two  key 
datasets were obtained: 

• 

• 

The number of flights by route and carrier type in each year; and 

The number of passengers by route and carrier type in each year. 

These two outputs were then combined to calculate the number of passengers per flight 
by route and carrier type in each year. 

Departure Delay 

Departure  delay  rates  by  route  type  and  carrier  type  have  been  obtained  from 
Eurocontrol eCODA data, which provides the proportion of flights in each category that 
were delayed, broken down into ten delay time bands. These proportions were applied 
to the total flight numbers in each route and carrier category. Using the passengers per 
flight data, SDG then calculated the number of passengers affected by delays in each of 
the ten time bands, by route and carrier type: 

Table 27: Total number of passengers by delay time band 

Delay time band 

2007 

2008 

2009 

2010 

Delay < 60 mins 

799,941,444  

806,575,332  

765,686,555  

773,236,179  

Delay > 60 mins 

49,414,433  

46,812,438  

35,294,917  

58,240,190  

Delay > 120 mins  15,141,197  

14,491,552  

11,800,846  

21,106,978  

Delay > 180 mins  6,893,665  

6,896,591  

5,600,730  

10,422,270  

Delay > 240 mins  3,770,330  

3,897,191  

3,122,383  

5,837,397  

Delay > 300 mins  2,166,654  

2,539,871  

1,996,811  

3,825,507  

Delay > 360 
mins 

Delay > 480 

1,556,331  

1,819,443  

1,405,955  

2,743,211  

829,030  

1,168,782  

854,852  

1,695,589  

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mins 

Delay > 720 
mins 

Delay > 1440 
mins 

372,980  

683,545  

541,900  

982,132  

20,755  

20,584  

73,932  

126,508  

Total 

849,355,876  853,387,770  800,981,473  831,476,369 

Cancellations 

The number of cancelled flights is based on:  

• 

• 

• 

the quarterly AEA Consumer Reports available for 2007 and 2008;  

ERA traffic and punctuality reports available for all four years 2007-10; and 

Data submissions provided by six airlines.  

These  sources  enabled  SDG  to  aggregate  the  responses  according  to  carrier  type. 
However,  although  AEA  differentiates  between  Short/Medium-Haul  and  Long  Haul, 
none of the sources provide sufficient detail to calculate an average by route type. 

SDG  therefore  used  three  additional  sources  of  cancellation  data  (UK  CAA,  Oslo 
Lufthavn,  and  the  Spanish  slot  coordinator)  to  apportion  the  figures  from  AEA,  ERA 
and the airline submissions between the route categories.  

For some route and carrier type combinations, this process did not yield a sufficiently 
large sample to obtain reasonably valid cancellation rates. In these situations, the rates 
from comparable types were applied, adjusting them as necessary. Suitable comparators 
were determined according to a list of priorities: 

• 

• 

• 

• 

Same carrier type; 

Same distance band; 

Same area of registration (EU or Non-EU); and  

Same carrier size. 

The cancellation rates refer to the number of flights so, as with departure delay figures, 
SDG  used  flight  and  passengers  per  flight  data  to  calculate  the  number  of  affected 
passengers.  

Since  some  costs  associated  with  cancellations  will  depend  on  the  time  taken  for  the 
affected  passengers  to  be  rerouted,  SDG  have  calculated  the  delay  to  passengers’ 
journeys  that  will  be  caused  by  a  cancellation.  For  each  origin-destination  pair,  SDG 
used OAG data to calculate the average number of hours between flights on the same 
city pair and operated by the same carrier or one of its codeshare partners. This is then 
applied to the flight and carrier types, weighted by the number of flights operated on the 
routes.  

Indirect routes were not explicitly considered as it was not practical to do so; identifying 
all the potential indirect routing options would have resulted in a very large number of 
route  options  and  would  be  beyond  the  capability  of  the  spreadsheet-based  model. 

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However,  although  SDG  have  not  explicitly  considered  indirect  routes,  they  have  in 
effect assumed rerouting via indirect routes with respect to very low frequency routes: 

• 

• 

routes less than 1,500km which operate less than daily; and 

other routes which operate less than weekly. 

In these cases the waiting times for rerouting on direct flights would be very long, so it 
is  assumed  that  the  passengers  are  rerouted  after  the  same  waiting  time  as  for  other 
routes of equivalent length; this could only be via an indirect flight. 

The mean wait time between successive flights is doubled to reflect the likelihood that, 
given  typical  load  factors  are  around  75%,  only  a  proportion  of  passengers  on  a 
cancelled  flight  can  be  rerouted  onto  the  next  flight.  These  wait  times  were  then 
averaged by carrier and route type, and allocated to one of the ten time bands used in the 
delay data.  

Table 28: Distribution of wait times in the event of cancellations 

Delay time band 

2007 

2008 

2009 

2010 

Delay < 60 mins 

Delay 60-119 mins 

2.2% 

1.4% 

Delay 120-179 mins 

2.0% 

Delay 180-239 mins 

4.0% 

Delay 240-299 mins 

2.6% 

Delay 300-359 mins 

2.3% 

Delay 360-479 mins 

8.5% 

Delay 480-719 mins 

14.2% 

Delay 720-1439 mins 

34.1% 

Delay > 1440 mins 

28.7% 

0.7% 

1.7% 

2.3% 

3.8% 

5.4% 

3.0% 

9.8% 

17.0% 

34.8% 

21.4% 

0.8% 

0.8% 

1.8% 

2.7% 

3.9% 

3.7% 

7.2% 

14.4% 

36.3% 

28.4% 

1.0% 

0.9% 

1.4% 

3.0% 

3.8% 

3.9% 

7.8% 

14.6% 

32.8% 

30.8% 

Tarmac delay 

The analysis of tarmac delays is based primarily on Eurocontrol eCODA’s average taxi-
in and taxi-out times for all European airports. Since the definitions of taxi-in and taxi-
out  times  do  not  include  any  delay  between  passengers  boarding  and  alighting  and 
off/on  block  times,  the  consultant  used  airline  contributions  to  apply  an  uplift  to  take 
this into account. 

Two  traditional  scheduled  airlines  provided  tarmac  delay information.  SDG  compared 
the proportions of flights in each tarmac delay time band from their submissions to the 
corresponding  figures  in  the  Eurocontrol  data  and  calculated  one  factor  for  each  time 
band,  which  was  applied  to  the  entire  Eurocontrol  dataset.  No  distinction  was  made 
between different years. 

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The table below shows the number of passengers affected by tarmac delays of different 
durations. 

Table 29: Passengers affected by tarmac delays 

Delay time band 

2007 

2008 

2009 

2010 

Delay < 60 mins 

848,338,429  

852,339,329  

799,903,629  

829,388,998  

Delay > 60 mins 

1,017,447  

1,048,440  

1,077,844  

2,087,371  

Delay > 120 mins 

86,248  

51,804  

76,679  

168,069  

Delay > 180 mins 

29,439  

6,619  

18,039  

55,078  

Delay > 240 mins 

23,457  

1,795  

10,811  

34,066  

Total 

849,355,876 

853,387,770 

800,981,473 

831,476,369  

Denied boarding 

Seven airlines provided data on the number or proportion of passengers who have been 
denied boarding. If data was missing for some years, an average of the available years’ 
data was used. Four airlines did not differentiate in the data provided between voluntary 
and involuntary denied boarding; in these cases, an average from the other airlines was 
applied to the airline’s overall denied boarding rate. 

The  United  States  Department  of  Transportation  provides  denied  boarding  figures  for 
all US airlines. Although SDG did not use these figures directly, it included these in the 
averages  used  to  apportion  between  voluntary  and  involuntary  denied  boarding  when 
European airlines did not supply this level of detail. 

The  denied  boarding  rates  were  averaged  by  carrier  type,  and  on  the  basis  of  the 
discussions at the bilateral interviews charter airlines were assumed to have no cases of 
denied  boarding.  The  rates  were  applied  directly  to  the  number  of  passengers  in  each 
route and carrier category.  

Table 30: Voluntary denied boarding rates used in the model 

2007 

2008 

2009 

2010 

Large Regional EU 

0.010% 

0.010% 

0.009% 

0.014% 

Large Regional Non-EU 

0.010% 

0.010% 

0.009% 

0.014% 

Small Regional EU 

0.010% 

0.010% 

0.009% 

0.014% 

Small Regional Non-EU 

0.010% 

0.010% 

0.009% 

0.014% 

Charter EU 

Charter Non-EU 

Large LCC EU 

- 

- 

- 

- 

- 

- 

- 

- 

0.001% 

0.001% 

0.001% 

0.001% 

Large LCC Non-EU 

0.001% 

0.001% 

0.001% 

0.001% 

Small LCC EU 

0.001% 

0.001% 

0.001% 

0.001% 

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Small LCC Non-EU 

0.001% 

0.001% 

0.001% 

0.001% 

Large Traditional Scheduled EU 

0.033% 

0.028% 

0.027% 

0.027% 

Large Traditional Scheduled Non-EU 

0.033% 

0.028% 

0.027% 

0.027% 

Small Traditional Scheduled EU 

0.033% 

0.028% 

0.027% 

0.027% 

Small Traditional Scheduled Non-EU 

0.033% 

0.028% 

0.027% 

0.027% 

Table 31: Involuntary denied boarding rates used in the model 

2007 

2008 

2009 

2010 

Large Regional EU 

0.010% 

0.009% 

0.008% 

0.013% 

Large Regional Non-EU 

0.010% 

0.009% 

0.008% 

0.013% 

Small Regional EU 

0.010% 

0.009% 

0.008% 

0.013% 

Small Regional Non-EU 

0.010% 

0.009% 

0.008% 

0.013% 

Charter EU 

Charter Non-EU 

Large LCC EU 

- 

- 

- 

- 

- 

- 

- 

- 

0.001% 

0.001% 

0.001% 

0.001% 

Large LCC Non-EU 

0.001% 

0.001% 

0.001% 

0.001% 

Small LCC EU 

0.001% 

0.001% 

0.001% 

0.001% 

Small LCC Non-EU 

0.001% 

0.001% 

0.001% 

0.001% 

Large Traditional Scheduled EU 

0.044% 

0.036% 

0.036% 

0.035% 

Large Traditional Scheduled Non-EU 

0.044% 

0.036% 

0.036% 

0.035% 

Small Traditional Scheduled EU 

0.044% 

0.036% 

0.036% 

0.035% 

Small Traditional Scheduled Non-EU 

0.044% 

0.036% 

0.036% 

0.035% 

Some costs associated with passengers denied boarding vary according to the time that 
affected  passengers  must  wait  before  being  rerouted.  The  average  wait  time  was 
calculated  using  OAG  data  as  described  above  for  cancellations.  Since  the  number  of 
denied  boarders  is  likely  to  be  small,  SDG  have  assumed  that  all  affected  passengers 
will  be  accommodated  on  the  next  flight  with  the  same  airline  or  a  similar  type  of 
carrier. The average wait time therefore equals the time between successive flights. 

Downgrading 

Three  traditional  scheduled  airlines  provided  data  on  the  proportion  of  passengers 
downgraded in each year. One of them only provided data for two years; an average of 
these figures was applied to the remaining two years.  

Other  categories  of  airline  confirmed  that  downgrading  was  not  an  issue  for  them 
because they only offer one class of travel. 

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We have assumed that all incidents of downgrading occur on services operating outside 
the EU, since on short-haul services airlines can usually reconfigure space as needed by 
moving curtains or dividers.  

A  weighted  average  of  the  figures  from  the  three  traditional  scheduled  carriers  was 
therefore used, adjusted based on the number of seats flown by the airlines to EU and 
non-EU  destinations.  The  adjusted  downgrading  rates  were  applied  directly  to  the 
number of passengers in each route and carrier category. 

Table 32: Number of Downgraded passengers 

Year 

2007 

2008 

2009 

2010 

Total number of 
downgraded passengers 

224,407 

153,332 

109,156 

122,950 

While these figures suggest a downward trend, it is based on a small sample size and we 
would  be  cautious  about  inferring  long-term  trends  from  this.  It  is  possible  that  the 
decline in premium class travel due to the economic crisis may have reduced the need to 
downgrade  passengers  as  premium  classes  are  now  less  likely  to  be  overbooked;  this 
may explain this apparent downward trend. Premium class travel would be expected to 
recover after the crisis and therefore this trend may not continue. It is possible that the 
rise in downgraded passengers in 2010 is related to the volcanic ash crisis. 

Mishandled baggage 

The SITA Baggage Report provides total mishandled baggage numbers as a proportion 
of total passengers for all four years. In order to differentiate between lost, delayed and 
damaged  baggage,  SDG  have  used  submissions  from  the  seven  airlines  that  provided 
the required level of detail in their responses. 

Some  airlines  did  not  provide  enough  detail  about  all  three  categories  of  mishandled 
baggage;  their  data  was  used  for  calculations  in  as  many  categories  as  possible,  and 
excluded  where  necessary.  Most  data  for  mishandled  baggage  was  presented  as  a 
percentage  of  passengers,  but  where  airlines  provided  the  number  of  mishandled  bags 
total  passenger  numbers  were  obtained  from  their  websites  in  order  to  calculate  the 
required percentages. If figures were not available for all four years, an average of the 
available figures for that airline was applied to the missing years.  

The airlines’ submissions were used to calculate the proportion of their total mishandled 
baggage that fall into each of the three categories (lost, delayed, damaged). The average 
split  could  then  be  applied  to  the  total  mishandled  baggage  figures  from  SITA.  This 
proportion  was  used  if  a  carrier  type  was  not  covered  by  the  sample  of  airline 
submissions.  For  those  carrier  types  covered  by  the  airline  submissions,  an  average 
figure was used. 

Thus for each carrier type and each year the number of lost, delayed and damaged bags 
was  obtained  as  a  proportion  of  passengers.  These  rates  were  applied  directly  to  the 
number of passengers in each route and carrier category.  

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Table 33: Number of passengers affected by mishandled baggage 

2007 

2008 

2009 

2010 

Lost 

35,584 

29,211 

20,162 

24,612 

Delayed 

8,194,307 

6,739,360 

4,843,722 

5,584,657 

Damaged 

1,612,776 

1,417,541 

1,157,978 

1,340,179 

Cost assumptions 

Compensation 

Compensation values are as specified in the legislation and no further assumptions have 
been  applied.  The  appropriate  value  of  compensation  to  apply  takes  into  account  the 
route length and the wait time before rerouting can be offered. 

Reimbursement and rerouting 

The cost of the reimbursement specified by Article 8(1)(a) is assumed to be the cost of 
the ticket purchased by the passenger.  

In  order  to  determine  the  average  ticket  price  by  flight  and  carrier  type,  the  financial 
statements  for  a  sample  of  28  airlines  were  analysed,  obtaining  the  average  yield  per 
passenger  kilometre  (total  passenger  revenue  divided  by  total  passenger  kilometres). 
The sample does not cover all carrier types, so the assumptions are: 

• 

• 

• 

Carrier size does not affect the yield per passenger kilometre; 

Non-EU registered charter carriers have the same yield per passenger kilometre 
as EU charter carriers; and 

The average yield from 2007-2009 is a suitable substitute if the 2010 yield is 
not available. 

Table 34: Average yield (€ per pax km) by carrier type 

Carrier type 

2007 

2008 

2009 

2010 

Large Regional EU 

 0.156  

 0.155  

 0.139  

 0.137  

Large Regional Non-EU 

 0.111  

 0.163  

 0.110  

 0.108  

Small Regional EU 

 0.156  

 0.155  

 0.139  

 0.137  

Small Regional Non-EU 

 0.111  

 0.163  

 0.110  

 0.108  

Charter EU 

 0.055  

 0.057  

 0.062  

 0.058  

Charter Non-EU 

 0.055  

 0.057  

 0.062  

 0.058  

Large LCC EU 

 0.059  

 0.049  

 0.045  

 0.044  

Large LCC Non-EU 

 0.050  

 0.053  

 0.180  

 0.070  

Small LCC EU 

 0.059  

 0.049  

 0.045  

 0.044  

Small LCC Non-EU 

 0.050  

 0.053  

 0.180  

 0.070  

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Large Traditional Scheduled EU 

 0.103  

 0.099  

 0.084  

 0.098  

Large Traditional Scheduled Non-EU 

 0.067  

 0.072  

 0.073  

 0.066  

Small Traditional Scheduled EU 

 0.103  

 0.099  

 0.084  

 0.098  

Small Traditional Scheduled Non-EU 

 0.067  

 0.072  

 0.073  

 0.066  

Airline  schedule  data  from  OAG  was  used  to  provide  data  on  the  average  distance  of 
flights  operated  by  each  carrier  type,  a  summary  of  which  is  presented  in  the  figure 
below.  Some  short  term  trends  are  visible,  particularly  the  increase  in  sector  lengths, 
although in other cases the trends tend not to have persisted over the whole period from 
2005 to 2012. We have assumed that average flight lengths do not change within each 
of the distance categories modelled (flights less than 1,500km; 1,500-3,500km; and over 
3,500km),  but  overall  flight  lengths  for  some  carriers  will  change  due  to  the  different 
rates  of  traffic  growth  for  different  distance  categories  (overall  longer  distance  traffic 
grows faster so average sector lengths are assumed to continue to increase). Combining 
the yield per passenger kilometre and the average distance provides the average ticket 
price for each route and carrier type. 

Change in average distance flown 2005-2012 

Food costs 

The  cost  of  selected  food  and  drink  items  across  eight  European  airports  has  been 
compiled. SDG have taken averages for each item, and grouped them into ‘meals’ and 
‘refreshments’, which will be offered at different times during an event with a right to 
care  as  specified  in  Article  9(1)(a).  Meals  comprise  a  hot  meal  (burger  and  chips),  a 
chocolate muffin, and either still water (500ml) or a small white coffee. A refreshment 
comprises  a  ham  and  cheese  sandwich  and  either  still  water  (500ml)  or  a  small  white 
coffee. The average costs are as follows: 

• 

• 

Refreshments 

€6 

Meal  €14.50 

Accommodation costs 

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Average  hotel  room  prices  are  taken  from  the  Hotel  Price  Index  published  by  the 
website hotels.com, which provides an average value of €96 for EU  States. This Index 
is compiled from transactions across all star ratings on the hotels.com website, weighted 
to reflect the size of each market. It is then assumed that: 

• 

• 

• 

passengers travelling on business require their own room; 

passengers  travelling  for  leisure  share  a  room  and  therefore  the  cost  per 
passenger is 50% of the price of a hotel room; and 

passengers travelling to visit friends and relatives can, in 50% of cases, return 
to their friends and relatives, and otherwise share a room. 

Table 35: Accommodation rates per passenger 

Journey purpose 

Spend per night (EU average) 

Leisure 

Business 

Visiting friends or relatives (VFR) 

€48 

€96 

€24 

European  Tourism  Insights  2009-1063,  prepared  by  the  European  Travel  Commission, 
reports the number of trips made by Europeans, broken down by journey purpose. SDG 
have  combined  this  data  with  information  provided  by  a  UK  CAA  report,  ‘No-Frills 
Carriers:  Revolution  or  Evolution?’64  to  calculate  the  journey  purpose  split  by  carrier 
type. The market shares are as follows: 

Table 36: Purpose of travel by carrier type 

Purpose of travel 

Traditional 
Scheduled 

Carrier type 

LCC 

Regional 

Charter 

Holiday 

40% 

VFR & other leisure  8% 

Business 

Total 

52% 

100% 

64% 

14% 

22% 

52% 

11% 

37% 

100% 

- 

- 

100% 

100% 

100% 

These  rates  were  then  adjusted  to  reflect  the  fact  that  not  all  travellers  will  require 
accommodation, based on the following assumptions: 

• 

63 
64 

Connecting  passengers:  All  passengers  stranded  overnight  at  a  connection 
point require overnight accommodation. 37.5% of all passengers on regional or 
traditional scheduled carriers are assumed to be connecting passengers (based 
on data from a sample of European airports); 

www.etc-corporate.org/resources/uploads/ETC_ETI_2009-10_with-cover.pdf 
www.caa.co.uk/docs/33/CAP770.pdf 

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• 

• 

Passengers at destination airport: All passengers stranded at their destination 
(half of non-connecting passengers) require overnight accommodation. 

Passengers  at  origin  airport:  In  principle  passengers  stranded  at  the  origin 
airport may be able to go home, but depending on the distance of their home 
from the airport, this may not be practical. Therefore SDG assume that 50% of 
passengers  at  the  origin  airport  (25%  of  all  non-connecting  passengers)  go 
home and so do not incur an accommodation cost. 

Table 37: Adjusted accommodation costs per passenger by carrier type 

Carrier type 

Regional 

Traditional scheduled 

Low cost carrier 

Charter 

Cost per night per 
passenger (€) 

€53 

€60 

€42 

€36 

Airlines  are  also  obliged  to  pay  for  transport  between  the  airport  and  the  hotel.  Taxi 
fares for a short (3km – approximately the distance from a terminal taxi rank to nearby 
hotels)  journey  were  compiled  for  a  sample  of  cities.  The  average  transport  cost 
calculated by this method is €9.77. 

Communication costs 

International  telephone  rates  from  landlines  to  overseas  mobiles  and  landlines  were 
obtained  from  a  sample  of  European  companies  including  BT,  France  Télécom 
(Orange) and Deutsche Telekom.  

Assuming that the duration of the two calls offered under Article 9(2) is five minutes, 
the average cost used is €1.47. 

WiFi  and  internet  café  pricing  information  were  used  to  determine  an  average  hourly 
internet access rate of €5.29. This would be sufficient 
time for passengers to send the 
emails provided for in Article 9(2)65

 .  

Assuming half of all passengers choose to make phone calls and the remainder chooses 
to send emails, the average communication cost used in the model is €3.38. 

Costs associated with mishandled baggage 

Data provided by four airlines were used to determine the actual level of compensation 
that airlines pay for each item of lost, delayed or damaged baggage. 

Table 38: Compensation costs associated with mishandled baggage 

Cost of compensation 
per incident 

Lost baggage 

€323 

65 

One  hour  is  often  the  shortest  time  period  for  which  internet  access  can  be  purchased,  so  it 
would be unrealistic to reduce this time 

EN 

96 

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Delayed baggage 

€25 

Damaged baggage  €78 

Similarly, it is assumed that there is no compensation cost associated with the Montreal 
Convention  in  relation  to  passenger  delays,  as  information  from  the  airline  interviews 
indicates that this is rarely paid. 

Other airline costs 

When airlines need to deny boarding to some passengers, they often offer incentives to 
encourage passengers to surrender their reservations voluntarily. It is assumed that the 
cost  of  these  incentives  is  half  the  cost  of  a  passenger  who  is  denied  boarding 
involuntarily,  and  that  they  take  the  form  of  compensation  and  care  (refreshments, 
meals, accommodation, communication). 

Applying the costs to the disruption types 

The results are presented by type of disruption, and the levels of economic burden by a 
combination of scenarios: 

•  Total burden vs. burden in the absence of Regulation 261/2004; 

•  Theoretical  maximum  (all  passengers  claim  compensation  for  delays  and 

cancellations) vs. actual (current claim rates) liability; and 

•  Low,  medium  and  high  scenarios  for  the  proportion  of  incidents  which  meet  the 

criteria in Article 5(3). 

The  incremental  economic  burden  caused  by  the  Regulation  is  the  difference  between 
the total economic burden and the burden if Regulation 261/2004 was repealed. 

Table 39: This results in the following 12 scenarios: 

Scenario  Total burden vs. burden in the 
absence of Regulation 261/2004

Theoretical vs. actual 
liability 

Proportion of 
incidents 
meeting 
criteria in 
Article 5(3) 

Low 

Medium 

High 

1 

2 

3 

4 

5 

6 

7 

8 

9 

Total economic burden 

Total economic burden 

Total economic burden 

Current 

Current 

Current 

Total economic burden 

Theoretical maximum 

Low 

Total economic burden 

Theoretical maximum 

Medium 

Total economic burden 

Theoretical maximum 

High 

No 261/2004 economic burden 

Current 

No 261/2004 economic burden 

Current 

No 261/2004 economic burden 

Current 

Low 

Medium 

High 

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10 

11 

12 

No 261/2004 economic burden 

Theoretical maximum 

Low 

No 261/2004 economic burden 

Theoretical maximum 

Medium 

No 261/2004 economic burden 

Theoretical maximum 

High 

This section considers each element in turn, explaining the calculations and underlying 
assumptions that determine how the costs have been calculated.  

Total burden 

Delays 

For delays, the following costs have been assumed: 

• 

• 

• 

• 

• 

Compensation  costs  were  applied  to  delays  over  3  hours,  on  the  basis  of  the 
length of the flight and in accordance with the levels set out in Article 7.  

In the case of delays of over five hours, there is an additional reimbursement 
cost  in  line  with  Article  6  (1)(c)(iii).  However,  only  10%  of  passengers  are 
assumed to claim this – most wait for the delayed flight. 

It  is  assumed  that  refreshments  (as  defined  above)  are  offered  after  the  time 
thresholds in Article 6 (depending on the length of the flight), and every five 
hours thereafter; meals are offered after five hours’ delay and every five hours 
thereafter.  

Accommodation  costs  (and  associated  travel  costs)  are  incurred  for  delays  of 
over 12 hours. 

All delays over two hours incur the communication costs in Article 9 (2). 

It  is  assumed  that  delays  do  not  incur  any  costs  associated  with  the  Montreal 
Convention, as responses from airlines indicate that this is never paid. 

Cancellations 

For cancellations, compensation costs have been applied as defined  in  the  Regulation, 
on the basis of the flight length and the waiting time, using the thresholds in Article 5(1) 
and Article 7. 

It is assumed that, when offered the choice in Article 8 (1), 25% of affected passengers 
would  choose  to  be  reimbursed,  while  75%  would  choose  to  be  rerouted.  This  stems 
from the assumptions that: 

• 

• 

• 

Half  of  all  passengers  are  on  the  outward  leg  of  their  round  trip  and  half  are 
making the return portion of their trip; 

All passengers on the return portion of their round trip need to return to their 
origin, so they would all choose to be rerouted; and 

50%  of  passengers  on  their  outward  journey  may  choose  to  be  reimbursed 
instead and not make the trip. 

Where  a  passenger  accepts  a  refund  instead  of  rerouting,  no  care  and  assistance  costs 
are incurred. 

It is assumed that an airline would only offer to reroute a passenger on another carrier 
after  a  delay  of  at  least  12  hours,  or  24  hours  in  the  case  of  long  haul  flights.  IATA 

EN 

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member  carriers  have  reciprocal  agreements  in  place  to  reroute  passengers  on  each 
others’ services and for these carriers we have assumed that rerouting costs are equal to 
the original fare reimbursement cost. However, low cost carriers tend not to have these 
agreements (although some examples of such agreements do exist), so their costs would 
be higher. It is assumed that the cost to a low cost carrier of rerouting a passenger on 
another airline’s flight would be 100% higher than the cost of reimbursement and that 
50% of low cost carrier passengers would be rerouted on other airlines. 

Right  to  care  and  Montreal  Convention-related  costs  are  applied  as  for  delays.  No 
assistance costs are incurred for passengers that accept a refund rather than rerouting. 

Denied boarding 

Costs for compensation for involuntary denied boarding have been applied according to 
the flight length and waiting time, using the thresholds in Article 7. It is assumed that 
airline  incentives  to  encourage  passengers  to  surrender  their  reservations  voluntarily 
cost half as much as the compensation and care costs for involuntary denied boarding 
set out in the regulation.  

Costs  for  assistance,  rerouting  and  reimbursement  have  been  applied  as  for 
cancellations. As for cancellations, no assistance costs are incurred for passengers that 
accept a refund rather than rerouting. 

Downgrading 

Reimbursement  costs  as  set  out  in  Article  10  (2)  have  been  applied  to  downgraded 
passengers. No other costs have been applied. 

Actual (current claim rates) liability 

The  consultant  asked  airlines  what  proportion  of  passengers  who  were  eligible  for 
compensation  actually  claimed  it,  but  they  were  not  able  to  answer  this  question. 
Therefore,  this  was  estimated  based  on  data  for  complaints  to  airlines,  as  it  would 
generally  be  necessary  to  complain  to  the  airline  in  order  to  claim  compensation  for 
delays or cancellations.  

Based on complaints data provided by five airlines (three traditional scheduled, one low 
cost  and  one  regional  carrier),  SDG  estimate  that  5%  of  passengers  affected  by 
cancellations actually complain to the airline.  

However, this is likely to underestimate the proportion of eligible passengers that might 
claim compensation: 

• 

• 

• 

some complaints may cover more than one passenger; 

passengers  would  be  more  likely  to  complain  in  cases  where  the  cancellation 
appears  to  be  the  fault  of  the  carrier  and  therefore  they  may  be  entitled  to 
compensation; and 

passengers  would  be  more  likely  to  claim  if  they  knew  they  were  entitled  to 
compensation,  and  since  stakeholders  indicated  that  in  many  cases  the 
information notices required by Article 14(2) are not given out, the number of 
claims  is  probably  lower  than  it  would  be  if  airlines  fully  complied  with  the 
legislation. 

These  factors  might  be  partly  offset  by  the  fact  that  not  every  complaint  would 
necessarily be a claim for compensation. 

EN 

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On this basis it is estimated that 10% of passengers who could claim compensation for 
delays and cancellations would actually do so.  

No information was available on the proportion of passengers facing delays longer than 
5  hours  that  chose  a  refund  rather  than  to  wait  for  their  flight.  Therefore  it  was  also 
assumed that 10% of the affected passengers chose a refund. 

Extent of disruption subject to exemption from payment of compensation 

The  three  levels  (low,  medium,  high)  reflect  the  level  of  disruption  for  which  the 
airlines  are  not  exempt  from  paying  compensation  as  a  result  of  the  ‘extraordinary 
circumstances’ provision in Article 5(3). Delays and cancellations were estimated using 
data  on  the  causes  of  delay  provided  by  Eurocontrol  eCODA  reports,  and  it  was 
assumed that all other types of disruption will be within airlines’ control. More detail is 
provided in the relevant section of the main report. 

Total economic burden 

The  total  economic  burden  is  calculated  for  each  disruption  type  and  scenario  by 
bringing together the following figures: 

• 

• 

• 

• 

The number of passengers affected by the type of disruption 

Whether or not a particular type of cost is incurred in the given scenario 

The proportion of the cost that is incurred in the given scenario 

The cost per affected passenger for the given delay and scenario 

This  is  calculated  by  carrier  and  flight  type  before  aggregating  by  cost  type  and 
scenario.  

The  costs  are  presented  both  in  Euros  and  as  a  proportion  of  airline  revenue.  The 
revenue is calculated using two sources:  

• 

• 

the  average  yield  (revenue  per  passenger  km)  from  airlines’  financial 
statements; and 

the number of kilometres operated from OAG data. 

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ANNEX 9: Cost estimates 

The limited availability of data has required the recourse to a number of assumptions in 
order to  make the  calculations  of which the results are presented in this report. A full 
overview of these assumptions is given in the annex 8. 

The  sensitivity  tests  (annex  14)  have  shown  that  the  results  are  especially  sensitive  to 
the assumptions with regard to refreshments costs and the proportion of passengers that 
are  entitled  to  compensation  and  do  effectively  claim  it  (“claim  rate”).  The  latter  is 
particularly important, as it varies also with the degree of compliance of air carriers with 
the Regulation. 

The  cost  of  the  Regulation  needs,  according  to  the  Commission's  Impact  Assessment 
Guidelines,  to  be  estimated  under  the  hypothesis  of  full  compliance  with  EU  law. 
However,  we  do  not  know  by  how  much  the  claim  rate  would  increase  in  case  the 
passengers  were  correctly  informed  about  their  rights  and  in  case  they  expected  that 
their founded claims would indeed be honoured. 

Therefore  calculations  are  presented  under  two  extreme  assumptions:  once  under  the 
current claim rate, once under a 100% claim rate. The former corresponds to the 10% 
claim  rate  estimated  on  the  basis  of  current  data,  but  for  which  an  increase  of  0.5 
percentage points per year is assumed to take into consideration the growing awareness 
of air passengers (due to information campaigns and to the action of agencies that claim 
compensation  on  behalf  of  passengers).  The  100%  claim  rate  gives  the  upper  limit  of 
the  cost  as  it  shows  the  maximum  cost  to  which  airlines  would  be  exposed  in  the 
extreme case that all entitled passengers claimed their compensations.  

The table below indicates the incremental economic cost on airlines, once under a 10% 
claim rate, once under a 100% claim rate. 

EN 

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Table 40: incremental economic cost on airlines of Regulation 261/2004 (in € million, 
based on 2007-2009 data) 

€ million 

claim 
10% 
for 
rate 
compensation 

100%  claim 
for 
rate 
compensation 

Delay 

Care 

132.6 

132.6 

Reimbursement/rerouting 

38.3 

38.3 

Compensation (Sturgeon) 

111.6 

1115.5 

Cancellation 

Care 

479.7 

479.7 

Reimbursement/rerouting 

Compensation 

Denied 
boarding 

Care 

26.0 

71.5 

3.2 

26.0 

715.0 

3.2 

Compensation 

44.0 

44.0 

Total 

906.9 

2554.5 

Source: Steer Davies Gleave, 2012 

EN 

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The  following  table  shows  the  cost  expressed  in  €  per  passenger  and  ventilated  by 
carrier type. 

Table 41: 

INcremental economic burden per passenger (€), average 2007-9 

Regional 

Charter 

Low cost 

Traditional 
Scheduled 

Entitled passengers claiming 
compensation 

Departure delay 

Curre
nt 
claim 
rate 

0.10 

100% 
claim 
rate 

Curre
nt 
claim 
rate 

0.72  

100% 
claim 
rate 

Current 
claim 
rate 

100% 
claim 
rate 

Current 
claim 
rate 

100% 
claim 
rate 

0.27 

0.22 

Compensation 

0.02 

0.20 

0.26  

2.60 

0.10 

1.00 

0.07 

0.70 

Reimbursement 

Care 

Cancellation 

0.01  

0.07  

1.30  

Compensation 

0.14  

1.40 

Reimbursement / 
rerouting 

Care 

-  

1.16  

Voluntary denied boarding 

0.01  

Involuntary denied 
boarding 

0.01  

0.07  

0.39  

-  

-  

-  

-  

-  

-  

0.01  

0.16  

0.75  

0.05 

0.10 

0.80  

- 

0.08 

0.80 

0.11  

1.10 

0.12  

-  

0.56  

0.00  

0.00  

0.69  

0.03  

0.07  

Total 

1.42 

2.86 

0.72  

3.06 

1.03  

2.65 

1.12  

2.74 

Average revenue per 
passenger 

Incremental burden as % 
of turnover 

59.98 

90.86 

61.02 

197.35 

2.4% 

5.3% 

0.8% 

3.4% 

1.7% 

4.3% 

0.6% 

1.6% 

Total passengers (millions) 

18.3 

Total incremental cost (€ 
millions) 

25.9 

Source: Stear Davies Gleave, 2012 

89.2 

63.8 

215.8 

223.4 

401.1 

447.8 

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Table  42:  Estimation  of  the  cost  of  the  ash  cloud  crisis  (April  2010)  under  the 
assumption of full compliance with Regulation 261/2004 

Assistance type 

Passengers entitled 
(millions) 

Cost / passenger 
(€) 

Total cost (€ 
millions) 

Rerouting by surface transport 

2.3 

Accommodation 

7.4 

Travel to/from accommodation 

7.4 

Meals / refreshments 

Total 

7.4 

- 

118.81 

51.60 

9.77 

30.83 

- 

€276.4 

€380.8 

€72.1 

€227.5 

€956.8 

These  figures  cover  all  airlines  that  were  supposed  to  operate  in  Europe.  On  average, 
67%  of  European  airspace  was  closed  between  14  April  and  22  April  2010.  Given  a 
total of 831 million passengers in 2010, this means 1.5 million passengers were affected 
each  day  during  this  period.  Eurocontrol’s  Annual  Report  2010  states  that  101,127 
flights were cancelled as a result of the volcanic ash cloud. The consultant's disruption 
database  indicates  that  there  were  252,160  cancellations  in  2010,  so  the  volcanic  ash 
cloud accounted for 40% of all cancellations in 2010. 

It  was  assumed  that  passengers  at  their  point  of  origin  would  have  abandoned  their 
journey and gone home, probably seeking to travel after the crisis was over. The airline 
would  therefore  not  have  had  an  incremental  cost  of  rerouting  or  care  for  these 
passengers (they would transport them after the crisis instead of during it). Passengers at 
their  destination,  or  at  connecting  points,  would  have  required  rerouting  or  care,  for 
which  the  airline  would  have  been  liable.  It  was  estimated  that  passengers  at  their 
connecting point would have represented 14% of passengers. Therefore, overall 57% of 
passengers would have required care and rerouting during the crisis.  

During the crisis, surface rerouting would have been much more attractive than under 
normal circumstances. It was assumed that surface rerouting would have been possible, 
on  average,  for  distances  less  than  1,000km.  Scheduled  seats  on  flights  of  less  than 
1,000km  account  for  54%  of  all  scheduled  seats  operated  in  2010.  Therefore  it  was 
assumed that 54% of all passengers would have to have been offered surface rerouting, 
while the remaining 46% could not be rerouted until the crisis was over. Those offered 
surface  rerouting  would  have  been  given  care  and  assistance  for  one  day  until  they 
could have been rerouted; those who could not be offered surface rerouting would have 
to have been provided with care until they could be rerouted by air after the crisis.  

For these passengers, the cost incurred depends on the time that they had to wait before 
being able to continue their journey. The length of the closure varied between different 
parts of the EU, but on average lasted around five days. It would have taken longer than 
this  to  clear  the  backlog  of  people,  and  using  a  standard  assumption  of  a  75%  load 
factor, the average wait time should have been 10 days ((5 + 15) ÷ 2). However, once 
the event occurs, fewer people would make bookings and some abandon their journeys 
altogether;  it  was  assumed  that  this  would  reduce  waiting  times  by  20%,  giving  an 
average waiting time of eight days. 

For journeys under 1,000km, it was estimated from OAG data that the average journey 
length was 487km. Based on a sample of ten rail and ferry routes, it was estimated that 
surface rerouting would have cost, on average, €0.24 per kilometre. Using the average 

EN 

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distance for journeys under 1,000km, the average cost per affected passenger is €118.81 
(487  km  x  €0.24  per  km).  The  total  cost  for  rerouting  is  therefore  €276  million  (1.5 
million affected passengers per day x 5 days of closure x 57% of passengers requiring 
care  or  rerouting  x  54%  of  passengers  offered  surface  rerouting  x  €118.81  per 
passenger). 

It  was  assumed  that  passengers  who  are  not  rerouted  will  be  provided  with  the 
following care: 

• 

• 

• 

• 

Accommodation 

Travel to the accommodation 

Refreshments (three times a day) 

Meals (three times a day) 

Accommodation costs vary by carrier type; a weighted average based on the number of 
passengers  by  flight  and  carrier  type  was  taken,  which  produces  an  average  cost  of 
€51.60  per  night.  Travel  costs  are  €9.77  (as  used  elsewhere 
in  the  model).  It  was 
assumed that refreshments and meals cost half as much outside the airport as they do in 
the airport, giving a cost of €3.00 for refres hments and €7.27 for meals. The total care 
cost per affected passenger is therefore €92.20 (€51.60 + €9.77 + €3.00 x 3 + €7.27 x 3).  

The total cost for the provision of care is €680 million: (1.5 million affected passengers 
per  day  x  46%  requiring  care  x  €92.90  +  1.5  million  affected  passengers  per  day  x  8 
days x €92.90) x 57% requiri ng care or rerouting. 

EN 

105 

   EN 

 
Effectiveness:  +  (positive  effect  on  at  least  one  objective,  no  conflict  with  other  objectives),  0  (small/no  effect),  -  (negative/conflicting  on 
objectives) 

ANNEX 10: Preliminary screening of policy measures (table 43) 

1. Measures with regard to clarification of rights 

Measure 

Stakeholder opinion  Legal  and  practical 

Effectiveness 

compatibility 

Proportionality  and 
subsidiarity 

Complementarity  

define 

Clearly 
extraordinary 
circumstances + non-
exhaustive list 

+ 

Greater 
certainty 

+ 

legal 

+ 

list  must 
The 
remain 
non-
exhaustive  and  be 
sufficiently  flexible 
(could  be  adjusted 
via 
implementing/deleg
ated act) 

of 

on 

the 
Positive 
principle  for  clear 
definition,  mixed 
with  regard  to  the 
content 
the 
definition  and  with 
regard 
the 
addition  of  a  list 
(consumer 
find 
organisations 
the  definition  of 
Wallentin 
sufficient) 

to 

Clarify  right  to  care 
and  to  compensation 
in  case  of  missed 
connection 

Mixed:  consumers 
in 
air 
favour, 
carriers opposed 

+ 

+ 

+ 

Already 
under current law 

the  case 

Clarification  would 
increase 
legal 
certainty 

No  additional  cost 
compared to present 
situation 

"no 

show" 

Ban 
policy 

Mixed:  air  carriers 
most 
opposed, 
and 
governments 
in 
consumers 

+ 

+ 

+ 

line 

In 
provisions  of 
unfair 

with 
the 
contract 

to 

be 
Measure 
return 
to 
limited 
flights,  application 

+ 

+ 

+ 

Retained 
for 
policy 
options 

Yes,  for 
all 
options 
(but 
different 
definitio
n 
option 
2b) 

for 

Yes,  all 
options 

Yes,  for 
all 
options 

EN 

106 

EN 

 
  
favour 

terms directive 

all 

to 
could 
competition 

segments 
hurt 

Allow  correction  of 
booking errors  

in 

broad 
Positive: 
support 
all 
stakeholder  groups 
a  measure 
for 
clear 
limited 
booking errors 

to 

Clarify 
tarmac delays 

rights 

in 

Mixed:  consumers 
air 
favour, 
in 
carriers opposed 

+ 

+ 

+ 

+ 

Legal certainty 

Limited cost as rare 
event 

+ 

+ 

Mainly  clarification 
of  existing  rights  + 
provision  of 
free 
drinking water after 
+ 
hour 
one 
application  at  on-
arrival delays 

Clarify that diversion 
of flight to be treated 
as cancellation/delay 

Mixed:  consumers 
in 
air 
favour, 
carriers opposed 

+ 

+ 

+ 

Seems  to  be  in  line 
with Court ruling in 
case Rodriguez 

Legal certainty 

Limited  cost,  rare 
event 

that 
Clarify 
rescheduling 
to  be 
treated  as  delay  if 
2  weeks 
within 
before departure 

Mixed:  consumers 
most 
and 
governments 
in 
favour,  air  carriers 
and 
travel 
agents/tour 
operators opposed 

+ 

+ 

+ 

Legal 
better protection 

certainty, 

Seems  to  be  in  line 
with 
Sturgeon 
ruling  and  principle 
of  equal  treatment 
for 
similar 
situations 

Difficult to apply to 
packages 
travel 

+ 

+ 

+ 

Yes,  for 
all 
options 

Yes,  all 
options 

Yes,  all 
options 

Careful 
about 
consistency  with 
package 
travel 
directive 

Yes,  all 
options 

EN 

107 

EN 

 
  
 
(exemption  might 
be needed) 

Consistent 
time 
for 
thresholds 
assistance  at  delays 
(2h) 

time 
Consistent 
thresholds  for  right 
to 
and 
refund 
rerouting  at  delays 
and cancellations 

Most 
Mixed: 
and 
governments 
in 
consumers 
mixed 
favour, 
responses 
from 
other  stakeholders, 
2h is the most cited 
period 

airlines, 
Mixed: 
airports  and  travel 
opposed, 
agents 
and 
governments 
associations 
in 
(preference 
favour 
for  3h  delay  for 
rerouting) 

if 

rerouting 
Right  of 
with  other  carrier  or 
mode 
rerouting 
cannot  be  offered  on 
the 
services 
own 
same day 

consumer 
and 

Mixed: 
associations 
governments 
such 
support 
but 
clarification 
airlines are opposed 

+ 

+ 

+ 

+ 

+ 

+ 

Simplification, 
passenger 
assistance no longer 
depending  on  flight 
length 

Cost 
especially 
charter carriers 

increase 
for 

Must  be  packaged 
with other measures 
to 
ensure 
proportionality  (see 
Sturgeon) 

Yes,  for 
options  2 
and 4 

+/- 

- 

- 

no 

Increases  passenger 
for 
protection 
but 
delays, 
for 
it 
decreases 
cancellations 

Very 
short 
rerouting/refunding 
option 
would 
considerably 
increase cost;  

Conflicts with other 
measures  aimed  at 
greater 
proportionality 

Yes,  for 
options  1 
and 2 

+ 

+/- 

+ 

Legal  certainty  + 
waiting 
shorter 
times 
for 
passengers 

cost 

for 
without 

High 
carriers 
rerouting 
or 
agreements 
thin 
operating  on 
routes 
(exceptions 
should  be  foreseen 
seats 
no 
where 
available 
at 
reasonable cost) 

offer 
Airlines 
rerouting  in  cases  of 

to 

airlines 
Mixed: 
opposed, consumers 

+ 

+ 

Equal  treatment  of 

- 

Very 

+ 

short 

Yes,  for 
option 4 

EN 

108 

EN 

 
  
long delay 

in favour 

and 

delayed 
cancelled 
passengers 

rerouting/refunding 
option 
would 
considerably 
increase cost;  

Right 
to 
compensation  when 
carrier  fails  to  offer 
rerouting  or  other 
care/assistance 

Mixed:  air  carriers 
governments 
and 
are 
opposed, 
consumer 
associations  are  in 
favour 

- 

+/- 

+/- 

- 

no 

clear 

Practical  problems 
for  application:  not 
always 
if 
passenger  chose  to 
be 
rerouted; 
problems  to  contact 
passengers  in  mass 
disruptions 

Could 
create 
additional  incentive 
for 
compliance; 
however,  effective 
enforcement  would 
already  create  this 
incentive 

Would  need  to  be 
in 
modulated 
function 
of 
exceptional 
circumstances 
(makes  application 
more complicated) 

Not  needed  if  new 
for 
measures 
enforcement 
are 
effective 

Airlines  to  provide 
information 
more 
during disruptions 

Positive:  majority 
all 
support 
stakeholder groups 

in 

Obligation  on  travel 
give 
to 
agents 
passenger 
contact 
details to air carrier 

Mixed  (opposed  by 
travel agents) 

Better information of 
passengers 
on 
declaration of special 
interest  (and  no  fee 
for 
declaration) 
concerning  mobility 
equipment 

Large  support  for 
information 
better 
on 
declaration; 
mixed 
howveer, 
views  with  regard 
to the zero fee 

+ 

+ 

Subject 
passenger's 
agreement 
protection) 

to 

(data 

+ 

Measure  takes  into 
legal 
account 
constraints 

Extend  scope  of  the  Mixed 

(airlines 

- 

+ 

+ 

+ 

- 

+ 

+ 

+ 

/ 

Yes,  for 
all 
options 

Yes,  for 
all 
options 

Yes,  for 
all 
options 

no 

+ 

+ 

Some implementing 
costs 

+ 

Moderate  cost,  few 
passengers 
concerned 

/ 

109 

EN 

EN 

 
  
 
 
to 

Regulation 
the 
contracting  carrier  if 
the  latter  is  an  EU 
carrier  while 
the 
operating  carrier  is  a 
non-EU  carrier  (for 
flights 
third 
from 
countries to the EU) 

but 

consumer 
mixed, 
not 
organisations 
opposed 
in 
favour  of  extension 
flights  by 
to  all 
non-EU 
carriers, 
see next measure)  

Extend  scope  of  the 
to  non-
Regulation 
for 
EU 
flights 
third 
countries to the EU  

carriers 
from 

Mixed 
mixed, 
organisations 
favour) 

(airlines 
consumer 
in 

Risk  of  problem  of 
extra-territoriality, 
most 
events 
triggering the rights 
would  occur  in  a 
non-EU airport 

Practical  difficulty 
to apply with regard 
to assistance 

- 

Risk  of  problem  of 
extra-territoriality, 
most 
events 
triggering the rights 
would  occur  in  a 
non-EU airport 

scope 

Extend 
Regulation 
helicopter services 

of 
to 

Airlines  to  designate 
responsible 
staff 
member in all served 
airports 

+ 

+ 

rate, 

Negative: 
low 
response 
a 
of 
majority 
responses  favoured 
no 
to 
change 
present rules 

most 
Mixed: 
travel 
airlines, 
agents 
tour 
and 
operators  opposed, 
and 
governments 
consumers 
in 
favour 

Covers  only  10  to 
20% 
the 
of 
passengers  on  non-
EU flights 

/ 

+ 

- 

/ 

- 

Large  cost  impact 
scale 
on 
small 
operations 
done 
with helicopters 

/ 

no 

No 

Conflicts 
with 
measure  that  would 
exempt  small  scale 
operations 

- 

+ 

Option 3 

Questionable 
effectiveness as this 
is  an  obligation  of 
means that does not 
guarantee 
that 
airlines  will  indeed 
grant 
correctly 
passengers' rights 

High cost especially 
frequency 
at 
low 
– 
destinations 
furthermore 
the 
measure  does  not 
take 
into  account 
future  development 
market 
and 
of 
penetration 

110 

EN 

EN 

 
  
 
communication 
technology 

2. Measures with regard to enforcement policy 

Measure 

Stakeholder opinion  Legal  and  practical 

Effectiveness 

compatibility 

Proportionality  and 
subsidiarity 

Complementarity  

of 
formal 

Stronger 
coordination 
NEBs  via 
comity 
(implementing 
act) 
and right for COM to 
require  investigation 
of NEB 

EU 
up 
Set 
body 
enforcement 
of  NEBs 
instead 
(COM 
then 
can 
impose  sanctions  on 
carriers) 

NEBs  to  carry  out 
proactive  policy  by 
checking  manuals 
and  ground  handling 
agreements 

/ 

+ 

+ 

+ 

Mixed 
from 
consumer groups)  

(support 
some 

+ 

Limited cost 

legal 
Increases 
certainty 
and 
consistency of NEB 
policies 

+ 

- 

ensure 

Would 
consistent 
enforcement 

increase 
Would 
total 
of 
cost 
enforcement  by  ca. 
15%  and  shift  cost 
to EU budget 

Mixed:  airlines  and 
agents/tour 
travel 
operators  opposed, 
in 
consumers 
mixed 
favour, 
from 
responses 
governments 

+ 

+ 

+ 

Limited  costs  for 
NEBs 

Proactive 
policy 
may  reduce  other 
enforcement 
actions, 
enhances 
consistency of NEB 

+ 

+ 

+ 

Retained 
for 
policy 
options 

Yes,  for 
options  2 
and 3 

Yes,  for 
option 4 

Yes,  all 
options 

EN 

111 

EN 

 
  
 
+ 

+ 

+ 

Airlines  to  provide 
manuals 
and 
contingency plans 

Mixed:  airlines  and 
travel 
agents/tour 
operators  opposed, 
consumers 
in 
favour 

/ 

inform 
to 
NEBs 
COM 
their 
on 
complaint  handling, 
on sanctions 

NEBs  to  check  on 
compliance 
with 
Montreal on baggage 
issues 

Mixed:  airlines  and 
travel 
agents/tour 
operators  opposed, 
in 
consumers 
mixed 
favour, 
responses 
from 
governments 

policies 

+ 

policy 
Proactive 
may  reduce  other 
enforcement 
actions, 
enhances 
consistency of NEB 
policies 

+ 

+ 

Limited  costs  for 
airlines 

linked 

to 
To  be 
airport  contingency 
plans 

Yes,  all 
options 

Yes,  all 
options 

Yes,  all 
options 

+ 

+ 

+ 

Limited cost 

COM 
Improves 
of 
monitoring 
NEBs 
and 
consistency of NEB 
policies 

To  be  linked  with 
other  measures  that 
enhance 
coordination 
NEBs 

of 

+ 

+/- 

+ 

Potentially 
substantial 
additional  cost  for 
NEBs: 

-  with  complaint 
NEB 
handling: 
costs 
increase  by 
70% 

-  without  complaint 
handling,  focussed 
and 
on 
terms 
conditions 
and 
airlines'  manuals: 
less  than  1%  cost 
increase 

EN 

112 

EN 

 
  
Mixed:  airlines  and 
travel 
agents/tour 
operators  opposed, 
in 
consumers 
mixed 
favour, 
responses 
from 
governments 

Mixed 

/ 

/ 

Compliance 
become 
condition 

to 
licence 

NEB 
to 
information 
sanctions 
complaint handling 

publish 
on 
and 

Impose on carriers to 
designate  person  or 
body 
each 
in 
Member  State  on 
which  sanctions  can 
be notified 

to 
Require  airlines 
provide 
contact 
details  to  NEBs  and 
COM 

+ 

+ 

+ 

+/- 

- 

Necessitates  change 
of 
Regulation 
1008/2008  which  is 
not under revision 

as 

Ineffective 
measures 
the 
treat of such drastic 
sanctions 
is  not 
credible 

+ 

+ 

Limited cost 

- 

the 

Unreasonable  cost 
limited 
seen 
the 
result 
measure 

of 

+ 

+ 

+ 

+ 

no 

Yes,  for 
all 
options 

no 

Yes,  all 
options 

+ 

- 

Problems 
to 
sanction  carriers  of 
Member 
other 
States  have  been 
solved  by  most  MS 
concerned 

+ 

+ 

Facilitates  contacts 
between  NEBs  and 
air carriers 

Very limited cost 

EN 

113 

EN 

 
  
 
3. Measures with regard to complaint handling 

Measure 

Stakeholder opinion  Legal  and  practical 

Effectiveness 

compatibility 

Proportionality  and 
subsidiarity 

Complementarity  

carriers 

to 
Air 
information 
provide 
on 
complaint 
handling procedures 

limits 
time 
Impose 
on  carriers'  response 
to complaints 

Positive: 
support 
stakeholder groups 

broad 
across 

Mixed:  support  by 
consumers 
and 
governments; 
mixed  replies  from 
and 
carriers 
air 
travel 
agents/tour 
operators 

+ 

+ 

+ 

+ 

More 
effective 
complaint handling 

Limited cost 

+ 

+ 

+ 

+ 

More 
effective 
complaint handling 

Needs  to  take  into 
special 
account 
circumstances 
in 
such 
which 
deadlines  would  be 
too  short  (e.g.  mass 
disruptions) 

cost 

– 
airlines 
adopted 
in 

Limited 
some 
already 
deadlines 
voluntary 
agreements 

Impose 
limits 
time 
on NEB's response to 
complaints 

Mixed:  consumers 
in 
favour,  mixed 
responses  from  air 
carriers 
and 
governments 

+ 

+ 

+ 

+ 

effective 
More 
complaint handling 

times 
Indicative 
already in voluntary 
agreement  between 
NEBs 

Needs  to  take  into 
special 
account 
in 
circumstances 
which 
such 
deadlines  would  be 
too  short  (e.g.  mass 
disruptions) 

Retained 
for 
policy 
options 

Yes,  all 
options 

Yes,  all 
options 

Yes,  all 
options 

Clarify  exchange  of 
info  between  ADR 

/ 

+ 

+ 

+ 

+ 

Yes,  all 

EN 

114 

EN 

 
  
 
 
 
 
 
and  NEB  taking  into 
account  the  existing 
ADR proposal (make 
ADR  first  receipient 
of  complaints,  with 
technical 
suppoprt 
from NEB) 

Make 
participation 
mandatory 
carriers 

ADR 

/ 

for 

Extend  deadline 
complain 
baggage issues 

to 
about 

Compel  air  carriers 
to  accept  PIR  for 
baggage complaints 

/ 

/ 

for 
Possibility 
to 
passenger 
complain 
to 
marketing  carrier  as 
well 

Mixed:  support  by 
consumers, 
air 
carriers  and  travel 
agents/tour 
operators 
opposed 

are 

Basis  already  given 
in ADR proposal 

Better 
informed 
decisions  at  both, 
ADR and NEB 

- 

+/- 

- 

Conflicts  with  legal 
systems 
some 
MS 

in 

Does  not  ensure 
compliance 
with 
results 

– 
Subsidiarity 
legal 
various 
systems 
–  was 
already  considered 
in 
IA  on  ADR 
proposal 

- 

Incompatible  with 
Montreal 
Convention 

+ 

- 

+ 

+ 

+ 

+ 

Enhances  also  legal 
certainty 

Already the case for 
many airlines 

+ 

- 

Practical  problems 
–  marketing  carrier 
has  no  control  over 
events 

May  be  interesting 
for  passenger  when 
the operating carrier 
is non-EU while the 
marketing  carrier  is 
EU 

Marketing 
carrier 
may have to assume 
costs  unrelated 
to 
his own operations 

/ 

+ 

+ 

+ 

options 

no 

no 

Yes,  all 
options 

no 

EN 

115 

EN 

 
  
 
Introduce  liability  of 
travel agents 

/ 

Allow  passenger  to 
have 
complaint 
handled  by  NEB  of 
his choice 

Mixed:  consumers 
in 
air 
favour, 
carriers  and  travel 
agents/tour 
operators opposed 

- 

- 

Practical  problem: 
passenger  would 
have  to  prove  that 
the  travel  agent  did 
not 
on 
pass 
information 

More  effective  for 
passenger 
if  only 
the  carrier  is  the 
for 
contact 
complaints 
and 
claims 

+/- 

+ 

/ 

/ 

Limited cost 

Easier 
for 
passenger, also with 
the 
regard 
language used 

to 

the  NEB  of 
the 
country  where  the 
incident  took  place 
has  usually  better 
information 
about 
the  event  –  feasible 
via  better  exchange 
of 
info  between 
NEB 

no 

no 

/ 

- 

better 

If 
coordination 
between  NEB,  then 
cases 
should  be 
handled  by  NEB 
most 
with 
over 
information 
the  event  –  help  of 
other  NEB  may  be 
useful  for  language 
and  contact  with 
passenger 

EN 

116 

EN 

 
  
 
4. Measures with regard to unlimited obligations in time and scale 

Measure 

Stakeholder opinion  Legal  and  practical 

Effectiveness 

compatibility 

Proportionality  and 
subsidiarity 

Complementarity  

Exemption 
accomodation 
small-scale 
operations 

for 
for 

Mixed: 
response 
governments 
consumers 
opposed, 
airlines in favour 

weak 
rate, 
and 
rather 
small 

+ 

+/- 

+ 

+ 

for 
Smaller  cost 
small 
businesses 
(note  that  there  are 
very  few  SMEs  in 
the sector) 

clearly 
to  most 
very 

Positive  impact  on 
small 
regional 
operations  –  but 
passenger 
protection 
decreases; 
restrict 
expensive 
small-scale 
operations  to  limit 
impact 
on 
(small 
consumers 
short 
aircraft, 
distances): 
75seat/250km 
seems to farely well 
capture 
of 
operations 
concerned 

type 

Mixed:  airlines  in 
favour,  consumers 
opposed 

+ 

right 

Replace 
to 
refreshments,  means 
accomodation 
and 
to 
with  obligation 
offer 
optional 
insurance 

-/+ 

+ 

Cost  reduction  but 
passengers 
not 
always protected 

Retained 
for 
policy 
options 

Yes,  for 
option 2 

Yes, 
option 1 

EN 

117 

EN 

 
  
 
 
care 

Limit 
in 
extraordinary  events 
of long duration 

Mixed:  airlines  and 
most  governments 
and 
travel 
agents/tour 
operators  in  favour, 
consumers 
and 
some  travel  agents 
are  opposed  to  any 
limit 

/ 

fund 

Industry 
to 
cover  extraoridnary 
long 
of 
events 
duration 

+ 

+/- 

+ 

limit 

to 
Clear 
airlines’ 
liability, 
but  passenger  less 
protected 
in  mass 
disruptions 

Consistency  with 
package 
travel 
directive 
be 
to 
ensured 

Yes,  for 
option 2 

+ 

+ 

- 

+ 

EU fund (instead of 
national 
fund) 
be  most 
would 
to  cope 
effective 
mass 
with 
that 
disruptions 
affect several MS 

Passengers 
protected 
higher 
predictability 
airlines 

the 
High  cost  of 
fund, 
including 
administrative  costs 
to manage fund 

while 
cost 
for 

Would cover period 
after 
certain 
a 
deadline 

5. Measures with regard to financial compensation 

Measure 

Stakeholder opinion  Legal  and  practical 

Effectiveness 

compatibility 

Proportionality  and 
subsidiarity 

Complementarity  

Sturgeon 
Increase 
delay to at least 5 hrs 

support 
Mixed: 
from  air  carriers 
and  travel  agents, 
consumers  opposed 
(favour  3h),  mixed 
response from other 
stakeholders 

+ 

+/- 

+ 

+ 

Necessitates 
for 
changes 
as 
cancellations 
respect 
well 
principle  of  equal 

to 

+  Consistency  with 
right 
to 
reimbursement/rero
uting 

+  Diminishes  risk 

Positive  impact  on 
operating costs 

the 

NB 
retained 
option is one where 
the  minimum  delay 

Yes,  for 
options  3 
and 4 

Retained 
for 
policy 
options 

Yes,  for 
options  1 
and 2a 

EN 

118 

EN 

 
  
 
treatment 

of cancellations 

- Compensation less 
likely for passenger 

for 
compensation 
would  be  5hours  - 
alternative 
an 
option 
that  was 
assessed  would  be 
multiple  thresholds 
of  5  hours  (fligths 
up  to  1500km),  9h 
(1500-3500km-)  or 
(beyond 
12h 
3500km) 
which 
takes  into  account 
specific  operational 
problems  of  long-
haul operations 

scope 

Extend 
extraordinary 
circumstances 

of 

Mixed:  airlines  in 
favour,  consumers 
opposed 

+ 

+/- 

Meets  objective  of 
greater 
proportionality  but 
reduces  passengers’ 
protection 

Express 
compensation  as  % 
of  ticket  value  (with 
max 600 and min 50) 

Mixed:  opposed  by 
consumers (who are 
of 
favour 
in 
alternative 
D1), 
responses 
mixed 
from 
other 
stakeholders 

- 

+ 

Practical  problems, 
for 
especially 
of 
determination 
compensation 
for 
package travel 

Meets  objective  of 
more  proportionate 
but 
burden 
passenger 
will 
receive 
smaller 
compensations 

– 

/ 

progressive 

More 
lump-sum 
compensation  with 
shorter 
on 
focus 

+ 

+ 

But 
regulatory 
complexity 

greater 

(four 

Meets  objective  of 
more  proportionate 
(targets 
burden 

+ 

+ 

+ 

+ 

+ 

+ 

Yes,  for 
option 2b 

no 

Yes, 
options  1 
and 2 

EN 

119 

EN 

 
  
 
distances 

instead  of 
distance classes) 

three 

– 

better  the  regional 
but 
carriers) 
passenger 
will 
receive 
smaller 
compensations 

Link 
compensation 
to the delay at arrival 

Only  weak  support 
across  stakeholder 
groups 

- 

+ 

/ 

/ 

no 

Possible 
incompatibility 
with 
convention 

Montreal 

create 
Could 
incentive 
for 
quicker rerouting of 
with 
coupled 
realistic 
time 
threshold 

6. Measures with regard to burden sharing 

Measure 

Stakeholder opinion  Legal  and  practical 

Effectiveness 

compatibility 

Proportionality  and 
subsidiarity 

Complementarity  

Airports  to  provide 
information 
on 
passengers' rights 

airports 
Mixed: 
opposed, 
other 
stakeholder  groups 
in favour 

Airports  to  set  up 
contingency  plan  in 
cooperation 
with 
airlines  and  other 
airport users 

Mixed:  airports  are 
opposed, but the all 
other 
stakeholder 
groups are in favour 

+ 

+ 

+ 

- 

Less 
conflict  of 
interest in providing 
information; 
economies of scale; 

Limited 
impact for airports 

financial 

+ 

+ 

better 
Passengers 
care  about  in  cases 
of mass disruption 

cost 
Limited 
increase – link with 
proposed 
ground 
handling regulation 

+ 

+ 

To  be  built  on 
similar  measure  in 
for  new 
proposal 
ground 
handling 
regulation and to be 
the 
linked  with 

Retained 
for 
policy 
options 

Yes,  all 
options 

Yes,  all 
options 

EN 

120 

EN 

 
  
 
 
right 

Explicit 
claim 
responsible party 

to 
from 

above-mentioned 
measure 
regard 
contingency plans 

with 
to  airlines' 

-/+ 

Increase 
costs 

+ 

in 

legal 

Yes,  all 
options 

airports 
Mixed: 
opposed, 
other 
stakeholder  groups 
favour 
in 
mostly 
but a lot of practical 
problems  are  raised 
(mainly  impact  on 
airport charges) 

+ 

-/+ 

Burden  on  airlines 
to 
expected 
not 
decline  over  longer 
term  as  costs  are 
charged  back 
to 
them  –  potentially 
higher  legal  costs  – 
but 
more 
transparency  in  the 
party 
system, 
for 
responsible 
better 
disruption 
identified 
and 
incentivised 

EN 

121 

EN 

 
  
 
 
7. Other (non-retained) measures , mainly because outside the scope of the impact assessment 

Measure 

Stakeholder opinion  Legal  and  practical 

Effectiveness 

compatibility 

Proportionality  and 
subsidiarity 

Complementarity  

Publish 
airline-
specific  statistics  on 
delays, cancellations, 
boarding, 
denied 
mishandled baggage 

Mixed 

+ 

- 

+  

+ 

cost 

to 
Limited 
industry 
and 
authorities  as  most 
data 
already 
being  collected  by 
Eurocontrol 

are 

No impact expected 
on  compliance  with 
air passenger rights; 
although  passenger 
may  make 
an 
informed  choice  of 
carrier,  the  impact 
very 
be 
would 
limited 
this 
as 
choice 
remains 
restricted  (only  one 
carrier  on  many 
routes,  or 
limited 
choice  of  carriers 
depending 
on 
travel 
preferred 
time)  

Retained 
for 
policy 
options 

no 

Provision  of  a  key 
facts document 

broad 
Mixed: 
from 
support 
and 
consumers 
governments, 
air 
carriers  and  travel 
agents/tour 
operators 

are 

EN 

+ 

- 

+ 

+ 

no 

Issue  not  related  to 
scope 
travel 
of 
disruptions 

122 

EN 

 
  
 
 
 
Define 
baggage allowances 

minimum 

Define 
standard 
product 

minimum 
airline 

to 

Airlines 
give 
financial  assistance 
when 
baggage 
delayed 

opposed 

Mixed;  air  carriers 
and  most 
travel 
agents/tour 
operators  opposed, 
support 
from 
airports  and  travel 
mixed 
retailers, 
responses 
from 
other 
stakeholder 
groups 

Mixed;  air  carriers 
and  most 
travel 
agents/tour 
operators  opposed, 
from 
support 
airports  and  travel 
mixed 
retailers, 
responses 
from 
stakeholder 
other 
groups; 
also 
different  views  as 
to 
of 
content 
service  

Mixed:  air  carriers 
and 
travel 
agents/tour 
operators  opposed, 
in 
consumers 
favour, 
other 
stakeholders mixed 

- 

0 

unclear 

+ 

no 

Practical difficulties 

Issue  not  related  to 
travel disruptions 

- 

0 

unclear 

+ 

no 

Practical difficulties 

Issue  not  related  to 
travel disruptions 

+ 

of 

- 

Risk 
incompatibility 
with 
Convention 

Montreal 

- 

+ 

no 

Very costly, even if 
limited to overnight 
delays, 
would 
increase  total  cost 
of  Regulation  261 
by 10% 

EN 

123 

EN 

 
  
Prove 
baggage 

content 

of 

responses, 
most 

Mixed 
but 
stakeholders 
pointed 
practical problems 

towards 

Airlines  required  to 
delayed 
transport 
baggage 
final 
destination 

to 

Mixed:  air  carriers 
other 
opposed, 
stakeholders  mostly 
in favour or neutral 

+ 

- 

Potential 
with 
Convention 

conflict 
Montreal 

0 

- 

Practical  problems 
(e.g. 
X-rays, 
weight) 

Some  measures  too 
costly (e.g.X-rays) 

Airlines  required  to 
refund  baggage  fees 
when baggage lost 

Mixed:  air  carriers 
opposed, 
other 
stakeholders  mostly 
in favour or neutral 

- 

+/0 

Potential 
with 
Convention 

conflict 
Montreal 

No  impact  for  air 
carriers  that  do  not 
charge 
luggage 
separately 

NEBs  to  check  on 
compliance 
with 
consumer law 

/ 

+/- 

- 

Requested 
consumer 
organisations 

by 

Measures 
for 
compliance  already 
inserted  in  relevant 
law, 
consumer 
could  be  addressed 
by 
interpretative 
guidance 

Outside  of  scope  of 
Regulation 
261/2004,  does  not 
travel 
to 
relate 
disruptions  nor  to 
policy 
the 
objectives  of 
this 
assessment 

Additional  cost  for 
NEBs  (€0.9  million 
NPV 
without 
complaint  handling 
and 
NPV 
with 
complaint handling) 

€278  million 

0 

impact, 
Limited 
already  done  by 
most  airlines  (they 
are  liable  for  cost 
anyhow) 

+ 

+ 

- 

+ 

+ 

+ 

+ 

No 

no 

no 

no 

EN 

124 

EN 

 
  
ANNEX 11: Preliminary screening of policy measures – detailed analysis of some 
measures 

1. Rejected measures enjoying stakeholder support 

Express compensation as % of ticket value 

The measure would allow adjusting compensation levels in relation to the revenues of 
the air carriers, thereby contributing to policy objective 2.2.  

Many airlines and their representative associations supported such a measure although 
some  legacy  carriers  do  not  support  this,  partly  because  there  could  be  an  increase  in 
compensation  payable  to  holders  of  premium  class  and  flexible  economy  tickets. 
Consumer  representatives  and  some  NEBs  argued  that  relating  compensation  to  ticket 
price  was  not  appropriate  as  the  amount  of  inconvenience  passengers  suffer  is  not 
related to the amount they paid for the ticket. 

However,  the  measure  could  not  be  retained  due  to  practical  and  potential  legal 
obstacles to its implementation: 

• 

• 

Practical  obstacles:  the  calculation  of  the  flight  price  -  to  which  the 
compensation  relates  -  could  become  complex  in  the  context  of  multiple-leg 
tickets  where  part  of  the  legs  are  affected  by  a  delay  or  cancellation.  More 
importantly, this measure would create difficulties with respect to flights sold 
as  part  of  a  package:  in  these  cases  it  is  not  clear  what  the  ticket  price  is, 
because  there  is  a  single  price  covering  flights,  accommodation  and  possibly 
other  services.  This  could  lead  to  disputes  between  consumers  and  tour 
operators/airlines. 

Legal issues: the consistency of such a measure with the Montreal Convention 
cannot  be  taken  for  granted.  If  the  Court  reconciles  the  Sturgeon  judgement 
and  the  Convention  in  relation  to  compensation  for  delay,  for  example 
considering  the  compensation  to  be  ‘standardised  assistance’  in  line  with  the 
recent  opinion  of  the  Advocate  General66,  it  would  not  be  inconceivable  that 
the  Court  would  also  consider  compensation  related  to  ticket  price  as  being 
standardised, and therefore not inconsistent with the Convention. This view is 
supported  by  paragraph  46  of  the  IATA  judgment  which  states  that  the 
measures in Article 6, including reimbursement of the ticket price (the amount 
of  which  can  vary  from  passenger  to  passenger),  are  standardised  assistance. 
However,  it  should  also  be  noted  that  in  paragraph  55  the  Advocate  General 
referred  to  the  fact  that  compensation  was  ‘flat-rate’  contributed  to  the 
conclusion that this compensation was ‘standardised assistance’, and therefore 
it  cannot  be  excluded  that  the  Court  could  find  compensation  based  on  the 
ticket  price  to  be  inconsistent  with  the  Convention  even  if  flat-rate 
compensation was not. 

To avoid the cited practical problems or to avoid possible legal uncertainty with regard 
to this measure, it has not been retained for inclusion in the assessed policy options. 

Link compensation to delay at arrival 

66 

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As an alternative to either fixed-rate compensation or compensation based on the value 
of the ticket, compensation could be based on the length of the delay. For cancellations 
or denied boarding this would, in line with Article 5(1)(c) and Article 7(2), be based on 
the  amount  of  delay  in  arrival  at  the  destination,  based  on  when  the  passenger  is  first 
offered rerouting. 

However, there are practical and legal issues with this measure: 

• 

• 

Practical problems: it may be very difficult to determine when a passenger was 
offered  rerouting,  and  this  may  also  depend  in  part  on  actions  taken  by  the 
passenger.  Many  airlines  will  email  or  send  SMS  messages  to  passengers 
whose  flights  are  cancelled  and  invite  them  to  go  to  the  website  to  rebook, 
rather than come to the airport. The passenger may not do so immediately and 
therefore  may  lose  the  opportunity  to  be  rerouted  at  the  first  opportunity. 
Furthermore, the actual time of rerouting is not a helpful alternative to the time 
when  the  passenger  was  first  offered  rerouting,  because  passengers  do  not 
always prefer to be rerouted on the first flight. For example, if a passenger is 
required  to  stay  overnight  as  a  result  of  a  cancellation,  and  the  first  available 
flight departs at 6am, the passenger might prefer to wait for a flight later in the 
day. 

Legal issues: there is a risk of inconsistency with the Montreal Convention, as 
this  specifies  airlines’ liability  for damage caused  by  delay. Even if  the court 
were  to  consider  fixed-rate  compensation  to  be  in  line  with  the  Montreal 
Convention as ‘standardised assistance’ or something similar, there could be an 
argument that per-hour compensation conflicts, as it is less standardised and a 
closer proxy to the actual damage that the passenger has suffered. 

To avoid the cited practical problems or to avoid possible legal uncertainty with regard 
to this measure, it has not been retained for inclusion in the assessed policy options. 

Extend the scope of the Regulation to non-EU carriers 

Extend the scope of the Regulation to all flights to the EU operated by non-EU carriers 

At present the Regulation applies to flights operated by EU carriers to the EU, except 
where passengers are offered compensation or assistance in the third country. There are 
two reasons why an extension was considered to flights into the EU operated by non-
EU carriers: 

- better protection of the concerned passengers 

- further limit possible impact on passenger rights on competition between EU and non-
EU air carriers 

However, the option was discarded because of legal risks associated with this measure: 
the  application  of  the  Regulation  to  flights  to  the  EU  could  be  argued  to  be  extra-
territorial.  In  the  public  consultation  some  airlines  argued  that  the  CJEU’s  decision 
about  the  Emissions  Trading  Scheme  (ETS)  in  the  case  Air  Transport  Association  of 
America  and  Others  v  Secretary  of  State  for  Energy  and  Climate  Change  (C336/10) 
provided a precedent that this would not be extra-territorial; however, in that judgment, 
the Court held that it is the act of arriving at or departing from airports located within 
the EU, which  is  conduct occurring  within  EU territory, that  triggers the ETS scheme 
and it is irrelevant that part of the flight itself is carried out outside the EU. An event of 
denied boarding, cancellation and most delays in relation to flights to the EU by non-EU 

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air carriers would occur whilst the passengers and aircraft were in a third country and 
therefore there is a real risk that the argument that the triggering event occurred within 
the EU would not be accepted by the Court. An alternative was then considered: 

Extend the scope of the Regulation to non-EU carriers where the marketing carrier is 
an EU carrier 

This measure meets a number of practical obstacles with regard to care and assistance 
because the marketing carrier is not in a position to provide any as he is most likely not 
present  in  case  of  travel  disruptions.  It  might  be  easier  to  implement  with  regard  to 
financial  compensation,  but  the  measure  would  not  help  to  balance  the  level-playing 
field, rather to the contrary as EU carriers would be liable  for  disruptions with flights 
operated by non-EU carriers. 

Also for passengers, this measure is of limited use. The consultant estimated that 10 to 
20% of passengers on non-EU airline flights to the EU would benefit from this change. 

Given these limitations, the measure was not included in the assessed policy options. 

2. Further explanations on some of the retained measures 

Clarify that rescheduling to be treated as delay in certain circumstances 

The Regulation is not clear at present what rights and obligations apply with respect to 
schedule  changes,  which  would  generally  be  notified  in  advance  to  passengers.  Some 
NEBs  considered  that  some  advance  schedule  changes  were  in  effect  cancellations  or 
long  delays  which  were  disguised  as  something  else  in  order  to  avoid  paying 
compensation. NEBs also considered that the lack of clear regulation of this issue was a 
barrier to effective enforcement and to passengers obtaining appropriate redress. 

It  may  also  be  considered  that  airlines  are  already  obliged  to  offer  passengers 
alternatives or a refund in the case of significant schedule changes, as a refusal to do so 
would  conflict  with  Directive  93/13/EEC  on  unfair  contract  terms.  The  UK  Office  of 
Fair  Trading  (OFT)  took  action  on  this  basis  in  2000  and  2003,  requiring  airlines  to 
offer  a  refund  in  the  event  of  significant  schedule  changes67.  However,  as  with  other 
rights based on this Directive, this is a matter of interpretation.  

The present measure consists in clarifying passengers' rights in these circumstances. It 
basically  consists  in  specifying  that  there  is  a  right  to  refund  when  the  schedule  is 
changed by more than 5 hours (similar to delay); and a right to financial compensation 
where the schedule change is of more than 3 (options 2b and 3) or 5 hours (options 1 
and 2a).  

It is not possible to quantify the impact on passengers or the economic cost arising from 
this,  as  the  existing  legal  provisions  are  not  clear  (so  it  is  not  clear  what  the  baseline 
position  would  be),  and  also  because  no  data  on  the  proportion  of  flights  with 
significant advance schedule changes is available.  

NEBs to publish airline-specific information with regard to sanctions 

Under this option, the NEBs (and the Commission) would  render public the sanctions 
against airlines for non-compliance with Regulation 261/2004. This option also allows 
the passenger to make an informed choice of airline when booking a flight. Information 
on sanctions gives a view on the compliance of airlines with regulation 261/2004. The 

67 

OFT (2000): Unfair contract terms case report bulletin 12 

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publication  of  sanctions  would  act  as  a  deterrent  for  airlines  to  neglect  passengers' 
rights. 

Although  also  required  by  consumer  associations,  the  publication  of  statistics  on 
complaints would be less useful as such data would not necessarily properly reflect the 
level  of  compliance  of  airlines:  airlines  said  that  they  would  appear  to  have  far  more 
complaints  if  they  operated  in  States  where  it  was  easier  to  complain  to  the  NEB,  or 
where  commercial  claims  organisations  were  active  and  forwarded  complaints  to  the 
NEB.  Data  on  complaints  also  seem  to  indicate  that  the  residents  of  some  Member 
States  are  more  inclined  to  complain  than  others,  which  would  reflect  badly  on  the 
airlines active in those States, even if this was not objectively founded. In this sense, the 
publication  of  sanctions  appears  to  be  less  sensitive  to  such  different  "complaint 
traditions"  as  they  result  from  the  enforcement  action  of  the  NEBs  and  are  not 
necessarily related to the number of complaints. 

Care/assistance  and  compensation  in  case  of  missed  connecting  flights  (incl. 
consideration of delay at departure vs delay at arrival) 

Current situation 

Whenever  the  flight  or  the  connecting  flight  that  was  meant  to  take  place  from  the 
airport  of  departure  or  of  connection  incurs  a  long  delay  or  is  cancelled,  then  the 
Regulation  applies:  in  particular  the  right  to  assistance,  to  care  (while  waiting  for  the 
delayed  flight  or  the  rerouting)  and  to  compensation  (where  certain  time  limits  for 
rerouting are not respected and where extraordinary circumstances do not apply).  

However, under the present Regulation 261/2004, where a passenger misses an onward 
connecting flight, the text of the Regulation does not explicitly state his rights but they 
have been interpreted by the CJEU and explained by the Commission: 

• 

• 

Cancellation  of  the  incoming  flight:  if  a  passenger  misses  a  connecting  flight 
because the incoming flight was cancelled, he clearly has a right to assistance 
and care while waiting for the rerouting to the final destination and – except in 
extraordinary circumstances – he may claim compensation. 

Delay of the incoming flight: based on the wording of the Regulation, and the 
interpretation made by the CJEU and the Commission in COM of April 2011. 
If the passenger suffers a delay at the connecting airport that is longer than the 
time  threshold  for  care  and  assistance  (2,  3  or  4  hours  depending  on  flight 
distance), then the passenger has a right to care and assistance at the connecting 
airport.  He  may  also  claim  compensation  if  the  delay  at  the  final  destination 
exceeds 3 hours (except exceptional circumstances).  

In  the  Commission's  view,  the  protection  of  Article  6  (rights  at  the  departure)  is  not 
related  to  the  right  to  compensation  (rights  at  final  destination).  Therefore,  in  the 
calculations of the baseline scenario, the right to compensation in case of a short delay 
leading to a delay over 3 hours at the final destination due to a missed connection has 
been included. 

In  other  words,  the  Regulation  in  its  current  wording  seems  to  implement  protection 
measures only for the inconvenience suffered by passengers resulting from an incident 
that affects the flight that they were going to take. The interpretations made by the Court 
and the Commission in order to take account of primary law (in particular the principle 
of  equal  treatment),  have  clarified  that  these  rights  also  apply  to  the  inconvenience 

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suffered  by  passengers  resulting  from  an  incident  that  affected  a  previous  flight,  for 
such  inconvenience  is  similar  to  all  stranded  passengers  whether  the  delay  or  the 
cancellation  concern  the  first,  the  previous,  or  the  following  flight.  The  right  to 
compensation for delay, by taking into account the arrival at the final destination, covers 
all passengers similarly (whether travelling on a direct flight or with successive flights). 

Clarification 

Notwithstanding the interpretation of the ECJ, it is obvious that the present text of the 
Regulation could be clarified and simplified to allow a more effective application. 

Such  simplification  needs  to  take  into  account  the  link  between  passenger  rights  for 
connecting  flights  and  the  definitions  for  "delay"  and  for  "flight".  Clarifying  and 
redefining  these  definitions  could  significantly  help  to  simplify  the  regulation  and 
clarify the existing situation in relation to connecting flights. 

Definition of delay 

The Sturgeon judgement refers to a right to compensation based on delay at the time of 
arrival at the final destination. This could be different from the delay on departure, for 
a number of reasons: 

• 

• 

particularly for long haul flights, the duration of the journey can be impacted 
by factors such as wind direction which are outside the control of the carrier, 
and therefore a flight could be delayed by more than 3 hours on arrival even if 
the delay on departure was 1-2 hours; and 

a  small  delay,  for  whatever  reason,  may  nonetheless  lead  to  a  missed 
connection and therefore a significant delay on arrival at the passenger's final 
destination. 

There  are  arguments  in  favour  of  using  the  time  at  departure  instead  of  the  time  at 
arrival,  mainly  because  it  simplifies  many  issues.  Calculation  of  delay  based  on  the 
time of arrival raises practical difficulties:  

• 

• 

it  raises  difficult  issues  of  territorial  application  and  of  allocation  of 
responsibility between airlines in cases of connecting flights. For example, if a 
passenger takes a flight on an EU airline from London to Chicago and misses a 
connection  onto  a  US  airline,  either  due  to  a  small  delay  to  the  first  flight  or 
even  due  to  delays  at  the  airport  on  arrival,  it  is  not  clear  which  airline  is 
responsible or whether the event is within the scope of the Regulation at all. 

a requirement based on time of arrival would be harder to enforce: in cases of 
dispute,  it  may  be  difficult  for  the  NEB  to  check  the  actual  time  a  passenger 
arrived  at  their  destination,  particularly  where  the  passenger  has  had  to  be 
rerouted on a connecting flight, as this will usually be in another Member State 
or a third country. 

However,  the  Sturgeon  judgement  has  clearly  made  the  link  between  the  right  to 
compensation for long delays and the right to compensation for cancellations. Indeed, it 
refers to article 5.c(iii) where compensation for a cancellation is not due if the passenger 
is rerouted, allowing him to depart no more than one hour before the scheduled time of 
departure and to reach the final destination less than two hours after the scheduled time 
of arrival, thus resulting in a loss of time of no more than 3 hours in total. It would be 
inconsistent with the principle of equal treatment underlying the Sturgeon judgement, if 

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the delay at departure would be taken as a reference for long delays and delay at arrival 
for cancellations. But using the reference to delay at departure could entice the airline to 
quickly  reroute  the  passenger  with  an  (alternative)  indirect  flight,  even  if  this  indirect 
flight causes the passenger additional delays (e.g. long detour). 

Determining  the  entitlement  to  compensation  from  the  time  of  arrival  at  the  final 
destination – in both instances, i.e. long delay or cancellation - would (particularly for 
connecting flights) benefit passengers by providing airlines with an incentive to reroute 
them to reach their destination sooner. And a reference to the time of arrival at the final 
destination,  after  all  connecting  flights,  would  better  relate  to  the  inconvenience  (in 
terms of loss of time) that the passenger actually suffers. 

Definition of flight 

The  rights  arising  on  connecting  points  are  also  linked  to  the  definition  given  to  the 
concept of "flight". 

A  "flight"  is  not  clearly  defined  in  the  Regulation,  raising  on  occasions  the  question 
whether a journey with connecting segments is to be considered as a single flight from 
the origin to the final destination or as a combination of several flights (see ECJ case C-
173/07 Emirates). 

It appears to be consistent with the existing rights in the regulation to define a flight as 
an  "air  transport  operation  between  two  airports".  Indeed,  such  definition  would  be 
consistent with references to "flight" in other parts of the regulation, such as in article 
2h  (definition  of  the  "final  destination"  which  refers  to  the  "destination  of  the  last 
flight")  or  the  articles  4,  5  and  6  triggering  rights  for  assistance  in  case  of  denied 
boarding,  long  delays  or  cancellations  (in  order  for  the  passenger  to  enjoy  a  right  to 
assistance in case of a long delay of the connecting flight at a connecting airport, every 
segment of his journey should be considered as a flight). 

Moreover, such definition would be consistent with definitions of "flight" in other EU 
aviation law (e.g. the air services Regulation 1008/2008, see article 2.5). 

Connecting flights – conclusion 

In  summary,  to  clarify  the  rights  arising  in  case  of  missed  connecting  flights,  the 
following  clarifications/modifications  to  the  regulation  are  included  in  the  retained 
policy options. They do not fundamentally change the rights of passengers, but they re-
establish legal certainty by clarifying and simplifying the text: 

• 

• 

• 

• 

a  flight  is  defined  as  an  "air  transport  operation  between  two  airports; 
intermediate stops for technical or operational purposes only shall not be taken 
into consideration"; 

a  connecting  flight  is  defined  as  "a  flight  which,  according  to  the  contract  of 
carriage, is intended to enable the passenger to arrive at the destination of the 
flight in time to be able to depart on another flight, or, where appropriate in the 
context, that other flight." 

the  right  to  assistance  is  determined  on  the  basis  of  the  delay  over  the 
scheduled time of the onward connecting flight 

the right to compensation is determined on the basis of the delay at arrival at 
the final destination 

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• 

the rights arising because of a missed connecting flight are explicitly specified 
in the regulation: 

• 

• 

the  carrier  operating  the  onward  connecting  flight  will  offer  assistance 
and rerouting (in so far that carrier is an EU carrier and/or the departing 
airport of the onward flight is situated in the EU) 

the  passenger  can  claim  compensation  from  the  carrier  which  failed  to 
operate  the  flight  to  the  connecting  airport  in  a  timely  manner,  if  the 
rerouting  causes  a  delay  at  arrival  at  the  final  destination  of  at  least  x 
hours (in so far that the operating carrier of the flight to the connecting 
airport  is  an  EU  carrier  and/or  the  departing  airport  of  this  flight  is 
situated in the EU) 

Obligation on travel agents to provide passenger contact details to the air carrier 

This measure is to be seen in conjunction with the measure to improve the provision of 
information on the flight disruption to passengers. Several stakeholder groups indicated 
that  during  disruptions,  early  information  of  the  passenger  on  the  cancellation  or  long 
delay of his flight is essential to prevent that the passengers travels to the airport in the 
first place. For doing so, the airline would need the passengers' contact details, which is 
often not the case when the flight was booked via a travel agent, and some travel agents 
cannot be reached outside the office hours. 

A measure was considered that consisted in a requirement for travel agents to have to 
provide passenger contact details to airlines, so that:  

• 

• 

the  airline  can  notify  the  passenger  in  advance  if  the  flight  is  cancelled  or 
rescheduled; and 

potentially,  the  airline  can  use  electronic  means  to  provide  information  or 
assistance in the event of disruption. 

This measure is strongly opposed by travel agents, primarily because they are concerned 
that  airlines  would  use  the  passenger  contact  details  for  commercial  purposes,  and 
therefore undermine their market position. However, it appears that IATA travel agents 
are already required to provide this information; IATA Resolution 830d on Reservations 
Procedures  for  Automated  Accredited  Agents  requires  the  travel  agent  to  provide 
passengers’ contact details to airlines. However, many travel agents seem to enter their 
own contact details rather than those of the passenger.  

If the Regulation was revised to require travel agents to pass this information to airlines, 
this concern could be partly addressed if the Regulation also prohibited the airlines from 
using  the  information  for  other  commercial  purposes.  It  should  only  be  used  for 
contacting  the  passenger  in  the  event  of  disruption.  However,  some  travel  agent 
representatives  were  not  confident  that  airlines  would  comply  with  such  a  restriction, 
and  considered  that  it  would  be  difficult  to  enforce,  partly  due  to  the  difficulty  of 
monitoring use of information within the systems concerned. 

Travel agent representatives have suggested that as an alternative the travel agent could 
be  responsible  for  contacting  the  passenger  to  inform  them  about  disruption.  Many 
already  do  this  in  any  case,  in  the  event  of  advance  schedule  changes  or  planned 
cancellations. However, it is not clear this would be sufficient to allow passengers to be 
contacted in the event of last-minute disruption, or to allow use of SMS or in the future 

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smartphones  for  airlines  to  provide  information  and  vouchers  for  assistance  to 
passengers in the event of disruption.  

It  should  be  noted  that  any  such  a  measure  would  have  to  comply  with  Directive 
95/46/EC on data protection. As contact details would be considered personal data, the 
travel agent would need to seek the passenger’s consent to pass the details to the airline. 
This  consent  would  have  to  be  specific:  it  would  not  be  sufficient  for  travel  agents’ 
Terms and Conditions to state that the data would be passed on, although a ‘tick box’ on 
the booking page of the website should be sufficient.  

If the data was to be transferred to carriers based in non-EEA States, this would raise 
issues  with  respect  to  those  based  in  States  that  do  not  have  equivalent  levels  of  data 
protection. In these cases the passenger would have to provide enhanced consent. This 
would  mean  that  the  travel  agent  would  have  to  inform  the  passenger  of  the  specific 
State that the data was to be transferred to, and obtain specific agreement to transfer the 
data  to  that  State.  This  issue  could  be  avoided  by  restricting  the  requirement  on  data 
transfer to EEA airlines. This might still enable most of the benefits to be generated, as 
airlines operating non-EU services would usually have more extensive staffing at each 
airport to inform and assist passengers in cases of disruption. 

Cost 

This measure would require a one-off change to be made to the GDS, to give the airline 
access to personal data subject a consent field, which would need to be added. On the 
basis of information provided by one of the GDS, this cost would be €1-4 million for 
each  of  the  3  main  GDS.  Although  this  is  clearly  a  significant  amount,  it  would  be  a 
one-off,  and  therefore  the  annual  cost  over  the  impact  assessment  period  would  be 
relatively low.  

This option would also require a one-off change to be made to travel agent websites to 
introduce a ‘tick box’ consent to transfer of data. The costs of this should be relatively 
low as the consent is quite simple – a total one-off cost for all GDS and travel agents of 
approximately €31 million NPV has been estimated.  

Airlines to designate responsible staff member in all airports 

Consumer  representatives  showed  strong  support  for  an  obligation  for  airlines  to 
provide  a  contact  person  at  the  airport  to  assist  in  the  event  of  disruption.  Some 
highlighted  that  it  can  be  difficult  or  impossible  to  contact  anyone  in  the  event  of 
disruption  who  can  arrange  the  care  and  assistance  required;  even  if  ticket  desk  or 
check-in staff are present, they are often third party contractors and may not have the 
authority  to  arrange  any  assistance.  The  option  was  also  supported  by  most  airport 
representatives, and NEBs. 

It  should  be  noted  that  the  existing  Regulation  already  requires  carriers  to  provide 
information  in  the  event  of  disruption.  Article  14(2)  requires  airlines  to  provide 
passengers  with  a  notice  specifying  their  rights,  and  Article  5(2)  requires  airlines  to 
inform  passengers  whose  flights  are  cancelled  about  alternative  transport  options. 
Articles 5, 6, 8 and 9 are all clear that passengers must be offered care and assistance. It 
is difficult to see how these requirements could be met without adequate staffing at the 
airport, although this might be third party ground handlers rather than their own staff. In 
this  sense,  the  suggested  measure  rather  refers  to  the  means  employed  than  to  the 
objective to be attained. 

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Cost  estimation  were  made  under  the  assumption  that  one  member  of  staff  would  be 
required for all airlines at all airports within the EU at which they operate (on average) 
at least one daily departure, and that this obligation would be extended for EU carriers 
to  EU-bound  departures  from  non-EU  airports.  In  this  context,  although  in  general 
airlines  will  use  their  existing  ground  staff  or  contractors  (such  as  check-in  agents), 
some issues would have to be taken into consideration: 

• 

• 

Given  the  financial  significance  of  the  decisions  they  would  be  making,  the 
staff  would  probably  need  to  be  better  qualified  and  hence  higher  paid  than 
standard passenger service staff. 

If  they  were  to  make  decisions  about  assistance,  rerouting  etc.  without 
necessarily checking with central control, they would need reasonably detailed 
training  in  the  approach  to  follow  –  2  days  per  staff  member  per  year  were 
assumed.  

The  external  consultant  has  estimated  that  this  measure  would  require  an  incremental 
economic cost of €416 million NPV. 

Hence, although the measure would be beneficial in addressing the policy objectives to 
maintain  and  improve  passenger  protection  –  primarily  by  providing  a  means  for 
passengers  to  obtain  the  rights  to  which  they  are  already  entitled  –  it  would  be  at  the 
expense of a potentially relatively significant increase in the economic cost for airlines. 

The measure was nevertheless retained for option 3 as that option is inspired by the EP 
report that included this measure. 

Ban "no show" policy 

Sequential use of coupons 

Most network carrier Conditions of Carriage state that, if a passenger does not show up 
for a particular flight, return or onward reservations may be cancelled. Airlines argued 
that  rules  requiring  the  full  and  sequential  use  of  coupons  were  necessary  in  order  to 
reflect different levels of competition and protect their yield management systems. For 
example, a carrier may offer a lower fare for indirect transport from A via B to C than it 
does on the direct flight from B to C, because it has to offer lower fares for the indirect 
route  in  order  to  compete  with  other  airlines  serving  the  route  directly;  in  contrast,  it 
may  face  limited  competition  for  direct  flights  from  B  to  C  and  therefore  be  able  to 
charge a higher price. The airline would not be able to do this if a passenger could buy a 
cheaper ticket from A to C, but then take the flight only from B to C only. 

If  such  "no  show"  policies  for  the  sequential  use  of  coupons  were  banned,  airlines 
would not able to offer lower prices in competitive indirect markets. This could lead to 
a  reduction  of  competition  on  the  affected  routes  and  would  be  to  the  detriment  of 
consumers,  especially  the  less  time-sensitive  travellers  that  would  have  opted  for  a 
longer but less expensive indirect flight. 

Use of the return ticket when the outward ticket was not used 

The  main  argument  presented  by  the  airlines  for  why  the  rule  may  be  in  the  public 
interest  (by  enabling  indirect  tickets  which  use  up  spare  capacity  to  be  sold  at 
competitive  prices)  does  not  apply  in  this  case.  A  rule  such  as  this  should  not  be 
necessary  in  most  cases  to  protect  airlines’  revenue  management  systems:  although 
some  airlines  still  require  passengers  to  buy  return  tickets  to  obtain  lower  fares,  this 

EN 

133 

   EN 

 
practice  is  becoming  rarer,  and  in  any  case  passengers  can  already  circumvent  it  by 
buying a return ticket and not using the return segment.  

Airlines said that some non-EU States only allow passengers to be carried to/from the 
State on return flights; this often applies to charter flights but can apply to other flights 
as well. In this case an airline might not be permitted to carry a passenger on a return 
segment if the passenger had not taken the outward segment, and so this measure was 
pursued, there would have to be an exemption for cases such as this.  

This measure should have limited impact on the objective of avoiding an unreasonable 
economic  burden  -  although  it  would  have  a  negative  impact  on  airline  revenue 
management in some circumstances. There would need to be an exemption for transport 
to/from non-EU States where a rule to this effect is necessary to comply with local law; 
and  to  avoid  undermining  airlines’  ability  to  offer  lower  fares  on  competitive  indirect 
routes, any such provision should be clearly limited to a simple return flight where the 
origin and return points are the same. 

NEBs to cover baggage issues of the Montreal Convention 

At  present,  Regulation  2027/97  and  the  Montreal  Convention  define  air  carrier 
obligations  with  respect  to  baggage,  but  there  is  no  requirement  to  have  sanctions  in 
national law or to ensure that the legislation is respected. Some States have undertaken 
enforcement:  for  example,  in  Spain,  AESA  has  imposed  sanctions  for  provision  of 
inaccurate information on liability; and in the UK, the OFT has required various carriers 
to change their Conditions of Carriage. However, in most cases there is no enforcement.  

Some NEBs including those for the UK and Spain do handle complaints about baggage 
issues.  Their  scope  is  however  limited  to  informing  passengers  of  their  rights. 
Passengers must take civil court action themselves to obtain redress. 

There  is  limited  evidence  available  on  compliance  with  these  requirements.  This  was 
not generally raised as a significant issue by consumer representatives interviewed for 
this study, but the SDG 2008 study of airline Conditions of Carriage found that around 
40%  of  carriers’  Conditions  of  Carriage  were  significantly  inconsistent  with  the 
Convention. 

It  could  therefore  be  useful  to  extend  the  scope  of  action  of  the  NEBs  to  the 
enforcement and/or the complaint handling of baggage issues. 

In its 2012 study, SDG estimated the cost of complaint handling by taking as reference 
the number of complaints received by the UK authorities and the NEBs' current costs. It 
found that complaint handling for luggage issues would significantly increase the cost 
of  the  NEBs.  Complaint  handling  of  baggage  related  issues  is  so  complex  – 
compensation  is  not  standardised  but  is  evaluated  on  individual  damage  or  loss  -  that 
national enforcement bodies would need to raise their  resources by  more than  50% to 
cope with such complaints. Additional costs for NEBs are estimated at €246.0 million 
NPV.  

Costs would be much lower if NEBs limited their activity to review of carriers’ general 
policies  and  procedures  on  baggage  and  Conditions  of  Carriage,  undertaking  spot 
checks and inspections where appropriate. If each NEB would be required to check the 
policies of 12 airlines, and if each inspection would take half a day, the cost to NEBs 
will be €50,149, or €0.5 million NPV. 

EN 

134 

   EN 

 
Given  the  financial  constraints  on  NEBs,  only  the  measure  with  enforcement  but 
without complaint handling was taken up in the policy options. 

Compel  air  carriers  to  accept  the  Property  Irregularity  Report  (PIR)  for  baggage 
complaints 

Article  31  of  the  Montreal  Convention  defines  quite  short  limits  for  complaints  about 
delay  or  damage  to  baggage:  there  is  a  7  day  time  limit  from  receipt  for  claims 
regarding damage to baggage, and a 21 day limit for delay. There is no limit for claims 
about loss of baggage, other than the general 2 year limitation period for claims in the 
Convention. 

Consumer representatives and many NEBs argued that the current deadlines are unfair 
on consumers. They identified that there was a particular issue when: 

• 

• 

passengers  are  on  holiday  and  there  is  a  problem  on  the  outward  flight,  they 
may  not  try  to  complain  until  they  have  returned  home,  by  which  time  the 
deadline may have expired; or 

passengers  submit  a  PIR  (Property  Irregularity  Report)  at  the  airport  and 
therefore believe that they have submitted a claim, but do not realise that this is 
not always considered sufficient to constitute a claim under the Convention. 

As it is not possible to extend the deadline without modifying the Montreal Convention, 
an alternative measure has been considered that would generate most of the benefits of 
such  an  extension.  Under  this  measure,  air  carriers  would  be  required  in  the  event  of 
lost,  delayed  or  damaged  baggage,  reported  at  the  airport,  to  issue  a  PIR  to  the 
passenger to complete at the airport, and then to accept this PIR as a claim which meets 
the  time  limits  for  the  purposes  of  the  Convention.  If  a  carrier  did  not  issue  such  a 
document  and  as  a  result  the  passenger  failed  to  claim  before  the  time  limit  in  the 
Montreal Convention, the passenger could take action against the carrier for the damage 
he/she suffered from the carrier’s failure to issue the PIR.  

There  should  not  be  any  incremental  economic  burden  associated  with  this  option,  as 
carriers should already issue passengers with a PIR at the airport in the event of delayed 
or damaged baggage. 

Better protection for damages/loss of mobility equipment 

Current international legal framework 

Under the Montreal Convention, as mobility equipment is 'baggage in the sense of the 
Convention', if an item of mobility equipment is damaged or lost, the limit on liability 
specified  in  the  Montreal  Convention  (1,131  SDRs)  applies.  The  value  of  mobility 
equipment can however be higher than the limits of liability under the Convention. 

When  it  comes  to  the  liability  of  air  carriers  for  the  transportation  of  mobility 
equipment, it is necessary to put this aspect into a broader context, taking due account 
of the following elements and pieces of legislation: 

• 

Under  International  Law,  the  UN  Convention  on  the  Rights  of  Persons  with 
Disabilities, which has the same legal value as the Montreal Convention, aims 
at  promoting,  protecting  and  ensuring  "the  full  and  equal  enjoyment  of  all 
human  rights  and  fundamental  freedoms  by  all  persons  with  disabilities". 
Indeed,  "various  barriers  may  hinder  their  full  and  effective  participation  in 
society on an equal basis with others".  

EN 

135 

   EN 

 
• 

• 

• 

• 

The EU principle of non-discrimination applies to discriminations on ground of 
disability;  this  is  particularly  highlighted  in  in  Article  21  concerning  non-
discrimination  of  the  Charter  of  Fundamental  Rights  of  the  European  Union 
which  is  primary  law68.  Furthermore,  Article  26  of  the  Charter  on  the 
integration  of  persons  with  disabilities  stipulates  that  "The  Union  recognises 
and  respects  the  right  of  persons  with  disabilities  to  benefit  from  measures 
designed  to  ensure  their  independence,  social  and  occupational  integration 
and participation in the life of the community."  

Regulation  1107/2006  concerning  the  rights  of  disabled  persons  and  persons 
with  reduced  mobility  when  travelling  by  air,  aims  at  ensuring  that  disabled 
persons  and  persons  with  reduced  mobility  have  the  same  right  as  all  other 
citizens  to  free  movement,  freedom  of  choice  and  non-discrimination.  The 
Regulation  notably  ensures  that  PRMs  and  passengers  with  reduced  mobility 
receive appropriate assistance so that they are protected against discrimination. 
In Article 12 the Regulation stipulates that in case of lost or damaged mobility 
equipment on board aircraft, the passenger shall be compensated, in accordance 
with  rules  of  international,  Community  and  national  law.  This  provision  does 
not address the issue further. 

In other transport modes (rail, bus and coach and waterborne transport), there 
are  specific  rules  to  protect  disabled  passengers  and  passengers  with  reduced 
mobility  in  case  of  loss,  damage  or  delay  of  mobility  equipment,  notably  by 
excluding a compensation limit but by relating the compensation to the cost of 
repair or replacement of the actual piece, of which value is refunded. 

This  protection  foreseen  in  other  modes  does  not  apply  to  aviation.  The 
Commission  signalled  in  its  Communication  of  2008  (COM  158  (2008))  that 
such a legal vacuum needs to be rapidly overcome. 

Available legal options for clarification 

Based  on  the  above  a  specific  measure  could  be  taken  under  EU  Law  with  regard  to 
damage or loss of mobility equipment. Such measure should however take into account 
the  Montreal  Convention  which  set  the  legal  regime  applicable  to  the  liability  of  air 
carriers  for  the  transportation  of  baggage,  including  mobility  equipment.  Excluding 
mobility equipment from the notion of baggage could be an option, but this presents the 
inconvenience of being seen as a way to bypass an international convention by using a 
different  vocabulary  while  the  Convention  already  addresses  the  issue  of  liability  for 
baggage in an exclusive way and is rather exhaustive in its terms. There is thus the risk 
of creating many legal issues and court proceedings.  

It  is  however  possible  to  find  a  solution  that  would  not  conflict  with  the  Montreal 
Convention,  as  the  possibility  to  waive  the  liability  limit  by  making  use  of  a  special 
declaration  of  interest  is  foreseen  in  Article  22  (2).  This  Article  stipulates  that  in  the 
case of destruction, loss, damage or delay in the carriage of baggage, the liability limit is 
1  131  SDRs,  "unless  the  passenger  has  made,  at  the  time  when  the  checked  baggage 
was  handed  over  to  the  carrier,  a  special  declaration  of  interest  in  delivery  at 
destination and has paid a supplementary sum if the case so requires. In that case the 

68 

2000/C 364/01 

EN 

136 

   EN 

 
                                                 
carrier will be liable to pay a sum not exceeding the declared sum, unless it proves that 
the sum is greater than the passenger's actual interest in delivery at destination." 

Some conclusions can be drawn based on the Montreal Convention: 

• 

• 

• 

• 

the  expression "if the case  so requires" infers that depending on the case, the 
passenger  may  or  may  not  have  to  pay  a  supplementary  sum  to  raise  the 
liability limit of the carrier, so that such increase of the liability limit can be for 
free.  In  fact,  carriers  do  not  have  necessarily  a  right  under  the  Convention  to 
charge  passengers  doing  a  special  declaration  of  interest.  Imposing  an 
obligation  to  offer  such  declaration  for  free  when  it  comes  to  mobility 
equipment does not seem a priori to conflict with the Convention. 

a  sum  should  be  declared  so  that  the  carrier  raises  its  liability  up  to  such 
specific sum. The value of the mobility equipment should be therefore known. 
This could be based on the bill of the equipment, or simply the value declared 
by  the  passenger  at  the  check-in.  In  case  of  a  declared  sum  that  would  go 
beyond  the  actual  value  of  the  mobility  equipment,  the  carrier  would  have  to 
prove, in case of a problem, that the sum is greater than the passenger's actual 
interest in delivery at destination. 

the special declaration of interest concerns checked item only, the limit of 1131 
SDRs  would  thus  continue  to  apply  to  mobility  equipment  when  it  is 
transported on board the aircraft.  

although  the  liability  limit  for  mobility  equipment  can  be  raised  to  cover  the 
full damage, any action for damage in relation to mobility equipment should be 
brought  subject  to  the  conditions  and  the  limits  set  out  in  the  Montreal 
Convention, notably in terms of timeframes to make a claim and the defences 
of the carrier foreseen in the Convention.  

Currently,  it  would  appear  that  the  concerned  passengers  are  not  adequately  informed 
about  the  possibility  to  make  such  a  special  declaration  of  interest  in  delivery  at 
destination at check-in or that air carriers sometimes request a high fee for making such 
a declaration. 

Therefore,  a  clarification  of  the  passenger's  rights  with  regard  to  the  specific 
transportation of wheelchairs and other mobility equipment and assistive device could 
be  achieved  by  directly  addressing  these  two  shortcomings  (via  the  addition  of  an 
Article in Regulation 889/2002): 

• 

• 

An obligation for carriers to inform all PRMs and disabled passengers and to 
give  them  the  opportunity  to  make  a  special  declaration  of  interest  for  their 
checked mobility equipment, of the value of the equipment concerned.  

The  amount  is  declared  by  the  PRM  at  the  time  when  the  checked  mobility 
equipment is handed over to the carrier. 

EN 

137 

   EN 

 
Table 44: Require airlines to provide contact details to the Commission 

ANNEX 12: Administrative cost and burden calculations 

Type of obligation

(category)

Action

Target groups

hour)

(hours)

Price

(per year)

entities

actions

costs (€)

costs (€)

(%)

burden (€)

Required actions 

(€ per 

Time 

Frequency 

of 

of 

outsourcing 

administrative 

costs 

administrative 

Submission of 

Submitting the 

Send contact details to 

Airline

(recurring) reports

information 

the Commission

Submission of 

Filing the information Update the list and 

European 

38

50

1

7

38

352

1

12

360

360

13,790

30%

9,653

1

12

4,221

30%

2,955

Tariff 

Number 

number 

and 

Total 

as usual 

Total 

Total 

Equipment 

Business 

(recurring) reports

Total

send to NEBs

Commission

Table 45: NEB reports to the Commission 

18,011

30%

12,608

Type of obligation

(category)

Action

Target groups

hour)

(hours)

Price

(per year)

entities

actions

costs (€)

costs (€)

(%)

burden (€)

Required actions 

(€ per 

Time 

Frequency 

of 

of 

outsourcing 

administrative 

costs 

administrative 

Tariff 

Number 

number 

and 

Total 

as usual 

Total 

Total 

Equipment 

Business 

Submission of 

Retrieving relevant 

Compile data on 

NEB

38

7

268

(recurring) reports

information from 

complaints and 

existing data

sanctions

Submission of 

Inspecting and 

Check information with 

NEB

(recurring) reports

checking 

other sources

Submission of 

Designing information 

Write and review the 

NEB

(recurring) reports

material

document

Submission of 

Submitting the 

Provide the report to 

NEB

(recurring) reports

information 

the Commission and 

reply to queries

Total

38

38

38

21

21

7

804

804

268

Table 46: Airlines to develop consistent procedures and contingency plans 

1

1

1

1

32

32

8,580

30%

6,006

32

32

32

32

32

32

25,740

30%

18,018

25,740

30%

18,018

8,580

30%

6,006

68,641

30%

48,049

EN 

138 

EN 

 
  
      
        
        
              
      
       
           
             
      
        
      
            
          
        
             
             
          
          
 
      
        
      
              
        
        
             
             
      
      
      
              
        
        
           
           
      
      
      
              
        
        
           
           
      
        
      
              
        
        
             
             
          
          
 
Type of obligation

(category)

Action

Target groups

hour)

(hours)

Price

(per year)

entities

actions

costs (€)

costs (€)

(%)

burden (€)

Required actions 

(€ per 

Time 

Frequency 

of 

of 

outsourcing 

administrative 

costs 

administrative 

Tariff 

Number 

number 

and 

Total 

as usual 

Total 

Total 

Equipment 

Business 

Submission of 

Retrieving relevant 

Compilation of 

Airline

38

35

1,341

(recurring) reports

information from 

information (additional 

existing data

cost in first year only)

Submission of 

Adjusting existing data Updating the 

Airline

(recurring) reports

information every year

Submission of 

Inspecting and 

Annual checking of 

NEB

(recurring) reports

checking 

information

Submission of 

Inspecting and 

Answering questions

Airline

38

38

38

7

7

4

268

268

134

1

1

12

2

(recurring) reports

checking 

Total

245

245

328,459

0%

328,459

245

245

32

374

245

374

65,692

100,298

50,149

0%

0%

0%

65,692

100,298

50,149

544,597

0%

544,597

Notes and assumptions:
We have assumed that this requirement would apply to every airline operating at least one daily scheduled or charter flight from an EU airport (245 airlines).
For EU airlines, NEBs for the airline's base state and any other state from which it had more than 10 departing flights per day, would check the information. For non-EU airlines, one NEB would check the information.
The total cost includes costs that would only be incurred in the first year. Costs for subsequent years would be lower.

Table 47: NEBs to check baggage issues (without complaint handling) 

Required actions 

(€ per 

Time 

Frequency 

of 

of 

outsourcing 

administrative 

costs 

administrative 

Type of obligation

(category)

Action

Target groups

hour)

(hours)

Price

(per year)

entities

actions

costs (€)

costs (€)

(%)

burden (€)

Inspection on behalf of 

Inspecting and 

Review of carriers' 

NEB

38

4

134

12

32

374

50,149

0%

50,149

Tariff 

Number 

number 

and 

Total 

as usual 

Total 

Total 

Equipment 

Business 

public authorities

checking 

general policies and 

procedures on baggage 

and Conditions of 

Carriage

Total

EN 

50,149

0%

50,149

139 

EN 

 
  
      
      
   
              
      
       
         
            
      
        
      
              
      
       
           
              
      
        
      
            
        
       
         
            
      
        
      
              
      
       
           
              
        
           
 
 
      
        
      
            
        
       
           
           
          
          
 
ANNEX 13: Summary presentation of the impact of measures and options on the 
compliance cost 

This annex only provides information with regard to the measures that were quantifiable 
based on reaosnably safe assumptions. 

The  compliance  cost  was  first  estimated  under  the  baseline  scenario,  based  on  the 
asssumptions and the methodology explained in annexes 8 and 15. A net present value 
(NPV)  of  the  compliance  cost  over  the  period  2015-2025  was  first  calculated.  The 
policy measures are then assumed to be implemented with effect from 1 January 2015, 
and the NPV of the compliance cost is then calculated for the same period 2015-2025. 
The  tables  below  indicate  the  difference  between  the  NPV  of  the  compliance  costs 
calculated with the impact of the policy measures and options, on the one hand, and the 
NPV of the complaince cost under the baseline, on the other hand. 

Each of the individual policy measures was first estimated on a stand-alone basis, i.e. 
assuming that all other elements of the Regulation were unchanged. A summary of the 
quantified impacts on compliance costs is presented in this annex. 

The assessed policy options are packages of measures. As the combined impact of the 
policy measures is not necessarily the same as the addition of the indificual impacts, the 
combined effects are shown in two synthetic tables at the end of this annex. 

As  in  the  main  text,  the  calculations  were  made  first  under  the  current  claim  rate 
(starting from 10% today and assuming a gradual increase by 0.5 percentage points per 
year)  and  then  under  the  100%  claim  rate  (theoretical  maximum  cost  when  all 
passnegers claim compensation). 

EN 

140 

   EN 

 
Table 48: Changing the frequency of compensation payments 

 (percentages 
show 
variations 
compared  to 
baseline) 

Baseline 

NPV  total  cost 
2015-25 

(in € million) 

Extend  the  scope  of 
extraordinary 
to 
circumstances 
cover  most  technical 
defaults 

the 
Increase 
delay 
threshold 
for  compensation 
from 3h to 5h  

the 
threshold 

Increase 
delay 
for 
compensation 
from 3h to 5h (0-
1500km), 
9h 
(1500-3500km), 
12h  (more  than 
3500km) 

Current 
claim 
rate 

100% 
claim 
rate 

Current 
claim rate 

100% 
claim 
rate 

Current 
claim 
rate 

100% 
claim 
rate 

Current 
claim 
rate 

100% 
claim 
rate 

215 

397 

-7% 

-25% 

-5% 

-17% 

-5% 

-17% 

555 

1819 

-18% 

-38% 

-24% 

-50% 

-32% 

-66% 

3516 

7271 

-9% 

-28% 

-8% 

-25% 

-11% 

-34% 

4501 

10076 

-10% 

-30% 

-8% 

-23% 

-12% 

-36% 

1644 

4088 

-12% 

-33% 

-10% 

-27% 

-15% 

-40% 

Regional 
carriers 

Charter 
carriers 

Low-cost 
carriers 

Network 
carriers 

Non-EU 
carriers 

Total 

10431 

23653 

-10% 

-31% 

-9% 

-26% 

-13% 

-38% 

 Source: 2012 SDG Study + Commission estimates 

EN 

141 

   EN 

 
 
Table  49:  Stronger  progressivity  of  compensation  (0-750km:  €75;  750-1500km: 
€150; 1500-3500km: €400; 3500km+: €500, (compens

ation adjusted for inflation) 

(percentages 
show  variations 
compared 
to 
baseline) 

Baseline 

NPV total cost 2015-25 

(in € million) 

Adjusted 
levels 

compensation 

Current 
claim rate 

100% claim 
rate 

Current 
claim rate 

100% claim 
rate 

Regional carriers 

215 

397 

-8% 

-26% 

Charter carriers 

555 

1819 

-11% 

-22% 

Low-cost carriers 

3516 

7271 

Network carriers 

4501 

10076 

Non-EU carriers 

1644 

4088 

-7% 

-8% 

-4% 

-24% 

-16% 

-9% 

Total 

10431 

23653 

-7% 

-18% 

 Source: 2012 SDG Study 

Table 50: Provision of care after 2h delay irrespective of flight distance 

 (percentages 
show  variations 
to 
compared 
baseline) 

Baseline 

NPV  total  cost  2015-25  (in 
€ million) 

2h  delay 
distances 

for  all 

flight 

Current 
claim rate 

100% claim 
rate 

Current 
claim rate 

100% claim 
rate 

Regional carriers 

215 

397 

-6% 

-3% 

Charter carriers 

555 

1819 

+18% 

+6% 

Low-cost carriers 

3516 

7271 

-2% 

-1% 

Network carriers 

4501 

10076 

+0% 

+0% 

Non-EU carriers 

1644 

4088 

+3.6% 

+2% 

Total 

10431 

23653 

+1% 

+0.5% 

 Source: 2012 SDG Study 

EN 

142 

   EN 

 
 
 
Table 51: Rerouting 

 (percentages 
show 
compared 
baseline) 

variation 
to 

Baseline 

NPV total cost 2015-
25 

(in € million) 

Obligation  to  provide 
rerouting  with  other 
if  not 
carriers/modes 
possible 
own 
on 
services on same day 

to 

Obligation 
offer 
case  of 
in 
rerouting 
delays  of  more  than  5 
hours 

Current 
claim 
rate 

100% 
claim 
rate 

Current 
claim rate 

100% 
claim rate 

Current 
claim rate 

100% 
claim rate 

Regional carriers 

215 

397 

Charter carriers 

555 

1819 

- 

- 

- 

- 

+1% 

+0% 

+11% 

+3% 

Low-cost carriers 

3516 

7271 

+0% 

+0% 

+2% 

+1% 

Network carriers 

4501 

10076 

- 

- 

+6% 

+3% 

Non-EU carriers 

1644 

4088 

+0% 

+0% 

+10% 

+4% 

Total 

10431 

23653 

+0% 

+0% 

+5% 

+2% 

 Source: 2012 SDG Study  

EN 

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   EN 

 
 
 
Table 52: recourse against third parties: first round effect (before costs are charged 
back to carriers) – maximum possible cost recovery from third parties 

 (percentages 
show 
compared 
baseline) 

variation 
to 

Baseline 

NPV total cost 2015-25 

(in € million) 

Recourse 
third 
parties – maximum amount 

against 

Current 
claim rate 

100% claim 
rate 

Current 
claim rate 

100% claim 
rate 

Regional carriers 

215 

397 

-51% 

-28% 

Charter carriers 

555 

1819 

-33% 

-10% 

Low-cost carriers 

3516 

7271 

-22% 

-11% 

Network carriers 

4501 

10076 

-35% 

-16% 

Non-EU carriers 

1644 

4088 

-29% 

-12% 

Total 

10431 

23653 

-30% 

-13% 

 Source: 2012 SDG Study 

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Table 53: Financing of industry fund under option 3  

It is assumed that the industry fund builds up sufficient contributions over 10 years to 
cover  the  costs  of  providing  assistance  in  an  exceptional  event  on  the  same  scale  as 
volcanic  ash  (costs  to  incur  after  a  cap  on  accommodation  of  4  days  ),  plus  its 
management costs. The management costs from the consultant's study on insolvency69 
were 85% for the general reserve funds for insolvencies – here, half of this (42.5%) was 
used because the management of this fund would be simpler (general reserve funds have 
to take over holiday bookings, deal with hoteliers etc). 

 (percentages 
show 
compared 
baseline) 

variation 
to 

Baseline 

NPV total cost 2015-25 

(in € million) 

Contributions  to  industry 
fund 

Current 
claim rate 

100% claim 
rate 

Current 
claim rate 

100% claim 
rate 

Regional carriers 

215 

397 

Charter carriers 

555 

1819 

Low-cost carriers 

3516 

7271 

+2% 

+4% 

+2% 

Network carriers 

4501 

10076 

+2% 

Non-EU carriers 

1644 

4088 

+2% 

+1% 

+1% 

+1% 

+1% 

+1% 

Total 

10431 

23653 

+2% 

+1% 

 Source: 2012 SDG Study 

69 

Study on passenger protection in the event of airline insolvency, Steer Davies Gleave, February 
2011 
(http://ec.europa.eu/transport/air/studies/doc/internal_market/2011-
insolvency_study_final_report_7mar.pdf) 

EN 

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Table  54:  Replacement  of  refreshments/meals/accomodation  by  insurance  offered 
to all passengers  

 (percentages 
show  variations 
compared 
to 
baseline) 

Baseline 

Insurance for care 

NPV total cost 2015-25 

(in € million) 

Current 
claim rate 

100% claim 
rate 

Current 
claim rate 

100% claim 
rate 

Regional carriers 

215 

397 

-84% 

-45% 

Charter carriers 

555 

1819 

-52% 

-16% 

Low-cost carriers 

3516 

7271 

-69% 

-33% 

Network carriers 

4501 

10076 

-68% 

-30% 

Non-EU carriers 

1644 

4088 

-63% 

-25% 

Total 

10431 

23653 

-67% 

-30% 

 Source: 2012 SDG Study 

EN 

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   EN 

 
 
Table  55:  Exemption  from  accomodation  obligation  routes  of  less  than  250  km 
served by aircraft with less than 80 seats  

 (percentages 
show  variations 
compared 
to 
baseline) 

Baseline 

NPV total cost 2015-25 

(in € million) 

Accommodation  exemption 
for small-scale operations 

Current 
claim rate 

100% claim 
rate 

Current 
claim rate 

100% claim 
rate 

Regional carriers 

215 

397 

-28% 

-15% 

Charter carriers 

555 

1819 

- 

Low-cost carriers 

3516 

7271 

Network carriers 

4501 

10076 

-0% 

-1% 

Non-EU carriers 

1644 

4088 

- 

- 

-0% 

-0% 

- 

Total 

10431 

23653 

-1% 

-0% 

 Source: 2012 SDG Study 

EN 

147 

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Table 56: Policy options – combined impact on total cost of Regulation 261 for carriers – under current claim rate 

 (compared 
baseline) 

to 

Baseline 

Option 1 

Option 2a 

Option 2b 

Option 3 

Option 4 

NPV 
total 
cost 2015-25 

(in 
million) 

€ 

Unchanged 
compensation 
levels 

Adjusted 
compensation 
levels 

Unchanged 
compensation 
levels 

Adjusted 
compensation 
levels 

Regional carriers 

215 

-88% 

-32% 

Charter carriers 

555 

-80% 

Low-cost carriers 

3516 

-81% 

Network carriers 

4501 

-81% 

Non-EU carriers 

1644 

-74% 

-4% 

-8% 

-5% 

-1% 

-39% 

-10% 

-14% 

-14% 

-7% 

Total 

10431 

-80% 

-6% 

-13% 

Source: 2012 SDG study (except option 3: Commission estimate based on SDG data) 

-34% 

+3% 

-9% 

-8% 

-4% 

-8% 

-40% 

+30% 

+22% 

-5% 

+9% 

+34% 

-14% 

-16% 

+6% 

+3% 

+8% 

+11% 

-9% 

+16% 

+27% 

-14% 

+9% 

+12% 

EN 

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EN 

 
  
 
 
 
 
 
Table 57: Policy options: combined impact on total cost of Regulation 261 for carriers – under 100% claim rate 

 (percentages 
show 
variations  compared  to 
baseline) 

Baseline 

Option 1  Option 2a 

Option 2b 

Option 3 

Option 4 

NPV 
total 
cost 2015-25 

(in 
million) 

€ 

Unchanged 
compensation 
levels 

Adjusted 
compensation 
levels 

Unchanged 
compensation 
levels 

Adjusted 
compensation 
levels 

Regional carriers 

397 

-77% 

-28% 

-50% 

Charter carriers 

1819 

-74% 

-42% 

-53% 

Low-cost carriers 

7271 

-72% 

-22% 

-40% 

Network carriers 

10076 

-64% 

-18% 

-33% 

Non-EU carriers 

4088 

-58% 

-19% 

-31% 

-38% 

-28% 

-25% 

-26% 

-26% 

-55% 

-44% 

-42% 

-40% 

-36% 

+21% 

+16% 

+9% 

+8% 

+9% 

+17% 

+7% 

+11% 

+13% 

+17% 

Total 

23653 

-66% 

-22% 

-36% 

-26% 

-40% 

+10% 

+11% 

Source: 2012 SDG study (except option 3: Commission estimate based on SDG data) 

EN 

149 

EN 

 
  
 
 
 
 
 
Table  58:  Subvariant  of  option  2a  –  time  threshold  for  delay  compensation  increased 
from 3 to 5h (0-1500km), 9h (1500-3500km) and 12 h (beyond 3500km) – impact on 
the comibned policy option 

 (compared 
to baseline) 

Baseline 

Current claim rate 

100 % claim rate 

NPV  total  cost  2015-
25 

(in € million) 

Current 
claim 
rate 

100% 
claim rate 

Unchanged 
compensatio
n levels 

Adjusted 
compensati
on levels 

Unchanged 
compensati
on levels 

Adjusted 
compensati
on levels 

215 

397 

-32% 

-39% 

-28% 

-50% 

555 

1819 

-11% 

-12% 

-56% 

-65% 

3516 

7271 

-11% 

-14% 

-31% 

-45% 

4501 

10076 

-10% 

-15% 

-31% 

-42% 

1644 

4088 

-6% 

-8% 

-33% 

-40% 

Regional 
carriers 

Charter 
carriers 

Low-cost 
carriers 

Network 
carriers 

Non-EU 
carriers 

Total 

10431 

23653 

-10% 

-14% 

-33% 

-44% 

Source: Commission estimates based on data from 2012 SDG study 

EN 

150 

   EN 

 
 
ANNEX 14: Sensitivity analysis of the calculations 

As shown in annex 8, the extent of data availability means that there is more certainty 
on some aspects of the economic cost calculation than others. However, this should be 
balanced against the impact these assumptions have on the overall result. For example, 
although  the  denied  boarding  figures  could  only  be  derived  from  a  small  sample  of 
airlines  and  therefore  this  is  quite  uncertain,  the  data  suggests  that  denied  boarding 
rarely  occurs,  and  therefore  the  impact  of  this  assumption  on  the  overall  economic 
burden is relatively low.  

In order to test the impact of the key assumptions the consultant undertook a number of 
sensitivity tests, for each of which he modified the relevant rate. The table below shows 
the  impacts  on  the  total  economic  cost,  and  evaluates  the  total  importance  of  the 
assumption by combining this with the level of uncertainty based on the extent of the 
available data. 

Table 59: Impact of assumptions on NPV of economic burden 2015-25 

Sensitivity test 

Impact of 50% increase in 
input on incremental 
economic burden 

Level of 
uncertaint
y 

Total 
importance 

50% higher denied boarding rate 

50% higher downgrading rate 

50% higher cancellation rate 

50% higher hotel costs 

50% higher refreshments costs 

50% higher compensation claim rate 
(15% instead of 10%) 

Compensation claim rate increases by 
0.75% per year instead of 0.5% 

50% more passengers select a refund 
(instead of rerouting, where eligible) 

15% of passengers delayed over 5 hours 
select a refund, instead of 10% 

+2% 

+0% 

+32% 

+9% 

+20% 

+7% 

+4% 

-9% 

+3% 

Low 

Low 

Medium 

Medium 

Low 

Low 

High 

Low 

Medium 

Medium 

Medium 

Medium 

High 

Medium 

High 

Medium 

High 

High 

Low 

High 

Medium 

Medium 

Medium 

Medium 

Low 

Medium 

Low 

50% higher wait time for rerouting 

+13% 

High 

Low 

Medium 

25% instead of 50% of passengers 
stranded overnight at origin airport 
return home 

+2% 

Low 

Medium 

Low 

Extraordinary 
circumstances exemption 

High 

Low 

+12% 

-10% 

High 

High 

High 

Although  the  cancellation  rate  has  the  most  impact  on  the  total  economic  burden,  the 
data sample is sufficiently good for its total importance to be low. Refreshments costs 
and  the  compensation  claim  rate  emerge  as  the  most  important  assumptions  overall, 
other than the assumption for the extraordinary circumstances exemption on payment of 

EN 

151 

   EN 

 
 
compensation.  Refreshments  costs  are  based  on  actual  prices  found  across  eight 
European  airports  but  may  not  accurately  represent  costs  at  all  airports.  The 
compensation  claim  rate  is  an  estimate  based  on  airline  complaint  data  and  is  quite 
uncertain (as already noted in the main report). 

The  consultant  has  then  tested  in  how  far  the  calculations  for  the  option  packages 
would be impacted by these uncertainties. These tests indicated that the results are most 
sensitive  to  the  assumptions  about  the  extent  to  which  airlines  are  exempted  from 
payment  of  compensation  (uncertainty  around  the  current  definition  of  extraordinary 
circumstances) and the claim rate for compensation. Most of the other assumptions had 
a  limited  impact  on  the  calculated  deviations  from  the  baseline  mainly  because  they 
affected the baseline and the option scenario likewise. 

Most importantly, the sensitivity tests have shown that variations in the assumptions do 
not modify the ranking of the options in terms of their quantitative impact and that the 
order  of  magnitude  of  the  options'  impacts  is  not  significantly  altered.  Therefore, 
another  choice  of  the  assumptions  would  not  have  modified  the  conclusions  of  the 
impact assessment. 

EN 

152 

   EN 

 
ANNEX 15: Underlying methodology for estimations 

This section explains the methodology the consultant adopted for the calculation of the 
more complex policy measures. 

Standard approach for flight disruption measures 

Some  of  the  policy  measures  have  some  form  of  flight  disruption  element,  and  their 
impacts are calculated in our impact assessment model by adjusting the base economic 
burden calculations to take into account the change.  

The changes associated with each measure take at least one of the following forms: 

•  changes to the point at which assistance is provided; 

•  changes to the cost of providing this assistance; 

•  changes to the proportion of circumstances which might be considered extraordinary, 

and therefore eligible for an exemption under Article 5(3); 

•  changes to claim rates, or the percentages of passengers which receive the assistance 

to which they are entitled; or 

•  changes to the scope of flights covered by a particular obligation. 

The impact assessment model builds on the current economic burden calculation. There 
is an individual input sheet for each policy option with a flight disruption element. The 
input sheet is based on the baseline (current economic burden) scenario and is altered in 
one of the ways described above to reflect the measure. 

The unit (per disrupted passenger) costs are not altered but multipliers can be applied in 
the input sheet where necessary to achieve a change in the unit cost. 

The model then calculates the economic burden of three scenarios: 

• 

• 

• 

A baseline (current economic burden); 

No-261 (costs that would remain if the Regulation were repealed); and 

The measure being evaluated. 

The incremental burden is calculated as the difference between the measure cost and the 
baseline cost, relative to the no-261 cost. 

In  the  absence  of  any  clear  evidence  of  a  trend,  and  due  to  the  impossibility  of 
separating the impacts of one-off factors such as the economic crisis, it is assumed that 
disruption rates will remain constant over time. If we were to assume a trend, we risk 
systematically over- or under-estimating the impact of policy changes. 

Wider Impacts 

The incremental burden of a measure serves as the basis for estimating its wider impacts 
such as the impact on fares, employment, the wider economy and CO2 emissions. 

These results are inherently very uncertain, as it is not clear to what extent passengers 
value  the  additional  services  the  Regulation  requires  them  to  be  provided  with,  or  are 
even aware of their entitlements. Therefore, a simple multiplier approach was used for 
these calculations and the results should be considered indicative only. 

It  was  assumed  that  an  increase  (or  reduction)  in  the  costs  of  airlines,  airports  and 
ANSPs will be passed on to passengers through higher (or lower) fares. The percentage 

EN 

153 

   EN 

 
impact  on  fares  is  calculated  by  dividing  the  change  in  economic  burden  by  the  total 
passenger revenue. This calculation is performed at an aggregated level by carrier type. 
NEB  costs  are  assumed  to  be  covered  through  government’s  general  budgets  and 
therefore do not impact fares. 

Impact on passenger numbers 

It is assumed that the price elasticity of demand for air fares is -1.10, based on IATA’s 
Economic  Briefing  2009.  This  report  estimates  a  route-level  elasticity  of  -1.4,  a 
national-level elasticity of -0.8 and a supra-national elasticity of -0.6. Therefore a value 
mid-way between the national-level elasticity and the route-level elasticity was taken. 

It is also assumed that 50% of any change in fares reflects changes in services which are 
noticed  and  valued  by  passengers,  and  therefore  the  impact  of  the  change  in  fares  on 
demand is lower than it would be if the change in fares was for some entirely external 
reason  (such  as  a  change  in  fuel  costs).  By  multiplying  the  fare  increase  by  these 
factors,  we  can  calculate  the  resulting  percentage  change  in  passenger  numbers,  and 
then the actual change in passenger numbers resulting from the change in fares.  

Employment 

It is assumed that an airport requires 0.70 employees for every 1,000 passengers. This 
factor is based on figures reported by the Air Transport Action Group (ATAG)70
 , which 
estimated that 464,000 people were employed by the European air transport industry on 
site at airports. The factor is multiplied by the change in passenger numbers to estimate 
the change in the number of airport staff as a result of the change in fares.  

The  ATAG  report  also  states  that  748,000  people  are  employed  by  airlines,  which 
equates  to  1.13  airline  and  handling  agent  employees  per  1,000  passengers.  Trends  in 
airline employment relate to changes in passenger kilometres rather than passengers, as 
long haul flights will generate much more airline employment per passenger. Operating 
a long haul route requires more staff per passenger due to the duration of each flight (for 
example, on a short haul route, the crew can work 4-6 flights per shift, whereas on long 
haul  they  would  only  be  able  to  work  one,  and  on  very  long  flights  relief  crew  are 
carried).  Based  on  ICAO  figures  for  global  passengers  and  passenger  kilometres,  we 
estimate  that  airline  employment  is  around  0.62  employees  per  million  passenger 
kilometres.  

The average distance travelled by passengers has been obtained from OAG as an input 
into  the  burden  calculation  (for  calculating  reimbursement,  for  example).  This  is 
available  at  an  aggregate  level  by  airline and  flight  type  and  can  be  multiplied  by  the 
number of passengers in each category to calculate the passenger-kilometres. 

Economic benefits 

There is extensive economic research on the economic impact of aviation, but most of 
this indicates total economic benefits per passenger, not the contribution for a marginal 
passenger that might be added or removed as a result of a marginal change to fares. This 
would probably be much lower, as these would be disproportionately low-value leisure 
passengers.  

70 

ATAG (2008) The economic and social benefits of air transport 

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The  only  study  the  consultant  has  identified  which  seeks  to  measure  marginal 
contribution is referred to in a report by Oxford Economic Forecasting71, which reports 
a  Department  for  Transport  estimate  that  each  incremental  passenger  in  the  UK 
generates £30 of additional economic benefits. This is derived by applying the ‘rule of a 
half’  to  changes  in  shadow  costs.  Adjusting  for  inflation  and  converting  into  Euros 
gives  an  additional  economic  benefit  of  €47  per  passenger.  This  figure  is  then 
multiplied by the change in the number of passengers as a result of the option. 

Impact on CO2 emissions 
The  consultant  has  used  a  report  by  Defra72,  which  provides  the  following  CO2 
emission figures: 

• 

• 

• 

Domestic flights (assumed regional) – 171.5 gCO2/pkm 

Short-haul flights (assumed intra-EU international) – 97 gCO2/pkm 

Long-haul flights (extra-EU international) – 113.2 gCO2/pkm 

The  report  also  provides  assumptions  about  the  load  factors  of  these  flights.  The 
consultant  applied  these  factors,  adjusted  to  reflect  the  load  factors  that  we  have  used 
elsewhere in the model, to each flight and carrier category. These emission rates could 
then be applied to the passenger kilometres as calculated above. 

Changes to airline costs during extraordinary events 

The  disruption  caused  by  the  volcanic  ash  cloud  in  April  2010  has  an  impact  on  the 
model. The standard assumptions used for care and assistance costs are not appropriate 
to calculate the impact of the volcanic ash crisis, because: 

• 

• 

due to the scale of the incident, passengers would have been much more likely 
to  abandon  their  journeys  altogether  or  reroute  by  surface  transport  than  in 
normal circumstances; and 

where it was not possible to do this, the length of time for which assistance had 
to be provided was much greater. 

The  consultant  has  calculated  the  impact  of  this  event  in  an  ‘extraordinary  event 
overlay’.  The  cancellations  due  to  volcanic  ash  are  deducted  from  the  standard 
calculation of economic burden, and the economic burden calculated as arising from the 
volcanic ash crisis (surface rerouting and care costs) are added to the burden in 2010.  

The  consultant  has  calculated  that,  on  average,  67%  of  European  airspace  was  closed 
between 14 April and 22 April 2010. Given a total of 831 million passengers in 2010, 
this means 1.5 million passengers were affected each day during this period. 

Eurocontrol’s Annual Report 2010 states that 101,127 flights were cancelled as a result 
of  the  volcanic  ash  cloud.  The  disruption  database  indicates  that  there  were  252,160 
cancellations in 2010, so the volcanic ash cloud accounted for 40% of all cancellations 
in 2010. 

71 

72 

EN 

economic 

contribution 

‘The 
www.oef.com/Free/pdfs/Aviation2006Final.pdf 
‘2011  Guildelines 
Company 
www.defra.gov.uk/publications/files/pb13625-emission-factor-methodology-paper-110905.pdf 

Defra/DECC’s  GHG 

industry 

aviation 

Conversion 

Factors 

the 

of 

in 

for 

to 

the 

UK’ 

Reporting’ 

155 

   EN 

 
                                                 
It  was  assumed  that  passengers  at  their  point  of  origin  would  have  abandoned  their 
journey and gone home, probably seeking to travel after the crisis was over. The airline 
would  therefore  not  have  had  an  incremental  cost  of  rerouting  or  care  for  these 
passengers (they would transport them after the crisis instead of during it). Passengers at 
their  destination,  or  at  connecting  points,  would  have  required  rerouting  or  care,  for 
which the airline would have been liable. The consultant estimates passengers at their 
connecting point would have represented 14% of passengers. Therefore, overall 57% of 
passengers would have required care and rerouting during the crisis.  

During the crisis, surface rerouting would have been much more attractive than under 
normal circumstances. It was assumed that surface rerouting would have been possible, 
on  average,  for  distances  less  than  1,000km.  Scheduled  seats  on  flights  of  less  than 
1,000km  account  for  54%  of  all  scheduled  seats  operated  in  2010.  Therefore  it  was 
assumed that 54% of all passengers would have to have been offered surface rerouting, 
while the remaining 46% could not be rerouted until the crisis was over. Those offered 
surface  rerouting  would  have  been  given  care  and  assistance  for  one  day  until  they 
could have been rerouted; those who could not be offered surface rerouting would have 
to have been provided with care until they could be rerouted by air after the crisis.  

For these passengers, the cost incurred depends on the time that they had to wait before 
being able to continue their journey. The length of the closure varied between different 
parts of the EU, but on average lasted around five days. It would have taken longer than 
this  to  clear  the  backlog  of  people,  and  using  our  standard  assumption  of  a  75%  load 
factor, the average wait time should have been 10 days ((5 + 15) ÷ 2). However, once 
the event occurs, fewer people would make bookings and some abandon their journeys 
altogether;  it  was  assumed  that  this  would  reduce  waiting  times  by  20%,  giving  an 
average waiting time of eight days. 

For journeys under 1,000km, the consultant estimates from OAG data that the average 
journey length was 487km. Based on a sample of ten rail and ferry routes, we estimate 
that  surface  rerouting  would  have  cost,  on  average,  €0. 24  per  kilometre.  Using  the 
average distance for journeys under 1,000km, the average cost per affected passenger is 
€118.81 (487 km x €0.24 per km). The total cost
 for rerouting is therefore €276 million 
(1.5  million  affected  passengers  per  day  x  5  days  of  closure  x  57%  of  passengers 
requiring care or rerouting x 54% of passengers offered surface rerouting x €118.81 per 
passenger). 

It is assumed that passengers who are not rerouted will be provided with the following 
care: 

• 

• 

• 

• 

Accommodation 

Travel to the accommodation 

Refreshments (three times a day) 

Meals (three times a day) 

Accommodation costs vary by carrier type; a weighted average was taken, based on the 
number  of  passengers  by  flight  and  carrier  type,  which  produces  an  average  cost  of 
€51.60  per  night.  Travel  cost s  are  €9.77  (as  used  elsewh ere  in  the  model).  The 
consultant assumed that refreshments and meals cost half as much outside the airport as 
they do in the airport, giving a cost of €3.00 for refreshments and €7.27 for meals. The 

EN 

156 

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total care cost per affected passenger is therefore €92.20 (€51.60 + €9.77 + €3.00 x 3 + 
€7.27 x 3).  

The total cost for the provision of care is €680 million: (1.5 million affected passengers 
per  day  x  46%  requiring  care  x  €92.90  +  1.5  million  affected  passengers  per  day  x  8 
days x €92.90) x 57% requiri ng care or rerouting. 

EN 

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ANNEX 16: Detailed table on comparison of options 

Table 60 

Effectiveness, efficiency and coherence of the policy packages 

1 

2a 

2b 

3 

4 

+ 

++ 

+(+) 

-/+ 

-/+ 

Effectiveness 
with  regard  to 
specific 
objectives (SO) 

  SO1.1 

+ 

++ 

+ 

+ 

+ 

(clarification 
and 
simplificatio
n) 

(goes  beyond 
clarification 
and 
simplification 
as  some  rights 
are weakened) 

(rights 
clarified 
simplified) 

are 
and 

(inconsistency 
between 
time 
thresholds  for 
care/assistance 
and 
compensation 
are  potentially 
confusing) 

(inconsistency 
between 
time 
thresholds  for 
care/assistance 
and 
compensation 
are  potentially 
confusing) 

(inconsistenc
y 
between 
time 
thresholds 
for 
care/assistan
ce 
and 
compensatio
n 
are 
potentially 
confusing) 

  SO1.2 

(+) 

++ 

++ 

++ 

++ 

(effective 
santioning 
policy) 

(COM  better 
informed 
to 
action 
take 
when  needed 
but 
coordination 
remains weak) 

(formal 
coordination 
will 
consistency) 

improve 

(formal 
coordination 
will  improve 
consistency) 

(formal 
coordination 
will 
consistency) 

improve 

(strong 
coordination 
but at possibly 
high cost)  

  SO1.3 

++ 

++ 

++ 

++ 

++ 

(effective 
complaint-
handling) 

(clear 
procedures, 
respective 
roles  of  NEBs 
ADR 
and 
bodies 
are 
clarified) 

(clear 
procedures, 
respective 
roles  of  NEBs 
ADR 
and 
bodies 
are 
clarified) 

(clear 
procedures, 
respective 
of 
roles 
NEBs 
and 
ADR  bodies 
are clarified) 

(clear 
procedures, 
respective 
roles  of  NEBs 
ADR 
and 
bodies 
are 
clarified) 

(clear 
procedures, 
respctive  roles 
of 
EU 
enforcement 
body 
ADR 
are 
defined) 

and 
bodies 
clearly 

  SO2.1 

+++ 

+ 

+ 

- 

- 

(limitation  in 
time  or  size 
of risks to be 
covered) 

EN 

in 

cost 

(strong 
reduction, 
especially 
situations 
where 
currently 
important  risk 
cost 
for 
explosion) 

(cost  increase 
overall, 
though 
some 
to 
limitations 
cost  increases 
in 
mass 
disruptions) 

(cost  increase 
overall, 
though 
some 
to 
limitations 
cost  increases 
in 
mass 
disruptions) 

(moderate cost 
reduction, 
limitation  on 
cost  increases 
in 
specific 
situations such 
as 
mass 
disruptions  or 
small-scale 

(moderate 
cost 
reduction, 
limitation  on 
cost 
increases 
specific 
situations 
such as mass 
disruptions 

in 

158 

   EN 

 
 
 
 
 
operations) 

small-

or 
scale 
operations) 

  SO2.2 

0/+ 

0/+ 

0/+ 

/ 

/ 

(reduce  most 
disincentivizi
ng  elements 
of 
compensatio
n) 

(if 
compenstaion 
levels 
changed,  they 
are  closer 
to 
actual  damage 
) 

(if 
compenstaion 
levels 
changed,  they 
are  closer  to 
actual  damage 
) 

(if 
compenstaio
n 
levels 
changed, 
they 
closer 
actual 
damage ) 

are 
to 

(compensation 
levels 
unchanged) 

(compensation 
levels 
unchanged) 

  SO2.3 

+ 

+ 

+ 

+ 

+ 

(burden 
sharing) 

(scope 
for 
burden sharing 
anyway 
is 
as 
limited 
costs 
are 
reduced) 

(increased 
possibility  for 
recourse 
to 
third parties) 

(increased 
possibility 
for  recourse 
to 
third 
parties) 

(increased 
possibility  for 
recourse 
to 
third parties) 

(increased 
possibility  for 
recourse 
to 
third parties) 

Efficiency 

+ 

+ 

+ 

- 

- 

(strong 
cost 
reduction  for 
and 
airlines 
authorities) 

(moderate 
cost 
reduction  for 
airlines  and 
authorities) 

(moderate 
cost 
reduction 
for  airlines 
and 
authorities) 

(costs 
increase 
for 
both  airlines 
and 
authorities) 

(costs 
increase 
for 
both  airlines 
and 
authorities) 

Coherence 

(+) 

++ 

++ 

++ 

++ 

the 

(while 
option 
ensures better 
compliance 
with 
passenger 
rights, 
rights 
weakened) 

these 
are 

existing 

(better 
enforcement 
of 
rights, 
marginal 
environmenta
l  and  social 
impact)  

(better 
enforcemen
t  of  existing 
rights, 
marginal 
environmen
and 
tal 
social 
impact) 

existing 

(better 
enforcement 
of 
rights, 
marginal 
environmenta
l  and  social 
impact) 

existing 

(better 
enforcement 
of 
rights, 
marginal 
environmenta
l  and  social 
impact) 

EN 

159 

   EN 

 
 
ANNEX 17: Comparison of passenger rights between transport modes 

Area 

Right granted 

Rail 

Air 

Maritime 

Bus and coach 

Regulation 1371/2007 

Regulations 261/2004 and 2027/97 

Regulation 1177/2010 

Regulation 181/2011 

Information 

Obligation of operator 
to provide information 
on rights under 
Regulation 

Must be provided when 
selling ticket 

Notice must be published at check-in 
desk, and provided in event of 
incident. NEBs have obligation to 
inform PRMs of their rights. 

Must be published on 
board and in ports 

Must be provided at latest 
on departure, and at 
terminals and on internet 

Mishandled 
baggage 

Delays / 
cancellations 
/ missed 
connections 

Right to compensation 
when baggage is lost or 
damaged 

Up to 1400 units of 
account (€1285) per 
piece 

Right to 
assistance/care (food 
and drink)  

For delays of over 60 
minutes, and where 
available or can 
reasonably be supplied 

Up to 1131 SDRs (€1344) per passenger 

n/a 

Up to €1200 per piece 

If denied boarding, cancellation or 
delay of more than 120 minutes 
(flights of 1500km or less), 180 
minutes (intra-EU flights of more than 
1500km and other flights between 
1500 and 3500km) or 240 minutes (all 
other flights) 

For delays of over 90 
minutes, and where 
available or can 
reasonably be supplied 

For journey of over 3 
hours, where delay is over 
90 minutes, and where 
available or can 
reasonably be supplied 

Right to 
accommodation where 
delay is overnight 

Yes, with no limitations 

Yes, with no limitations 

Limited to three nights, 
maximum of €80 per night. 
No right where 
cancellation or delay due 
to severe weather 
conditions. 

Limited to two nights, 
maximum of €80 per night. 
No right where 
cancellation or delay due 
to severe weather 
conditions or natural 
disasters. For journeys of 
over 3 hours only. 

EN 

160 

EN 

 
  
 
 
Area 

Right granted 

Rail 

Air 

Maritime 

Bus and coach 

Regulation 1371/2007 

Regulations 261/2004 and 2027/97 

Regulation 1177/2010 

Regulation 181/2011 

Right to 
abandon/return + 
refund 

If delay at final 
destination of more than 
60 minutes 

If denied boarding, cancellation or 
delay of more than 5 hours 

If cancellation or delay at 
departure of more than 90 
minutes 

If cancellation or delay at 
departure of more than 
120 minutes 

Right to alternative  

Choice between 
reimbursement, 
rebooking and re-routing 
under comparable 
transport conditions 

Choice between reimbursement, 
rebooking and re-routing under 
comparable transport conditions 

Choice between 
reimbursement and re-
routing under comparable 
conditions 

Choice between 
reimbursement and re-
routing under comparable 
conditions 

Right to compensation   Where reimbursement 
not accepted, right to 
compensation varying 
between 25% of ticket 
price for short delays (1-
2 hours) and 50% if 
longer 

For cancellation causing delay over 2 
hours, and delays over 3 hours, 
between €250 and €600 (depending on 
length of journey), but not paid if 
extraordinary circumstances can be 
proved  

Enforcement 
bodies 

Independence 

Not required 

Independent from 
operators in 
organisation, funding 
decisions, legal 
structure, decision-

In event of delayed arrival 
at destination. Varies 
between 25% of ticket 
price for short delays 
(delay is approximately 
25% of planned journey 
time) and 50% (for delay 
of 50%). Does not apply in 
the case of extraordinary 
circumstances or severe 
weather conditions. 

Independent of 
commercial interests in 
terms of organisation, 
funding decisions, legal 
structure and decision-

Compensation of 50% of 
ticket price if choice 
between continuation / 
re-routing and 
reimbursement not 
offered 

Independent from 
operators in organisation, 
funding decisions, legal 
structure, decision-making 

EN 

161 

EN 

 
  
 
 
 
Area 

Right granted 

Rail 

Air 

Maritime 

Bus and coach 

Regulation 1371/2007 

Regulations 261/2004 and 2027/97 

Regulation 1177/2010 

Regulation 181/2011 

Where complaints 
should be made 

making 

To any NEB, no 
obligation to transfer 
complaint but general 
obligation for NEBs to 
co-operate 

No NEB for luggage 
issues 

making 

For liability: no right to complain. 

For delays, cancellations: To any NEB, 
no obligation to transfer complaint 

To any NEB, no obligation 
to transfer complaint but 
general obligation for NEBs 
to co-operate 

To any NEB, no obligation 
to transfer complaint, but 
general obligation for NEBs 
to co-operate 

EN 

162 

EN 

 
  
 
 
 
ANNEX 18: glossary of terms and accronyms 

ADR:  alternative dispute resolution 

ANSP: air navigation service provider 

CEA:  Comité Européen des Assurances - the European insurance and reinsurance federation 

Claim  rate:  where  this  term  is  used  in  this  impact  assessment,  it  refers  to  the  proportion  of 
passengers  that  are  entitled  to  a  compensation for  cancellation  or  long  delay  that  do  indeed 
claim this compensation 

COM:  European Commission 

ECJ:  European Court of Justice 

EP: 

IA: 

European Parliament 

Impact Assessment 

IAB: Impact Assessment Board 

IATA: International Air Transport Association 

Montreal  Convention:  Convention  for  the  Unification  of  Certain  Rules  Relating  to 
International Carriage by Air, agreed in Montreal on 28 May 1999 (OJ L194 of 18.07.2001) - 
sets  global  rules  on  liability  of  air  carriers  in  cases  of  accidents  and  of  damage  to 
cargo/baggage 

NEB:  National Enforcement Body in charge of the enforcement of Regulation 261/2004  

NPV:  Net Present Value 

ODR:  Online dispute resolution (refers to the Commission proposal COM(2011) 794) 

PRM:  passenger with reduced mobility 

SDG:  Steer Davies Gleave (consultant) 

SME:  Small and medium sized enterprises 

TFEU: Treaty on the Functioning of the European Union 

EN 

163 

   EN