Carriers To Raise Fares On EU Approval Of Passenger Compensation

European carriers have threatened to raise fares after the European Parliament voted through a dramatically increased compensation schedule for airline passengers. Travelers bumped involuntarily from a flight, either through overbooking or cancellation, now will receive $200 on flights under 1,000 km, $400 on flights between 1,000 and 3,500 km and $600 on flights over 3,500 km. The previous sums were $150 for short-haul flights and $300 for long haul.

Airlines also will be forced to provide meals and drinks for delays above two hours and arrange hotel accommodation if cancellation leads to an overnight stay.

The decision still needs to be approved by individual governments, which may make some variations. Airlines, especially low-cost carriers, have campaigned vigorously against the proposals. They have achieved some concessions. Originally, the European Commission, which drew up the plan, proposed compensation of up to $1,500. Members of the European Parliament also added amendments that absolve airlines from compensation for cancellation caused by external factors, such as weather, air traffic control failures and security alerts. They also demanded that the Commission draw up similar plans for delays to international rail journeys.

Nevertheless, the low-cost airlines criticized the vote (carried by an overwhelming majority), saying it would severely affect the economics on which they operate. In particular, EasyJet said, compensation levels must be related to the price of the ticket. Low-cost carriers overbook far less than ordinary scheduled carriers but a small number of them are alleged to cancel flights for commercial reasons. Budget airlines also usually make no subsistence provision in the event of delay or cancellation.

Mainstream carriers expressed objections too. British Airways said the legislation "will increase costs and therefore prices."

BTI UK managing director Mike Platt said the vote brought mixed news for business travelers. He believes airlines will reduce the number of seats by which they overbook flights and will tighten up the flexibility of tickets. "Non-penalties for no-shows have been served notice," Platt said. "What I welcome more is the action on flight cancellations. If an airline publishes a schedule, it should stick to it because travelers rely on those times for their business needs. Canceling flights for commercial reasons has become more prevalent recently in Europe."