New compensation rules are unfair, say budget airlines

New compensation rules are unfair, say budget airlines

Budget airlines have criticised new EU regulations that compel carriers to offer passengers compensation if their flights are overbooked, cancelled or delayed.

The rules, which came into force yesterday, apply to all scheduled and charter flights. They set compensation for overbooking at between €250 (£173) and €600 (£414), depending on the length of the flight.

Companies will now also have to provide free meals, refreshments, free phone calls and hotel accommodation if the delay continues overnight.

Airlines failing to comply will face fines of up to £5,000 a passenger, with the Civil Aviation Authority responsible for sorting out any complaints affecting UK carriers.

Low-cost operators have agreed to abide by the regulations, but say they are being unfairly targeted. Europe's biggest budget airlines, easyJet and Ryanair, say they never overbook, and that the new rules could mean they are forced to pay up to six times the value of a discount airfare.

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EasyJet said compensation should be proportionate to the fare paid.

Its chief executive, Ray Webster, said: "What started as a good piece of legislation to prevent traditional airlines bumping off passengers through overbooking has become a bad piece of legislation and will cause unnecessary confusion and conflict between airlines and their customers."

Jan Skeels, the secretary-general of the European Low-Fares Airlines Association (ELAA), which is mounting a legal challenge to the regulations, said airlines would be forced into a fundamental rethink of their operations.

"Passengers will realise after a while that a route they fly on quite often is no longer viable," he said.

The ELAA and the International Air Transport Association have challenged the new regulations and expect a ruling from the European court of justice in September or October.

British Airways has also questioned the need for the regulations. A spokeswoman said last night: "We already offer generous compensation and provide care and assistance for passengers so the level of compensation seems to have risen disproportionately."

But she said that BA would not put up its prices and had no plans for legal action.

James Fremantle, an adviser at the Air Transport Users Council, dismissed suggestions that the rules would lead airlines to raise their fares.

"Airlines have said that this will push up prices but we don't believe this," he said. "There is too much competition out there.

"We are not concerned that passengers will lose out. They will only benefit by getting compensation and benefits when they are inconvenienced."

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