Aviation: passengers’ rights to compensation against EU Community carriers for two leg journeys

United Kingdom

In CS v České Aerolinie a.s., the European Court of Justice confirmed that passengers have the right to compensation payments against EU Community carriers with whom they contract, even if the delay was solely caused by a connecting airline, which is flying from outside the EU.

Factual Background

Several passengers bought air tickets to fly with České Aerolinie a.s. from Prague to Bangkok via Abu Dhabi. The first flight (Prague to Abu Dhabi) was operated by České and it ran smoothly: it arrived on time and to the correct destination. However, the second flight (Abu Dhabi to Bangkok), which was carried out by Etihad Airways, arrived over 8 hours late. Etihad Airways had a code-share agreement with České, which meant that although the passengers had bought their flights from České (an EU Community carrier) a different airline which was not an EU Community carrier (Etihad Airways) undertook the connecting flight.

České refused to compensate the eleven passengers who requested a repayment as a result of the delay, and subsequently they brought a claim against České.

Legal background

The Flight Passenger Rights Regulation (EC261/2004) provides compensation to passengers of severely disrupted flights.

Following hearings before various Czech Courts, the CJEU was asked to make a preliminary ruling on whether an EC Community carrier was obliged to pay compensation to passengers under Article 3(5) of the Regulation when the delay to reach a flight’s final destination results from the failures of a connecting airline operating outside the EU.

Code-share agreement is one agreement

The CJEU ruling confirms that flights consisting of multiple connecting flights but booked under one reservation are to be treated as a whole. As a result, one should assess the flight's point of departure and final destination when determining whether the Regulation should apply.

Who is liable for compensation?

Only the ‘operating air carrier’ is liable to pay compensation under the Regulation. Because flights consisting of multiple connecting flights are treated as a single operating unit, even if the first leg of the journey goes to plan, the contracting air operator will not be safe from paying compensation due to the late performance of the subsequent flights.

Indeed, Article 3(5) states that where an air carrier has no contractual relationship with a passenger (as was the case in České, as Ethiad Airways performed the second leg of the journey under the code-share agreement), the second air carrier is seen to have performed its obligations on behalf of the air carrier that has a contract with the passenger. Further, the CJEU judgment reminds us that the objective of the Regulation (Recital 1) is to provide a high level of protection for passengers.

This approach ensures that passengers can obtain compensation from the operating air carrier with whom they entered the contract, and does not require them to study the arrangements in place between the different air carriers (Recital I).

It is therefore the contracting airline which is liable to discharge any payable delay compensation, including for flights which the air carrier did not perform or directly control.

Comment

This case confirms that air carriers (and their insurers) are more exposed to paying delay compensation for claims from passengers.

The Ceske case reminds us of the importance of keeping recovery prospects in the forefront of air carriers’ / insurers’ minds, such that (i) recovery rights are clearly provided for in the code-sharing agreement which air carriers enter into with the others who will be operating the connecting flights; and (ii) recovery claims are constantly considered when the delay was caused by connecting airlines.

Further reading:

CS and others v Ceske Aerolinie a.s. Case C‑502/18.