Pay delayed air travellers compensation, say MEPs

The European Parliament yesterday demanded compulsory compensation of up to £380 for delayed or stranded air passengers, in the face of opposition from budget airlines which said the move would spell the end of bargain-basement fares.

The vote, which could have significant repercussions for the air industry, is designed to discourage carriers from cancelling flights because they are less than half full. It follows a barrage of complaints from customers left high and dry by the new low-cost carriers.

MEPs want to place a new requirement on airlines to provide significant sums of cash, as well as catering and accommodation, passengers who are bumped off flights or have them cancelled altogether.

Before becoming law the measure will to go through several more stages and needs to be approved by EU ministers. The European Commission is still pressing for higher penalties of up to £1,500 but governments may be sympathetic to claims that the proposed law will effectively price low-cost carriers out of the market.

Yesterday's vote in Strasbourg called for compulsory compensation of up to £250 for over-booking or cancellation on short-haul flights – double the current rate – and £380 for disrupted flights longer than 3,500 kilometres (2,175 miles). Currently passengers just get compensation for being denied boarding due to over-booking, worth £90 for short-haul and £180 long-haul flights, and nothing for cancellation.

In addition passengers on delayed flights would gain a legal right to refreshments, meals or hotel accommodation, and there will be performance scoreboards on lost luggage, delays and over-booking to name and shame the worst offenders.

Low-cost operators such Buzz, Ryanair and easyJet, Virgin Express and Go say it would be fairer to link compensation to the original cost of the air ticket. The carriers argue they would be particularly badly hit because many of their flights are available for less than £30, making the proposed compensation disproportionate.

David Nichols, a director of Easyjet, told the BBC that some airlines could go bust if the European Parliament's proposals were enacted. "In a couple of areas this will certainly cost more and airlines will either have to accept less profit or put up ticket prices. Some airlines could go to the wall over this," he said.

The decision split MEPs. While many were concerned about the commercial implications for low-cost carriers, they were also sensitive to the complaints from constituents who have been left without assistance when their flights have been cancelled.

Herman Vermeer, spokesman for the Liberal Group in the Parliament, argued: "Many cancellations and delays are caused by external factors such as air traffic control. Introducing new compensation rules which fail to take account of this fact will not work. What's worse, they threaten to stifle the competition which the new budget airlines have injected into the market and could mean an end to cheap deals for consumers."

But Mark Watts MEP, Labour's transport spokesman said: "This represents a significant advance in passengers' rights. The days of waiting helplessly while airlines cancelled, delayed and over-booked your flights will soon be over. After years of letting airlines make the rules, passengers will finally have a legal right to the standard of customer service they deserve."

The American experience

As I stepped up to the Austrian Airlines desk at Cairo on Monday, the official looked stressed. When the next customer in line was summoned to the counter, it became clear why. "We are overbooked on this flight. Unfortunately you will have to stay here overnight and fly tomorrow on Lufthansa."

The Germany-bound passenger exploded with fury. He had booked six months earlier. How could his seat have been sold to someone else? Very easily.

Overbooking benefits airlines, passengers and the environment. It keeps fares lower and means planes are fuller.

On almost every departure, passengers fail to show up. Business travellers can do this on full-fare tickets without penalty, while many economy travellers have no incentive to cancel because discount fares are often non-refundable. So airlines take a bet that they can get away with selling more tickets than there are seats.

For straightforward solutions, you need only look to America. US carriers ask for volunteers who are prepared to accept £100, or £200, or they keep increasing the bid until enough passengers are persuaded to take a later flight.

The practice is so routine that I always try to make sure my plans are flexible. I offer to take the airline's dollar when it calls for volunteers to take cash, a night in a hotel and possibly an upgrade to first class next day.

Simon Calder