Cash machine: delayed flights trigger big payouts / AFP/Getty

The man who pays his way

It hasn't been a brilliant few weeks for Peterborough. The city is the headquarters of Thomas Cook, founded by a man who did more for mobility than anyone. But as I reported last month, Peterborough was named as the most car-dependent place in Britain, taking last place in the Campaign for Better Transport's annual survey.

A rapid riposte arrived from Mark Speed of the city council: "Our local bus routes are thriving and we enjoy one of the best-connected cycle routes in the country."

Readers' responses were not so charitable. One commented: "Public transport is a shambles. The only people making money are the overpriced and rude taxi drivers who could not find their own way home without their satnavs." Another said: "Peterborough 'the worst place to be in Britain without a car'? No, you're wrong, it's the worst place to be in Britain."

Yet here's some positivity from Peterborough, from a member of Thomas Cook customer services: "I am really pleased to be sending you a holiday voucher to the value of £646," she writes.

Why has Britain's second-biggest tour operator decided to reward two lucky readers, Gary and Val Perrin, with £323 each? Because of a 27-hour delay on a flight from Antalya in Turkey to Manchester. European passenger-rights rules, known as EC261, stipulate €400 compensation for cancelled or heavily delayed flights of that distance.

These European rules are misconceived and contrary to the best interests of the majority of travellers. The compensation obligations add to airlines' costs while providing disproportionate rewards to a random selection of passengers. Buy a Manchester-Mallorca flight for £50, and experience some mild inconvenience and you could can claim six times the original fare – while others who suffer much worse disruption get nothing. The 400 BA passengers heading for South Africa who endured a 23-hour delay due to last month's air-traffic control meltdown get no compensation because it was manifestly not the airline's fault.

If a minor technical problem means your holiday flight to Malaga arrives two hours and 59 minutes behind schedule, you also get nothing. But one minute later and every passenger on the plane becomes entitled to €400. Suppose a Thomas Cook Boeing 757-300 is delayed on a round trip to the Costa del Sol: the potential free cash for passengers, and converse financial hit for Messrs Cook, totals £175,000. That is an absurd penalty. Yet it is the law; airlines are obliged to respect it.

When settling claims, the law also stipulates that airlines may offer travel vouchers instead of cash – but only with the signed agreement of the passenger. And a rational passenger is only going to accept vouchers for future travel if there's something in it for them. Monarch, for example, offers a generous choice between a cheque for €400 or a voucher for €480; regular passengers prefer the latter. But Thomas Cook does not seek signed agreement before supplying vouchers. Mr and Mrs Perrin were sent "as full and final settlement" a voucher, not cash.

A spokesman for Thomas Cook Airlines said: "Unless originally specified by the customer we can sometimes offer vouchers as compensation, but if the customer does request cash during the process, or would rather have cash after we have offered vouchers, we will exchange them." That's the wrong way around: successful claimants are due cash unless they specifically agree otherwise.Thomas Cook says it is adjusting its website so that when passengers apply for compensation they can choose between vouchers and cash.

Stelios stole the show

"Cash" means a cheque or a bank transfer, of course, not a wad of actual £10 notes. Or does it? One day in 1997, easyJet's founder, Stelios Haji-Ioannou, was called by his marketing director, Tony Anderson. A hundred passengers, stranded overnight at Luton, were getting angrier by the minute. This was long before European law prescribed compensation, but the boss instructed his staff to pay £100 to every passenger.

In a fascinating new book, easyLand: How easyJet conquered Europe (downloadable at a no-frills £1.19), Mr Anderson says the finance director was ordered to find £10,000 in cash.

"He managed to persuade the Thomas Cook bureau de change in the airport terminal to lend us the money, which we duly stuffed into a briefcase," he recalls. "With the biggest call-centre agent I could find standing guard, the passengers formed a queue to collect their £100. The first person in line was a vicar who said 'Bless you my son,' as I handed it over."

Airline's Bard joke

Tony Anderson's book is well timed for easyJet's 20th anniversary this year. It tells the inside story of the airline, from start-up to aviation giant.

When the first international route began, from Luton to Amsterdam, easyJet still took bookings only by phone. The airline struggled to find sufficient Dutch-speaking staff locally, so a partnership with a call centre was established in Holland. Quickly it emerged Dutch customers were talking to Dutch sales staff in English. The partnership ended, but some customer-service staff were kept on because "the Dutch revert to their native language when complaining".

Even Shakespeare was enlisted by Mr Anderson for marketing Geneva-Barcelona flights. Arcane Swiss rules meant seats to Spain could be sold only in conjunction with accommodation. So the airline erected some cheap tents on a hillside in Catalonia. The only possible slogan: "Now is the winter of our discount tent."

Mr Anderson's job at the time Stelios recruited him? Product development manager for Thomas Cook. In Peterborough.