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Have your say: Government opens consultation on new UK flight compensation rules

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The Government launched a consultation yesterday on ways of improving consumer protection when flying.

EC261, which is still in place post Brexit, has arguably worked well, but is a blunt instrument. It pays out fixed sums of money for long delays – amounts which can be multiples of the ticket price in Economy, but only a fraction of the cost in Business Class. My brother picked up €2,400 when an Economy trip to New York for his extended family was delayed by four hours – was this excessive?

Weakly written rules mean that airlines have had to rely on case law to set guidance around what is and is not covered. These rulings have generally gone against airlines, often (arguably) unreasonably.

If you don’t like the outcome of your claim, challenging EC261 decisions is difficult unless the airline in question is signed up to arbitration (BA has, some have not).

What is going to change?

Here’s the odd thing.

  • The Government proposals will only cover DOMESTIC flights
  • It is hiding behind the excuse of needing to respect the Montreal Convention to avoid launching a new compensation system for international flights. It isn’t clear if the existing EC261 rules will be retained or, in a huge boost for airlines and huge loss to consumers, simply wiped from the statute book. EC261 must be retained for EU-UK flights on all airlines and UK-EU flights on EU airlines.

The Government has asked for views on how the compensation system should be reformed, and the routes available to pursue claims if compensation fails.

What changes are being put up for consultation?

Increase the powers of the Civil Aviation Authority

The CAA, the UK aviation regulator, is responsible for enforcing consumer laws that apply specifically to aviation, including passenger rights during flight disruptions.

The problem is that the CAA has very few powers in law to enforce these rights. It is mainly restricted to “consultation with businesses” and “sending warning letters”, which is not the sort of behaviour that scares many airlines. To quote the consultation paper:

“When enforcement is necessary, the CAA generally utilise less burdensome enforcement powers, as good regulatory practice, and to avoid lengthy and costly processes, such as court action. In addition, currently civil cases have no financial sanctions for breaches of consumer laws, which limits the power to deter noncompliance.”

This is likely to change. The Competition & Markets Authority is likely to get improved enforcement powers soon and these could be extended to the CAA.

Improving the rights of individual passengers

To quote:

“Some airlines are members of an Alternative Dispute Resolution (ADR) scheme in the UK which provide a route to escalate complaints. However, if the airline is not a member of an ADR scheme, an individual has limited options to seek redress; with court action being costly and time consuming.”

British Airways IS a member of such a scheme, along with 21 other airlines. We tend to encourage readers to use the CEDR mediation scheme – our guide is here – before taking the Money Claim Online / Small Claims Court route.

CEDR is an acceptable route for complaints about:

  • denied boarding, delay or cancellation
  • destruction, damage, loss or delayed transportation of baggage
  • destruction, damage, or loss of items worn or carried by the passenger
  • complaints about airlines due to problems faced by disabled passengers or passengers with reduced mobility when using air transport services
  • disputes where consumer alleges the business is not trading fairly

Most regulated business sectors in the UK make membership of an arbitration scheme compulsory. This is not the case with aviation. This position is likely to change, although it would need to be decided how it would apply to non-UK registered carriers.

Compensation for delays and cancellations

The current EC261 rules apply to flights:

  • departing from a UK airport
  • departing from another country arriving in an airport in the UK, if the airline is a
    UK or EU carrier
  • departing from another country arriving in an airport in the EU, if the airline is a
    UK carrier

In the event of cancellation by the airline, you are entitled to a full refund or to be re-routed. For cancellations and for delays resulting in the passenger arriving more than three hours after the original arrival time, you are entitled to compensation for the inconvenience. This is paid at set rates depending on the distance of the flight, regardless of ticket price.

For domestic flights, the Government proposes a full refund for a delay of 3 hours or more, and a sliding scale of payments for shorter delays. This would be similar to the structure put in place for rail passengers.

For international flights, it is unclear what the plan is. The ability for the Government to adjust delay payments for international flights is restricted by the Montreal Convention. This is why, legally, EC261 pays you for ‘inconvenience’ for a delay or cancellation rather than for the delay itself. There is no mention of whether EC261 will be replaced – in which case, why waste time with a different scheme for domestic flights? – or scrapped, in which case the airlines will be laughing.

In many ways, the compensation system chosen is less important than the structure put in place for apportioning blame. If the Government does not learn from all of the case law built up around EC261, the new system will be starting from scratch. We will spend the next decade waiting for the courts to decide if a lack of spare parts, crew sickness, bad weather, freak weather, pandemics etc etc etc are grounds for paying up.

Virgin Atlantic A350

It is also worth noting that the proposed compensation system is based on a percentage of the cash ticket price. This is likely to lead to no payment to holders of Avios tickets and potentially the prioritising of frequent flyer miles tickets for downgrades or off-loading, since no compensation would be due.

(There was a period pre-covid when BA appeared to prioritise 2-4-1 ticket holders for downgrading or offloading. Whilst never officially confirmed – obviously – the fact that BA would often initially offer zero EC261 compensation to the companion ticket holder, on the grounds that their ticket was free, meant that we could never discount the fact that this was not a coincidence.)


The Montreal Convention means that airlines can make fixed, low, compensation payments if a wheelchair or other mobility equipment is damaged. This is, apparently, well below the replacement value of the equipment in many cases..

The Government is proposing to improve the law for domestic flights but has no power to change it for international flights.


On the face of it, this is a confusing consultation document. The focus on only changing the rules for domestic flights means that 90% of UK airline passengers will see no benefit.

When it comes to international travel, it is not clear why the Montreal Convention is being invoked. If the Government is quietly proposing to scrap EC261 for flights outside the EU – but not replace it with anything beyond the Montreal Convention rules – this will represent a substantial degredation of the protections currently offered to passengers.

It would also lead to three compensation regimes:

  • the railway-style system for domestic flights – which, given BA has base fares as low as £2 on many domestic flights, is likely to pay you next to nothing (and what happens if you are connecting to an overseas flight – how do you calculate the domestic portion?)
  • EC261 for EU-UK flights on all airlines and UK-EU flights on EU airlines
  • no legal compensation rights, beyond those set in the Montreal Convention, for all other flights, albeit you can use your improved arbitration rights to try to negotiate a settlement with your airline

Is this really a sensible way to move forward?

The full document is here. You have until 27th March to submit a response.

Comments (106)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Track says:

    This is a complex matter, and while EU261 is firm on customer protection, to get the compensation prescribed means going through a legal process.

    One thing it does is protecting the rewards passengers from downgrades. If the airline can sell the seat more expensively by factor of 2x, and there is no penalty — it will do so.

    • Lady London says:

      “Getting the compensation required means going through a legal process”.

      This should not be required. Airlines know the law. Where they deny rights to reroute especially, or where refunds (if chosen by the passenger) are delayed, then the law actually needs an addition such as 25% or 50% or 100% increase to the compensation or refund if the judge feels this was a clear case that should have just been paid to the passenger instead of denied forcing the passengerbto take the airline to court ie MCOL. Same if any refund is delayed beyond x days the airline should have to pay more.

      Currently the airline does not lose anything by denying or delaying – except claims made by very intrepid passengers. Already, they are not paying more than a tiny fraction of the total compensation, duty of care and reroute costs EU261 says they owe passsengers they delay and cancel.

      If airlines were currently paying out in full willingly and promptly then I might see some sense in a review of legislation to ensure fairnesd prevails

  • His Holyness says:

    As I know the Brexit is crap comments will flow in shortly, Tory Scum etc. Which is fine as I support an Independent Scotland.

    I just want to go back to the basis of EC261 on the EU level. EC261 is a total mess. I’ve always believed these laws are created for the educated and informed, ie the rich. The chattering London classes. They’re not fit for purpose.

    If there’s 200 passengers on a typical short-haul aircraft, only a tiny number will claim, and an even smaller number will receive compensation. The most pedantic and those who are informed of their rights will win a pay out and those who have the time and money to take it to Court, ADR or NEBs. How can it be that two passengers, on the same itineraries can have different outcomes? One gets the payment, the other is refused.

    There should be an absolute obligation in law to pay out, punished by significant fines where carriers have lied. Where successful claim has been established, every single eligible passenger should receive the same payment. Any funds unclaimed, give to charity after x years or even, the EU Budget (lol).

    No Member State has chosen to properly enforce EC261. That is shocking. Across the EU it varies with some MS giving their NEB’s more powers than others. ADR is optional. The waiting times for some NEB’s is nearly 2 years (!) and in the vast majority of cases, the decision is non-binding.

    I believe the law was drafted that only a few people would claim and it wouldn’t cost the airlines a lot. That’s why I say its for the educated and informed. They never put any meaningful enforcement behind it, even if that meant using a Directive, or if there was an issue of subsidiarity, no MS put anything in place, even the “EU Loving” ones. In fact I feel like some actively protect their national carriers.

    Because the Commission knows the small claims courts vary hugely across the EU, it’s even more a disgrace they haven’t addressed the ability to execute the right.

    The conundrum (which will also be the case in the UK) to make it a proper universal payout system, the compensation levels will go down because the total amounts paid-out will go up. Hugely. It’s a bit like what happened with the effect on tariffs with “free” roaming. Tariffs got more expensive.

    • Ken says:

      Some peoples bizarre obsession about the “London chattering classes” blinds them to the fact that The Sun, Mail, Express, BBC, ITV run multiple articles or segments of programs on how to claim every year.
      Who do you think claimed the £60 billion compensation for payment protection mis-selling ? Was that Jeremy and Jemima from Islington as well.
      Barely anyone getting a LLC flight will be unaware of at least there is a chance of compo.

      The legislation may be poorly drafted but the airlines resent it and willingly ignored both the letter and spirit of it until forced.

      • meta says:

        EC261 is designed well, it is because the airlines choose not to inform the passengers of their rights that it has become difficult for people to claim or they don’t even know about it! It is enshrined in EC261 that the airlines must inform the passengers of their full rights. Airlines never do it or if they do they bury it in very very small print.

        I had a signficiant delay 5-6 years ago with BA and they just shrugged it off when I told them that they should inform the passengers of their rights. I told everyone around me that what they should do to claim.

  • TM says:

    Is BA considered an EU carrier as their ultimate HQ is in Spain? Or a UK carrier?

    • John says:


    • pauldb says:

      BA operates as a UK carrier. Voting control (but not economic ownership) is split between IAG and a trust that is obliged to vote its BA shares in the interests of IAG’s UK shareholders.

    • Richie says:

      Reg 261 details ‘operating air carrier’ IAG is not an air carrier, it’s just a holding company.

    • Rui N. says:

      What matters is the AOC, which is UK. The owner of the airline is Spanish (IAG), but the AOC is British.

    • TM says:

      Thanks – very helpful

  • Tim says:

    Three comments

    If the EU can have a system which arguably is illegal under Montreal then so can the UK

    Enforcement is the key. The CAA needs to get teeth. A major weakness of the EU scheme is that the law is unclear allowing wiggle room

    Determining the cause of the delay is a massive red herring. A scheme should not be about being fair to the airlines, it should be about incentivising them to run on time. The railways have moved to a system where they pay out regardless of the cause of delay. If a delay is caused by a mechanical fault that may not be the airlines fault but forcing them to pay out incentivises them to invest in more reliable aircraft.

  • BJ says:

    Hardly worth the effort of the informative article or the well-considered comments, it should be as clear as night and day that nothing good will come from this.

    • Paul says:

      I agree, even Ron’s example is part of the softening up process ( inadvertently perhaps) to prepare us for weaker protection.

  • Paul says:

    Given the appalling state of public transport in the U.K. I’d welcome strengthening domestic protections. BA in particular have a near monopoly on the major trunk routes and these are cancelled at the drop of hat whenever there is operational disruption.
    Otherwise I’d like EU262 left alone, it’s not broken as a law but it needs better enforcement. Automatic payments to original form of payment within 7 days would be my suggestion with a legal requirement that this is passed to the bill payer by agents and intermediaries

    • Lady London says:

      Er…EU261 states refunds should be paid within 7 days, already.

      In Covid most of us thought 30 days more reasonable. But the airlines have been taking the p1$$ even on that

  • Dave says:

    It will just incentive airlines to increase overselling, bumping cheapest tickets to the next flight. Will duty of care costs still remain or ticket refund only.

  • Patrick C says:

    Firstly, without the EU there would be no such law at all. No other continent has done anything like it.
    Secondly, don’t forget that the EU Commission does not make the laws. I know with all the BS that is distributed by the Brexit newspapers that most people are unaware, but pretty much all pieces of EU legislation are done by compromise and approval of ALL member states’ governments + the EU parlamient. (called the trilogues)
    Thirdly, actual implementation of regulations has been and remains largely a national competency.

    • Rui N. says:

      Yep, the Commission only proposes laws, but when they are enacted they are usually quite different from what the Commission proposed. Sometimes the Commission even tries to pull back the laws from consideration, arguing that the member states or the parliament changed it too much and it is no longer fit for purpose.

    • meta says:

      This is because there is no other similar union that brings together 27 countries enacting laws together in the world.

      There is DOT in the US though that offers some consumer protection (refund for cancellation, denied boarding, tarmac delays) and can fine the airlines.

    • John says:

      Israel has a similar regulation, though not sure if it was just modelled on the EU one or if it was proposed independently

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