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Consequences of a travel agency´s actions for air carriers

Consequences of a travel agency´s actions for air carriers

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In two recent decisions, the Court of Justice of the European Union (CJEU) dealt with the consequences of a travel agency´s actions for air carriers in context with Regulation 261/2004.

In case C-307/21, the passengers booked flights from Düsseldorf to Tangier via the travel agent Kiwi.com. The air carrier was provided with an e-mail address, which was most likely automatically generated by Kiwi.com and to which the passengers had no access. In the following, the air carrier sent an e-mail to this e-mail address in order to inform the passengers about the cancellation of their flight. Since this e-mail has been sent 14 days prior to the date of the scheduled flight, it would have complied with Article 5 (1) (c) (i) of Regulation 261/2004, resulting in the passengers not being entitled to receive a compensation within the meaning of Article 7 of Regulation 261/2004. However, Kiwi.com did not forward this e-mail to the passengers.

The CJEU decided on 27 September 2022 that the air carrier is obliged to pay a compensation to the passengers if the travel agency didn´t forward the air carrier´s e-mail in due time even if the air carrier was not aware of the fact that the e-mail address it has been provided with could only be used to contact the travel agency and not the passengers directly.

In case C‑436/21, a passenger booked the following itinerary: Stuttgart-Zurich-Philadelphia-Kansas City. The flight from Stuttgart to Zurich was operated by Swiss International Air Lines AG, while the other two flights were operated by American Airlines. This itinerary was booked via a travel agency in the form of a single electronic ticket with a single user price for the entire journey and the number of this ticket was displayed on the boarding passes relating to the flights. While the previous flights were on time, the flight from Philadelphia to Kansas City was delayed by more than four hours.

During the proceedings initiated in Germany against American Airlines, the involved German courts stated that Regulation 261/2004 does not apply, since American Airlines did not operate a flight departing from the territory of a member state of the EU. According to the German courts, there was nothing to indicate that American Airlines had undertaken to transport the passenger from Stuttgart to Kansas City, or that it had assumed responsibility for that transportation under a code sharing agreement. Subsequently, the case was brought before the German Supreme Court and the CJEU.

In its ruling C-436/21 the CJEU stated that – in the interest of the high level of protection for passengers – the concepts of “connecting flights” and “reservations” must be interpreted broadly, which lead to the CJEU´s decision that there has been a connecting flight even though the operating air carriers did not have a specific legal relationship. Therefore, the place of departure (Stuttgart, Germany) is of relevance, Regulation 261/2004 is applicable, and the passenger may be entitled to a compensation payment for the delay of his last flight leg.

Don´t hesitate to contact our Aviation Team to learn more about the consequences of a travel agency´s actions for air carriers in connection with Regulation 261/2004 and about passenger claims in Austria in general.

Legal fees and no-reply email addresses

Legal fees and no-reply email addresses

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Many questions of our airline clients concern legal fees demanded by passengers and under what circumstances these fees must be paid. Especially when letters of notice are sent to no-reply email addresses and subsequently lawsuits are filed, there are often uncertainties. The aim of today´s article is to briefly illustrate the Austrian system concerning the reimbursement of legal fees and to answer the question if legal fees must be paid when a letter of notice has merely been sent to a no-reply email address.

Airlines are often confronted by letters of notice sent by a lawyer with which not only a ticket reimbursement or compensation payment is demanded, but also legal fees for the lawyer´s work. Such legal fees must only be paid if the involvement of a lawyer was necessary for the passenger. This is the case if, e.g., the passenger already contacted the airline himself, but the airline refused to pay the demanded amount or did not react to the passenger´s query. Additionally, according to court practice, it can be necessary to involve a lawyer if the airline fails to inform the passenger about his rights granted by the Regulation 261/2004 (in violation of Article 14 of this regulation).

In Austrian court proceedings, the prevailing party is entitled to receive a reimbursement of its legal fees by the opponent (in case of a partial victory: on a pro rata basis). These legal fees are calculated in accordance with the Lawyers Tariffs Act (Rechtsanwaltstarifgesetz), regardless of any possible separate agreement between lawyer and client regarding the remuneration.

However, also these legal fees are only reimbursed if the respective actions (e.g., filing a lawsuit) have been necessary. If the passenger (or his lawyer) did not contact the airline before filing a lawsuit, the airline can refuse to pay his legal fees and even demand reimbursement for its own legal fees if it acknowledges and pays the passenger´s claim at the first moment possible.

The Commercial Court Vienna had to deal with a case in which the passenger did not contact the airline first and his lawyer sent a letter of notice only to a no-reply email address used by the airline. The lawyer ignored the standardized reply email that asked him to use another email address for his query and filed a lawsuit. Subsequently, the airline acknowledged and paid the claim without undue delay, refused to pay the passenger´s legal fees and demanded reimbursement for its own legal fees. The Commercial Court Vienna decided in the airline´s favor (case number: 60 R 42/21p).

Don´t hesitate to contact our Aviation Team to learn more about the system of legal fees passengers may demand to in connection with passenger claims and passenger claims in Austria in general.

The breakdown of an airport´s refueling system constitutes extraordinary circumstances

The breakdown of an airport´s refueling system constitutes extraordinary circumstances

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On 7 July 2022, the European Court of Justice (ECJ) decided that the breakdown of an airport´s refueling system constitutes extraordinary circumstances within the meaning of Article 5 (3) of Regulation 261/2004 (case C-308/21).

In its reasoning, the ECJ once more pointed out the criteria it regards relevant when it comes to extraordinary circumstances: the events that occurred must not be inherent in the normal exercise of the activity of the air carrier concerned and they must be beyond the air carrier´s actual control.

Regarding the first criterion, the ECJ stated that, in principle, refueling operations fall within the scope of the normal exercise of an air carrier´s activity and that, therefore, a technical issue arising during the refueling would not be suitable to constitute extraordinary circumstances. However, a general failure in the refueling system managed by the airport must be treated differently than a technical issue that, by its nature, is only confined to a single aircraft. Therefore, the ECJ came to the conclusion that such general failures of the refueling system are not inherent in the normal exercise of the activity of the air carrier concerned.

Regarding the second criterion, the ECJ once again highlighted the importance of the distinction between “internal” and “external” events, whereas only “external” events are regarded to be beyond the air carrier´s actual control. Therefore, if the refueling system at an airport is managed by this airport or a third party, a general breakdown of this system is regarded to be beyond the air carrier´s control.

Since both criteria of extraordinary circumstances are met, the ECJ decided that the general breakdown of an airport´s refueling system constitutes extraordinary circumstances. Therefore, the respective air carrier is not obliged to pay compensation to the passengers, provided that all reasonable measures were taken.

Don´t hesitate to contact our Aviation Team to learn more about passenger claims in Austria.

Strikes because of an authority´s decision constitute extraordinary circumstances

Strikes because of an authority´s decision constitute extraordinary circumstances

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On 30 June 2022, the district court Schwechat ruled in three cases we are handling for a client that strikes constitute extraordinary circumstances if the reason for the strikes is an authority´s decision. The court argues that such strikes that are based on demands that can only be fulfilled by authorities (and not the airline itself) are beyond the airline´s control. In the cases at hand, not the airline´s employees, but the ground handling staff was striking and thereby disturbing the normal operations.

These rulings are in line with the ECJ´s ruling C-28/20, in which the ECJ mentioned: “If, however, such a strike originates from demands which only the public authorities can satisfy and which, accordingly, are beyond the actual control of the air carrier concerned, it is capable of constituting an ‘extraordinary circumstance’ […]”

Therefore, airlines are not obliged to pay compensation (Art 7 of Reg 261/2004) if flights are cancelled or significantly delayed due to such strikes, provided that all reasonable measures in connection therewith are taken.

Don´t hesitate to contact our Aviation Team to learn more about when strikes constitute extraordinary circumstances and passenger claims in Austria.

Stopovers and the Regulation 261/2004

Stopovers and the Regulation 261/2004

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In February 2022, the European Court of Justice (ECJ) rendered two decisions regarding the relevance of stopovers in connection with jurisdiction (C-20/21) and the scope of the Regulation 261/2004 (C‑451/20).

In case C-20/21, a passenger booked a flight from Warsaw to Male with a stopover in Frankfurt (single booking). The first flight leg (from Warsaw to Frankfurt) was delayed and, therefore, the passenger missed the second flight leg (from Frankfurt to Male). Subsequently, the passenger sued the airline in Frankfurt.

The ECJ ruled that the court in Frankfurt has no jurisdiction, because due to Frankfurt merely being a stopover, it must not be regarded as “place of performance” which would be necessary to establish jurisdiction.

In case C-451/20, a passenger booked a flight from Chişinău (Moldova) to Bangkok with a stopover in Vienna (single booking). The first flight leg (from Chişinău to Vienna) was cancelled less than seven days prior to the scheduled departure and the passenger was rebooked to fly from Chişinău to Bangkok with a stopover in Istanbul. The passenger then sued the airline in Schwechat (competent court for Vienna airport).

The ECJ ruled that the Regulation 261/2004 is not applicable in this case since both the place of departure and the place of arrival are located outside the European Union. The fact that the planned stopover in Vienna is located inside the European Union does not lead to this case falling within the Regulation´s scope.

On a side note: in case C-559/16 the ECJ already clarified that the distance mentioned in Article 7 (1) of the Regulation 261/2004 relates to the distance calculated between the first point of departure and the final destination. Therefore, also in this regard stopovers are not of relevance according to the ECJ.

Don´t hesitate to contact our Aviation Team to learn more about the relevance of stopovers in connection with Regulation 261/2004.

Changes of scheduled departure times as cancellations

Changes of scheduled departure times as cancellations

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On 21 December 2021 the European Court of Justice (ECJ) rendered two decisions regarding the question if and under which circumstances changes of scheduled departure times qualify as cancellations within the meaning of Article 5 of Regulation 261/2004.

In case C-395/20, a flight from Düsseldorf to Antalya that was initially scheduled to depart at 13:20 was postponed to depart at 16:10. The ECJ decided that because the departure time was postponed by less than three hours, the flight must not be regarded as being cancelled.

In case C-263/20, a flight from Palma de Mallorca to Vienna that was initially scheduled to depart at 14:40 was brought forward to depart at 08:25. The ECJ decided that because the departure time was brought forward by more than one hour, the flight must be regarded as being cancelled (leading to the consequences stipulated in Articles 7, 8 and 9 of Regulation 261/2004).

On a side note: in this case the ECJ also stated that it is not sufficient for an airline to merely inform the intermediary through which a flight was booked about the changes of the scheduled departure time two weeks in advance to comply with Article 5 (1) (c) (i) of Regulation 261/2004 and to avoid being obliged to pay a compensation – even if the passenger´s contact details were not disclosed to the airline.

Don´t hesitate to contact our Aviation Team to learn more about what changes of scheduled departure times constitute cancellations under Regulation 261/2004 and about passenger claims in Austria in general.

Compensation payments must be deducted

Compensation payments must be deducted

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In one of its rare rulings regarding the Regulation 261/2004, the Austrian Supreme Court decided in the case 4 Ob 177/21i that compensation payments an airline paid to a passenger in accordance with Article 7 of the regulation must be deducted from further claims for immaterial and material damages asserted by the passenger.

While the regulation sets forth certain passenger rights (Art 7: compensation, Art 8: reimbursement or re-routing, Art 9: care), other claims a passenger may assert (e.g. damages for a hotel booking or a rental car that he could not use) must be based on national law.

In the case at hand, the passenger claimed that the compensation payment aims only to reimburse him for the inconveniences linked to a denied boarding/cancellation/long delay and, therefore, must only be deducted from immaterial damages. However, the Austrian Supreme Court clarified that in such cases the compensation payment must also be deducted from material damages like expenses for a hotel booking or a rental car.

Don´t hesitate to contact our Aviation Team to learn more about when compensation payments must be deducted under Austrian law and about passenger claims in Austria in general.

Payments to the credit card accound are not sufficient

Payments to the credit card account are not sufficient

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The regional court Korneuburg decided in the cases 22 R 171/21h, 22 R 196/21k and 22 R 210/21v that while Article 7 (3) of Regulation 261/2004 does not generally prevent payments to the credit card account used by a passenger, it must be assessed in accordance with applicable national law whether such payments relieve an airline from its obligation to pay.

If Austrian law applies, payments to the credit card account a passenger used to pay for his/her tickets are not sufficient for an airline to fulfill its obligations (i.e., mainly in connection with a ticket refund or a compensation payment). The regional court argued that only payments made to an account the passenger disclosed vis a vis the airline for refund purposes are regarded sufficient to relieve the airline from its obligation to pay.

These rulings especially have an impact on cases in which it is uncertain whether a passenger already received a payment or when exactly he/she received the payment. To comply with these rulings, it would be advisable to either have passengers specify the account they demand a payment to be made to during the refund application process or to contact the specific passenger before issuing a payment.

Don´t hesitate to contact our Aviation Team to learn more about passenger claims in Austria.