Aviation: Ryanair faces action over delay compensation

The UK Civil Aviation Authority (CAA) is threatening Ryanair with legal action over its refusal to pay compensation to some customers who were booked on delayed or cancelled flights during summer.

The airline's passengers have been claiming in record numbers this year following industrial action by pilots and cabin crew that caused many flights to be delayed or cancelled. When the airline denied compensation those customers referred their cases to Alternative Disputes Resolution (ADR), an independent resolution scheme. In the first nine months of this year, 6,653 Ryanair customers lodged a complaint with ADR.

Extraordinary circumstances

At the crux of the matter are two words - extraordinary circumstances - which typically mean factors outside of an airline's control. Ryanair claims that industrial action by its own staff amounts to "extraordinary circumstances" and argues that it does not have to compensate passengers who have their travel disrupted. The CAA on the other hand issued different advice to travellers in July: "...it is the view of the UK Civil Aviation Authority, taking into account previous court rulings, that when a flight cancellation is caused by strike action by the airline's employees, the airline is required to pay compensation... if it has not warned passengers of the cancellation at least two weeks prior to the scheduled departure time." The CAA's website goes on to suggest that strike action is only an extraordinary circumstance when it involves staff not directly employed by an airline (e.g. air traffic controllers or airport ground crew).

Ryanair has countered the CAA's position, saying: "Courts in Germany, Spain and Italy have already ruled that strikes are an 'extraordinary circumstance' and compensation does not apply. We expect the UK CAA and the Courts will follow this precedent."

Clearly the two sides disagree, and it seems likely the matter will now be heard in the UK courts too.

What's at stake?

European flight compensation rules - known as EU261 - are fairly complex but essentially when a flight is delayed by more than three hours or is cancelled they place obligations on an airline. The carrier is required either provide a refund, or book disrupted passengers on the next available flight - and to pay for appropriate meals, hotels and some phone calls. Travellers can also claim monetary compensation which varies from EUR230 for delays of three hours or more on journeys of less than 1,500km, to as much as EUR600 for long-haul trips delayed by more than four hours.

Ryanair has a history of being reluctant to pay delay compensation. Michael O'Leary, the airline's flamboyant CEO, has said he believes EU261 is a "ridiculous" piece of legislation. He even told one passenger "you’re not getting a refund so f*** off" - and yes, he did use the f-word in full. Consumer group Which? has accused the airline of falling "woefully short" of fulfilling its obligations, while at one time the CAA said Ryanair was "persistently misleading" passengers over their rights.

O'Leary's view is founded on the basis that many passengers have paid an airfare far less than the compensation they become eligible to if a flight is delayed or cancelled. Essentially he argues that if a customer has paid only [say] £20 for a flight, they should not be entitled to £200 or more if things go wrong.

The right thing to do

The Aviation Oracle has no sympathy for the approach Ryanair has taken by refusing claims. There's potentially some validity in O'Leary's point of view but two important issues can't be escaped:

When a passenger is delayed they are likely face expenses they had not budgeted for in their travel plans - additional food, hotel accommodation, alternative tickets. Some passengers might miss work and lose pay. Why should a customer be worse off if an airline fails to deliver the travel it promises?
An airline is flouting the law if it denies customers compensation which they are legally due. It is inappropriate - unethical even - to heap more difficulties onto passengers, when in reality the carrier's position is that it is the law that is at fault. The appropriate way to deal with the argument is for the firm to challenge the law - either unilaterally or along with others of a similar mind.

Things will undoubtedly come to a head when the arguments are taken to court. Will Ryanair want to risk losing? That could set a precedent for the future so although unlikely, maybe it will settle outstanding claims to avoid a potential ongoing issue. Or perhaps it is buoyed by favourable rulings in mainland Europe and hopes UK action goes the same way. Disruption in the airline industry is inevitable from time to time, but The Aviation Oracle believes that passengers should not be left out of pocket when an airline fails to get them where they paid to travel, at the time they booked to travel. If airlines have to increase compensation budgets, so be it - unless the law is changed.