Outlook Coming soon to a court room near you: the airline industry versus the European governments who put them out of business for the best part of a week during Iceland's volcanic eruption.
One expected Michael O'Leary's Ryanair to be consulting its learned friends – he confirmed yesterday that the airline plans to sue several governments over its €50m loss from the volcano – but there are plenty of less hot-headed airline bosses thinking seriously about doing the same if they aren't offered meaningful compensation.
It's not just the loss of revenue the airlines incurred when their planes were grounded – though that was bad enough, given the effects of the recession on the sector – but also their responsibility for covering the costs of passengers hit by the crisis. The airline industry has felt for some time that European regulations making them liable for the costs of passengers – whether or not they are at fault – are disproportionate. This episode could not have illustrated the point more clearly, with the likes of Ryanair legally compelled to pick up the bill for passengers stranded for days at a time by an event totally beyond their control.
Leaving aside the rights and wrongs of the handling of the ash crisis – aviation regulators had no choice but to be hyper-cautious – one can see why the airlines are so fed up. It is difficult to think of any other industry that has to operate as an insurer of last resort for its customers in this way.
Having framed the legislation in this fashion, however, it seems Europe's governments do not share the airlines' view. And, with taxpayers' cash in such short supply, the compensation package the industry wants is unlikely to be forthcoming on a voluntary basis. Europe's courts can expect to be very busy.Reuse content