Air Travellers Given Right to Compensation

Air travellers whose flights are delayed, overbooked or cancelled will be legally entitled to generous levels of compensation following a landmark European Union deal.

But the pact between the European parliament and EU government drew howls of protest from low-cost airlines yesterday. They claimed the deal would force air fares up and argued the new rules were discriminatory.

Under the deal, passengers will, for the first time, be legally entitled to compensation if their flight is cancelled.

Compensation amounts will vary between £175 for short haul flights and £420 for long-haul trips. Passengers will also be offered a full refund for their ticket.

The same levels of compensation and a refund will also be given to travellers who are bumped off flights which are overbooked. This is more than twice the current levels of compensation for overbooking.

Low-cost airlines had wanted compensation levels to be linked to the price of the original ticket. They are concerned that the compensation will be more than the price of the original ticket.

The budget carriers argued that more traditional airlines charge far more for their tickets and would therefore find the fixed compensation levels far less painful.

However, their intense lobbying efforts fell on deaf ears and some airlines claimed last night that the new rules would hit them hard.

Budget airline EasyJet said the deal would have a "dramatic impact" on the industry and force up fares since, in many cases, the statutory level of compensation would far exceed the cost of the ticket.

"Of course this will put up fares," said an EasyJet spokeswoman. "If you are on a cancelled £37 flight to Belfast and the airline has to pay you £178, ultimately the cost of the fine is going to be pushed on to passengers. Who else is going to pay for it?"

Virgin Express agreed that low-fare airlines were being discriminated against.

"The principle is unfair," said a Virgin spokesman. "The goal of the regulation is very worthy but it could have been done in a better way. A system where compensation was linked to the ticket price would have been much fairer."

The Consumers' Association poured cold water on the claims but accepted the impact on the low-cost sector would have to be kept under review.

"Any claims by airlines that changes of this sort will put up fares has to be treated with some scepticism," said Phil Evans, the organisation's principal policy adviser. However, given the importance of the low cost sector in the UK anything that undermines its competitiveness would be a concern."

Under the new rules - which are expected to come into force in the first half of next year - airlines will also be legally obliged to offer passengers who have suffered delays of over five hours the choice between a full reimbursement for their ticket or a return flight to their initial point of departure.

Currently airlines are not obliged to offer any assistance although some do.

Meals, hotels and free phone calls will also have to be offered by airlines on a sliding scale for delays of between two hours and one day.

Brian Simpson, a Labour MEP specialising in transport affairs, said the European commission would now look at introducing similar compensation schemes for Eurostar and cross-Channel ferry services.

"This is the beginning of the process not the end," he said. "We have as many complaints (about delays and cancellations) for high-speed trains and ships as we do for planes."

The commission will also study the feasibility of introducing such schemes on domestic intercity road and rail services, he added.

BEUC, the pan-European consumers' lobby, said it was glad that the new airline regulations applied to charter flights as well as scheduled services.

But it added that it was extremely disappointed that airlines had negotiated get-out clauses for avoiding paying out compensation to passengers in "extraordinary circumstances" such as strikes and freak weather.

"We understand that airlines are facing a very difficult time but everything has been watered down," said a spokeswoman.