The set of regulations recently approved by the U.S. Department of Transportation (DOT) affirming airline passengers’ rights to a refund in case of canceled or significantly delayed flights has received significant coverage in the media and – in some instances – has been compared to legislation that has been in force for almost two decades in the European Union.
However, the E.U. Regulation 261/2004 is a comprehensive set of rules applicable to all itineraries departing from the European Union that goes far beyond the scope covered by the recent DOT ruling and provides significantly more protections to passengers.
We’ll compare the two sets of rules and how they would affect the experience of a passenger in a few different simplified scenarios.
Canceled Flight
Scenario #1: A passenger has booked a short-haul flight and, upon arriving at the airport, they find out the flight has been canceled. The airline has no availability to re-accommodate the passenger on the same day and offers an alternative itinerary on the following day.
Foreword: The categorization of flights is significantly different between the news DOT rules and the E.U. Regulation 261/2004 (E.U. 261).
The DOT only differentiates between domestic and international flights, regardless of the flight time and the distance covered; in the U.S., a domestic flight could be as long as 11 hours (in case of Boston to Honolulu, for example), while some international flights could be well under an hour (e.g. Boston-Montreal or Seattle-Vancouver). On the other hand, E.U. 261 divides flights in three categories based on the distance covered: less than 1,500 km (approximately 800 nautical miles), between 1,500 and 3,500 km (approx. 1900 nautical miles) or any intra E.U. flights (some of the flights between mainland France and the overseas territories can be up to 6,000 nautical miles), and all other flights.
For this exercise, we would consider a comparison between a U.S. domestic flight and a flight within the E.U. shorter than 1,500 km.
DOT Scenario: The airline would inform the passenger of the cancelation and provide an alternative itinerary on the following day. The passenger would have the option to accept the itinerary proposed or to request a refund of the ticket (or portion thereof) in case they decide the alternative offered does not serve the original purpose of the trip and they no longer wish to travel or prefer to make alternative arrangements.
In case the passenger decides to travel on the following day, the DOT does not hold the airline responsible for any additional expenses incurred by the passenger, although most likely some food voucher would be offered.
If the passenger decides to request a refund, this would have to be processed automatically within seven business days (or within 20 business days in case the ticket was purchased through an intermediary) in cash or as a refund through the original form of payment. Most likely, airlines would try to entice passengers to accept an airline voucher instead, at a significant premium, but the passenger has the right to receive cash if this is their wish.
E.U. 261 Scenario: The airline offering an alternative itinerary on the following day would be in violation of the Regulation which establishes that the customer should be rerouted to the final destination “at the earliest opportunity,” even if this means purchasing a seat on a competitor’s flight.
If the itinerary on the following day is the earliest opportunity, or the passenger chooses not to request alternative solutions, the carrier would have to provide meals and refreshments appropriate to the waiting time, hotel accommodation when necessary as well as transportation between the airport and the hotel. Furthermore, the passenger should be offered the possibility of making two phone calls free of charge or to send two fax, telex, or email messages should they wish to do so.
In addition to all this, which is due regardless of the reason causing the cancelation of the flight, the passenger is also owed a lump-sum cash compensation of 250 Euros (approx. $270), to be paid out in cash within seven days. The airline can avoid paying the compensation if it can prove that the cancelation was caused “by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken.” The airline would have been able to reduce the compensation to 125 Euros if the alternative flight provided had arrived at the destination within two hours of the original flight.
Once again, airlines would probably offer the possibility to receive the compensation in the form of an airline voucher, for a considerable premium that could be as high as 50% or more.
Delayed Flight
Scenario #2: A weather system is causing congestion and delays in the New York City area. At JFK airport there are two flights scheduled to depart to Paris-CDG, one is operated by Air France (AF) and the other is operated by American Airlines (AA). Both flights are delayed by seven hours.
DOT Scenario: AA has to comply with the DOT and therefore must present an alternative to the customer. If the alternative presented is not considered suitable, the customer can decide to request a refund of the fare paid and cancel the trip, or make alternative arrangements independently.
E.U. 261 Scenario: AF is a European carrier since its Air Operator’s Certificate is issued by the authorities of a Member State of the European Union (France), therefore it has to comply with E.U. 261 for all the itineraries it operates to and from a European destination, while non-E.U. carriers need to comply with E.U. 261 only on itineraries departing from an airport located within the E.U.
Therefore, the passenger of the delayed flight needs to be presented with an alternative option departing “at the earliest opportunity,” even if this means booking a seat on a competitor’s flight. This last option is usually accepted by airlines after considerable resistance, and sometimes it is not offered at all even if required by law. In this case, the passenger has the option to make alternative arrangements and then claim the costs incurred from the airline, usually with very good chances of success.
AF would also be responsible for providing meals, accommodation, and transportation as needed should the delay require an overnight stay at a hotel. Once again, sometimes airlines allow passengers to make their own arrangements and claim “reasonable” costs from the airline.
Since the delay is caused by bad weather, it will likely be attributed to “extraordinary circumstances” (although there is case law showing how this motivation was not accepted in cases when the weather was not truly “exceptional”), therefore AF would not be responsible for paying any lump-sum compensation to the passenger. On the other hand, had the delay been due to “non-exceptional circumstances,” the airline would have been liable to pay a sum of 600 Euros (approx. $640), which would have been reduced by 50% if the alternative flight offered had allowed the passenger to arrive within four hours of the itinerary originally booked.
Schedule Change
Scenario #3: A passenger has booked a medium-haul flight (domestic or intra-European). Approximately 30 days before departure the airline contacts the customer informing that their itinerary has been changed, and a flight that was departing early in the morning is now leaving in the middle of the afternoon.
DOT Scenario: The airline promptly contacts the customer informing them of an itinerary change, and establishes a deadline for the customer to make a decision on the alternative arrangements provided. The airline would also need to inform the customer of the course of action in case the customer does not decide within the established deadline.
The customer can choose to accept the alternative arrangement, to ask for a different one (at the airline’s discretion), or to opt for a refund of the flight.
E.U. 261 Scenario: Since the airline is informing the customer of a schedule change more than 14 days in advance, no lump-sum compensation is owed to the passenger. However, the delay imposed by the itinerary is above the three-hour threshold (set for all intra-E.U. flights above 1,500 km) that triggers the right to care (meals, accommodation, transportation as appropriate) and the right to re-routing.
The airline needs to reprotect the passenger “at the earliest opportunity” with a comparable means of transport to the final destination. The customer can also choose to postpone the trip to a later date, subject to the availability of seats. The airline would insist on reprotecting the passenger on its own flights, or on flights of partner airlines, but the passenger can insist on being reprotected on a competitor should the airline’s offer be incompatible with their needs.
In addition to that, the passenger has the option to request a full refund for the ticket purchased.
Different Worlds
As these examples have shown, the new DOT rules provide some basic rights to passengers who are inconvenienced by a flight cancellation or significant delay, but they fall very short of the protections granted by the E.U. Regulation 261/2004 which offers a more comprehensive range of options to affected consumers.
The DOT rules offer no compensation for any cancelation or delay, but establish a clear threshold to determine which flights are covered by these provisions and, most importantly, establish that a canceled or significantly delayed flight constitutes a breach of the transportation contract on behalf of the airline that entitles the customer to a resolution of the agreement itself with the consequent right to a full refund. However, the customer remains responsible for adjusting their travel arrangements and for possible extra expenditure caused by the changes imposed by the carrier.
