Published by Global Banking & Finance Review®
Posted on November 18, 2025
2 min readLast updated: January 21, 2026
Add as preferred source on GoogleIATA's Willie Walsh criticizes the EU for insufficient actions on airline competitiveness, focusing on outdated passenger compensation policies and proposed reforms.
BRUSSELS (Reuters) -Willie Walsh, director general of the International Air Transport Association (IATA), said on Tuesday that the European Union has taken "very little action" to address airlines' competitiveness and criticised its passenger compensation policy.
European airlines have numerous challenges in recent years from air traffic control strikes, especially in France, engine manufacturer issues to delays in new, fuel-efficient aircraft from Boeing.
EU institutions are currently negotiating a reform of the bloc's 20-year old passenger rights' regulation, called EU261, which Walsh said was long outdated.
Walsh said the compensation scheme for flight delays punishes 99% of passengers as fewer than 1% of flights are delayed past the three-hour threshold.
Member states agreed in June to push out the flight delay threshold to four hours from the current three for short haul flights and six hours for long haul, subject to agreement with the European Parliament.
"This would reduce the perverse incentive for airlines to cancel delayed flights, and be consistent with passengers’ preference to arrive late rather than not at all," IATA said in a statement earlier on Tuesday. IATA had been calling for thresholds of five hours and nine hours respectively.
The European Parliament, however, wants to axe the thresholds and add the ability to bring a free cabin bag, among other changes. The parliament, Commission and council are due to meet on Wednesday and in early December to continue negotiations.
(Reporting by Julia Payne; Editing by Joe Bavier and Susan Fenton)
EU261 is a regulation that outlines the rights of passengers traveling within the European Union, particularly regarding compensation for flight delays and cancellations.
Passenger compensation refers to the financial reimbursement that airlines must provide to travelers when their flights are delayed or canceled, as mandated by regulations like EU261.
Air traffic control strikes are work stoppages by air traffic controllers, which can disrupt flight schedules and lead to delays or cancellations for airlines and passengers.
A flight delay threshold is the specific amount of time a flight must be delayed before passengers are eligible for compensation under regulations like EU261.
A fuel-efficient aircraft is designed to consume less fuel compared to older models, resulting in lower operational costs and reduced environmental impact.
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