Reuters -"Airlines win first round in EU compensation fight"

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Reuters are reporting the following story:


"12:53 15Jul2004 RTRS-Airlines win first round in EU compensation fight

GENEVA, July 15 (Reuters) - International airlines challenging an EU regulation on compensation to passengers for delays and cancellations have won the first round in a legal battle to have it overturned, they said on Thursday.
The International Air Transport Association (IATA) said the British High Court, where it filed a suit in April, had agreed to refer the case to the European Court of Justice.
For the EU's highest tribunal to hear cases, they must be forwarded to it by a national court from a member state.
"A court of law has confirmed our view that the regulation was not reasonable and we are confident that the European Court of Justice will revert quickly with a similar view," IATA said in a statement.
The European Union legislation, due to take effect in February 2005, would oblige air carriers to pay compensation if flights are delayed for a long time or cancelled, or if there is an air traffic control strike.
But IATA argues that by making airlines compensate for situations beyond their control, such as bad weather or air traffic control delays, the regulation would be inconsistent with the Montreal Convention limiting a carrier's liability in extraordinary circumstances.
"Airlines accept the need to compensate in areas within our control; however, this regulation seeks to make airlines responsible for delays beyond their control," said the Geneva-based IATA, which has some 270 member airlines..
The regulation would also jeopardise the future of short-haul connector services to long haul flights, it warned.
"If a passenger on a long haul flight misses a connection to a regional flight due to weather conditions, a strike or new security procedures, it is the short-haul operator that must compensate for the value of the entire journey," it said."

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Reuters reporting this additional story:


“11:32 15Jul2004 DJN-DJ UK Court Orders Review Of EU Airline Compensation Rules<RYA.I><RYAAY.O>

UK Court Orders Review Of EU Airline Compensation Rules
BRUSSELS (Dow Jones)--A U.K. court has cast doubt on the legality of European Union regulations that would force airlines to pay out hundreds of euros in compensation to air travelers and has requested their urgent review by Europe's highest court.
The U.K.'s High Court took the decision after hearing arguments put forward by the International Air Transport Association at a closed hearing in London Wednesday.
The decision is important because the European Court of Justice in Luxembourg has the power overturn the legislation, which is due to come into effect in early 2005.
IATA, which represents 280 airlines, including full-service airlines and low-cost carriers, say that making airlines liable for delays and cancellations due to circumstances beyond their control - such as snowstorms and strikes - is "flawed".
The airlines aren't challenging another aspect of the regulations that would give payouts to passengers refused a seat on a flight due to overbooking - in other words when airlines cancel flights for purely commercial reasons.
"The regulation was a product of regulators without vision and who do not understand the industry. It was irresponsible from day one," said Giovanni Bisignani, Director General and CEO of the IATA, in reaction to the U.K. court decision.
IATA's position has industry wide support. It is backed by the European Regions Airline Association, whose members include regional carriers like Aegean Airlines, the International Air Carriers Association, IACA, representing charter airlines, such as First Choice Airways, and the European Low Fares Association, which includes airlines such as Ryanair Holding PLC (RYAAY).
The E.U. law will force all airlines flying to and from E.U. airports to pay EUR600 ($754) to passengers bumped off long-haul flights, EUR400 ($502) for medium-length trips and EUR250 ($314) for short hops. The current maximum is EUR300 ($377).
Delays of at least two hours - for whatever reason - would also trigger automatic compensation, such as free meals and phone calls. If a flight is at least five hours late, a passenger must be offered either a refund of the full ticket price if the flight no longer serves any purpose - such as getting somewhere in time for a meeting - or rebooking onto the earliest flight home. Airlines will automatically have to offer a free hotel room for passengers delayed overnight.
Budget airlines fear the payouts could push them into raising prices which, in many cases, are lower than the compensation.
"It is punitive on airlines and will ultimately deny consumers the choice of having low fares," said Wolfgang Kurth, CEO of German low-cost carrier Hapag-Lloyd Express.
A spokesman for the E.U. Commission said the executive body was monitoring the case closely but would reserve any comment until after the European Court Of Justice had delivered a decision.
The original proposal, drawn up by the Commission, excluded airlines from making payments for delays and cancellations due to circumstances beyond their control. However, the clause was struck out during the legislation's passage through the European Parliament and the E.U. Council, where E.U. governments are represented.
CORRECT: IATA Challenge Supported By IACA
IATA's position has industry wide support. It is backed by the European Regions Airline Association, whose members include regional carriers like Aegean Airlines, the International Air Carriers Association, IACA, representing charter airlines, such as First Choice Airways, and the European Low Fares Association, which includes airlines such as Ryanair Holding PLC (RYAAY).
(In an item that ran around 1032 GMT, the name of one of the organizations was misstated as the International Air Transport Association.)
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