Flight cancellation for commercial reasons
Thread Starter
Flight cancellation for commercial reasons
What's the UK CAA's policy on cancelling non-stop flights from a UK airport to another airport within the EU by EU based airlines at short notice (less than 48 hours) for what appear to be commercial reasons (i.e. not enough fare paying passengers) ?
Join Date: Feb 2012
Location: Cape Town / UK / Europe
Posts: 728
Likes: 0
Received 0 Likes
on
0 Posts
ah ......... one of the problems is that the EU, with its typical foresight and genius, does not adequately define 'cancellation'.
Have a look at this and the following postings :
http://www.pprune.org/passengers-slf...ml#post7453676
By the way did you get my PM?
Have a look at this and the following postings :
http://www.pprune.org/passengers-slf...ml#post7453676
By the way did you get my PM?
Thread Starter
Cancellation should not be difficult to define in this instance - I'm talking of cases when flight does not depart and next flight is more than 24 hours later.
Btw - got pm and very grateful for the insight.
Btw - got pm and very grateful for the insight.
A Runyonesque Character
Join Date: Apr 2004
Location: The South of France ... Not
Age: 74
Posts: 1,209
Likes: 0
Received 1 Like
on
1 Post
Any airline which cancels for commercial reasons (i.e. not enough fare paying passengers) must know that they are in breach of R261 and hence liable for compensation at the appropriate level, in this case 250 Euros.
Therefore one should assume that they have factored it into the cancellation decision - are the costs saved greater than the compensation due? Or can the compensation be mitigated by general foot-dragging and reluctance to pay? Or can it be avoided altogether by pleading exceptional circumstances? But if the enforcement body (CAA) is satisfied that the cancellation was commercial, any further resistance by the airline will lead to yet another court case.
Therefore one should assume that they have factored it into the cancellation decision - are the costs saved greater than the compensation due? Or can the compensation be mitigated by general foot-dragging and reluctance to pay? Or can it be avoided altogether by pleading exceptional circumstances? But if the enforcement body (CAA) is satisfied that the cancellation was commercial, any further resistance by the airline will lead to yet another court case.
Thread Starter
SSK - thank you for your comments. Are you in effect saying that if loads are exceptionally low such that paying refund + 250 euros to each affected passenger is more cost effective than paying for the fuel, then an airline can continue doing so as often as it likes, without really incurring the wrath of the CAA ?
Join Date: May 2007
Location: Europe
Posts: 1,416
Likes: 0
Received 0 Likes
on
0 Posts
If the service is cancelled, then the aircraft programmed for it will either be used on a much more profitable service (perhaps replacing a u/s aircraft), or will not fly at all.
The costs avoided by not operating the service are far more than the sector fuel cost; all the direct operating costs are avoided, and some of the indirect costs may be avoided or reduced.
You would have to be paying off more than a few disgruntled passengers at 250 Euros a head to make that the worse option.
Considerations of reputation and crew/aircraft positioning may also be a factor in an airline's decision to cancel or not.
The CAA's SRG would say (as a conditioned reflex but in this case rightly) "none of our business, old chap, have another cup of tea".
The ERG - sorry, Regulatory Policy Group -would only intervene in the event of frequent cancellations over a protracted period, if at all. Indeed, I rather suspect that this behaviour is not in their remit in the first place, in this derugulated age. Market forces rule! Passengers can always vote with their feet.
(If the cancellations were associated with lack of sufficient working capital, that would be another matter, as it has a bearing on safety.)
But even if they were to intervene, it would only be a light tap on the knuckles. "If an airline chooses to operate this way," they would argue, "who are we to interfere?" Like all civil servants*, masterly inaction is their default plan.
* I know, I know, but if it quacks like a duck, walks like a duck, thinks like a duck, behaves like a duck........
The costs avoided by not operating the service are far more than the sector fuel cost; all the direct operating costs are avoided, and some of the indirect costs may be avoided or reduced.
You would have to be paying off more than a few disgruntled passengers at 250 Euros a head to make that the worse option.
Considerations of reputation and crew/aircraft positioning may also be a factor in an airline's decision to cancel or not.
The CAA's SRG would say (as a conditioned reflex but in this case rightly) "none of our business, old chap, have another cup of tea".
The ERG - sorry, Regulatory Policy Group -would only intervene in the event of frequent cancellations over a protracted period, if at all. Indeed, I rather suspect that this behaviour is not in their remit in the first place, in this derugulated age. Market forces rule! Passengers can always vote with their feet.
(If the cancellations were associated with lack of sufficient working capital, that would be another matter, as it has a bearing on safety.)
But even if they were to intervene, it would only be a light tap on the knuckles. "If an airline chooses to operate this way," they would argue, "who are we to interfere?" Like all civil servants*, masterly inaction is their default plan.
* I know, I know, but if it quacks like a duck, walks like a duck, thinks like a duck, behaves like a duck........
Last edited by Capot; 16th Oct 2012 at 15:05.
A Runyonesque Character
Join Date: Apr 2004
Location: The South of France ... Not
Age: 74
Posts: 1,209
Likes: 0
Received 1 Like
on
1 Post
Are you in effect saying that if loads are exceptionally low such that paying refund + 250 euros to each affected passenger is more cost effective than paying for the fuel, then an airline can continue doing so as often as it likes, without really incurring the wrath of the CAA ?
In the same way that overbooking profiles are determined by algorithms which take account of many factors. DBC, presumably, is one of those factors. In other words, the overbooking limit on a given flight may have been eight seats, factor in R261 and it goes down to five. The regulators don’t like overbooking (or specifically denied boarding caused by overbooking) but they will not take action against an airline that regularly bumps passengers and then fully complies with the legal requirement to compensate them.
In fact, if you stop and think about it, the regulator is very unlikely to know if cancellations/bumpings are routine occurrences, as long as they are not alerted by complaints. The EU has often toyed with the idea of collecting data on delays, denied boarding and complaints (as per the US DoT) but has never implemented. I am almost certain thet there are no similar reporting requirements at the national level in Europe.
Does combining flights count two or three hours apart count as a cancellation? (Happened to me.) BA quite often cancel select flights & rebook pax on flights either side.
What if a plane is switched to cover a u/s a/c on a flight that is fuller (or has more high yield pax)?
I've checked in and had the flight cancelled which I suspect was due to crewing issues caused by bad weather. I was rebooked on another airline four hours later - the airline did all it could, no complaints. However, the airline wouldn't compensate me because the delay was weather related.
In the US you get compensation, an hotel & generally an upgrade if bumped but nothing if cancelled for technical (or other) reasons. Could it in certain circumstances be the cheapest option to cancel a heavily oversold flight?
Presumably there is nothing to stop an airline selling stand by seats at a suitable discount if a flight is full but it expects some no shows?
What if a plane is switched to cover a u/s a/c on a flight that is fuller (or has more high yield pax)?
I've checked in and had the flight cancelled which I suspect was due to crewing issues caused by bad weather. I was rebooked on another airline four hours later - the airline did all it could, no complaints. However, the airline wouldn't compensate me because the delay was weather related.
In the US you get compensation, an hotel & generally an upgrade if bumped but nothing if cancelled for technical (or other) reasons. Could it in certain circumstances be the cheapest option to cancel a heavily oversold flight?
Presumably there is nothing to stop an airline selling stand by seats at a suitable discount if a flight is full but it expects some no shows?
A Runyonesque Character
Join Date: Apr 2004
Location: The South of France ... Not
Age: 74
Posts: 1,209
Likes: 0
Received 1 Like
on
1 Post
You have to distinguish between compensation and care. As originally envisaged, the cash compensation provisions of R261 were meant to be punitive, for some perceived malpractice (ie bumping due overbooking or cancellation due underbooking). Care, in the form of refreshments, meals and eventually hotel, is due in all cases of disruption, whether avoidable or not.
R261 was drafted without regard to the realities of how airlines operate, and has thrown up many absurdities. For example, if an aircraft goes unserviceable overnight, it is OK to cancel the flights which that aircraft was scheduled to operate, even if they are full, but if you switch an aircraft from a poorly-booked service to operate the full one, and therefore minimise the disruption, that becomes a commercial decision and the (smaller number of) affected passengers are entitled to compensation. So the rational choice for the airline is to leave 150 stranded in order to carry 50.
Similarly, combining services 'get the passengers away' runs the risk of invoking the compensation rules in circumstances where a simple cancellation would not.
R261 was drafted without regard to the realities of how airlines operate, and has thrown up many absurdities. For example, if an aircraft goes unserviceable overnight, it is OK to cancel the flights which that aircraft was scheduled to operate, even if they are full, but if you switch an aircraft from a poorly-booked service to operate the full one, and therefore minimise the disruption, that becomes a commercial decision and the (smaller number of) affected passengers are entitled to compensation. So the rational choice for the airline is to leave 150 stranded in order to carry 50.
Similarly, combining services 'get the passengers away' runs the risk of invoking the compensation rules in circumstances where a simple cancellation would not.
Join Date: May 2009
Location: Confoederatio Helvetica
Age: 69
Posts: 2,847
Likes: 0
Received 0 Likes
on
0 Posts
On long haul it is often a lot less expensive to bump passengers (€650) than to downgrade them (75% of the fare).
If you were on an urgent business trip, what would you choose? Oh, sorry it's not your choice.
If you were on an urgent business trip, what would you choose? Oh, sorry it's not your choice.
