High airline passenger compensation payments for delayed and cancelled flights in the EU need to be reformed after contributing to recent airline insolvencies, according to a top German aviation industry leader.
The European aviation industry is undergoing a consolidation phase at present, with the insolvency of various smaller airlines such as Small Planet, VLM, Primera and Skywork, Klaus-Dieter Scheurle, president of the Germany aviation industry association BDL, told fvw in an interview. However, with the top five airlines having a combined market share of 66%, it is still a long way from the US situation where the top five account for 85% of the market. “We expect consolidation to continue in Europe,” he said.
With several insolvent airlines blaming high costs for flight compensation payments for their financial collapse, Scheurle said the EU urgently need to update the regulation, which dates back to 2004. Under this legislation, passengers are entitled to compensation of between €250 and €600 per flight for delays of over three hours or cancellations. These sums are often significantly more than the original flight price, especially for European short-haul routes.
“The way how companies in the EU are obliged to make compensation payments goes far beyond the rules in the rest of the worldwide air transport sector,” Scheurle complained. “The current European approach thus has a one-sided effect on European companies who handle the bulk of their flight operations at European locations.”
This is not only bad for airlines and their market share but also for consumer protection, according to the head of the German air traffic control authority DFS and part-time BDL president. “That is why the EU must urgently update the airline passenger rights regulation,” he said.
Scheurle welcomed a proposal from the European Commission to achieve this. “It is logical and suitable to balance out the interests of consumers and business.” In particular, he welcomed the proposal to change the length of flight delay liable for compensation from three to five hours.
“The European Parliament already sets this factor at three hours. The Commission’s proposal would realistically enable the airline to obtain a replacement plane in the case of a delay,” he argued. The definition of exceptional circumstances also needs to be clarified, he added.
However, the Commission’s proposal has been held up since June 2015 since the 28 EU governments have not been able to find agreement.
The BDL president also welcomed the results of the recent ‘aviation summit’ in Hamburg called by German transport minister Andreas Scheuer where airlines, airports and the DFS agreed to work more closely to avoid a repetition of this summer’s flight chaos.
The key measures agreed include reorganisation of airport security controls to cut down on queues with a greater role for airports, airlines flying at lower heights to ease flight congestion at higher heights, and reorganisation of air traffic controller working times to increase capacity. Airlines will monitor time-critical flights more closely, make flight schedules more flexible and improve passenger information and communications.
“You cannot exclude waiting queues, delays and cancelled flights. But what passengers had to experience this year cannot be allowed to happen again,” he declared. “We are working at top speed to implement the agreed measures so we can offer our customers the quality that they expect from us.”
* The situation in the European aviation market will be among the topics discussed by top executives and senior managers at the European Aviation Symposium 2019, organised by fvw, consultants Prologis and the Travel Industry Club. The event takes place at Munich Airport on January 29 - 30, 2019.