Smaller European airlines push back on passenger compensation reforms
European Airlines Challenge Proposed Passenger Compensation Changes
(Corrects paragraph 4 to clarify that some European airlines are calling for no compensation at all, not the signatories of the letter)
By Joanna Plucinska and Julia Payne
Background on EU261 Passenger Rights Regulation
LONDON, May 19 (Reuters) - Smaller European airlines urged EU officials on Tuesday to reconsider planned reforms to passenger compensation rights, arguing that a spike in jet fuel prices due to the Iran war has left them with no room to take on additional financial burdens.
EU institutions are negotiating a reform of the bloc's decades-old passenger rights regulation, called EU261. Under existing rules in place since 2004, air passengers can claim compensation for flights delayed by more than three hours from 250 euros ($292.95) and more depending on the flight length. The next round of talks is set for June 2.
Airlines' Letter to EU Officials
Signatories and Their Concerns
"We urge European policymakers to pause and reassess," executives from 35 airlines including Air Serbia, SkyExpress, Luxair, Atlantic Airways and SprintAir said in a letter sent to EU officials on Tuesday, seen by Reuters. Other airlines that signed the letter included KLM Cityhopper and Air Corsica.
Disagreements Over Compensation Thresholds
The European Parliament and EU countries are at odds over increasing the flight delay threshold for compensation as well as the maximum refund. Parliament wants to keep the threshold unchanged at three hours for short-haul flights while member states want it raised to four hours. Some European airlines are calling for the threshold to be longer or no compensation at all. The smaller European airlines did not set out explicit demands in the letter.
Additional Proposals and Airline Opposition
Free Cabin Bag Proposal
The co-legislators are also at odds over a Parliament proposal to include the right to a free cabin bag of up to 7 kilograms (15lb) in the new rules, which the airlines also oppose.
Airlines' Recommendations to Policymakers
"Conduct a full impact assessment, in the new geopolitical scenario, recognise the unique role of regional aviation, adjust the compensation regime to reflect operational realities, discourage flight cancellations and avoid pushing essential air links out of existence," airline executives said in their letter.
Impact of Rising Jet Fuel Costs
Financial Strain on Small Carriers
They added that small European carriers have been hit particularly hard by the spike in the price of jet fuel, and are more vulnerable due to operating thin routes "with very low profit margins", making it harder for them to pay out if disruptions occur.
As it stands, jet fuel costs have practically doubled around the world, with some airlines warning of long-term negative effects on their profit margins.
Importance of Regional Connectivity
"Europe’s strength lies in its connectivity, not only between major capitals, but across every region and community. Regional aviation is what makes that connectivity possible. Do not let this be the last straw," the letter said.
Other Passenger Rights Provisions
Undisputed Rules
Other rules, which are not in dispute, include free seating for an accompanying adult next to a child or person with reduced mobility.
Reporting and Editing
(Reporting by Joanna Plucinska; Editing by Susan Fenton)
