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.

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.)

Accessibility

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.

Conclusion

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.

Category

General

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

Tom says:

1 Feb1 February 08:39

The thing with compensation culture is how many people actually suffer as a result of delayed flights? I remember getting around £550 from BA for a 7 hour flight delay to Abu Dhabi. It was an electrical fault in the cockpit so hardly negligent behaviour. For me that was a minor inconvenience and a few hours less on the beach in my fancy hotel – the point is they got me there eventually. I suspect a few people do genuinely suffer from these delays (missed connections, business meetings etc) but whatever happened to just dealing with bad things in life? Personally I think it should be an insurance model and you pay extra for the right to claim compensation if you’re at risk of genuinely suffering as a result of cancellations/delays etc. Who pays you compensation when you get stuck on the M25 for 10 hours because someone has written off their car? There are loads of other examples in life where you have to wait patiently and just deal with it like an adult without demanding the need for financial recourse.
- Rob says:
  
  1 Feb1 February 09:08
  
  The reason EC261 came in is that airlines were taking the piss. Flight only half full? Cancel it with no compensation and move everyone to the half full flight eight hours later etc. The industry brought it on itself.
  - Niall says:
    
    1 Feb1 February 09:25
    
    If what is in place is a sliding scale which goes to max a full refund, won’t this problem still happen? If a flight isn’t worth operating, bin it and refund? At which point fares are much higher.
    
    I’ve never had to claim for a U.K. domestic flight despite taking dozens a year (I have been flown to the wrong airport due to weather and sat on a plane at Heathrow without aircon for 2.5 hours). They are generally quick enough to respond to any problems though.
    
    When I do fly domestically though it is generally for work and generally more important to me for the flight not to be delayed or meetings may be missed. It’s probably similarly important for people going to London for onward flights.
    
    Airlines seem to operate now with reasonable domestic fares despite the high compensation, so it seems like it can be worked into the flight price without a major impact. And in the background it will discourage those airlines taking the piss. So why change for domestic flights?
  - Tom says:
    
    1 Feb1 February 10:02
    
    You see that makes much more sense to me!
  - Bagoly says:
    
    1 Feb1 February 17:32
    
    The other aspect I remember being mentioned at the time was arilines being too ambitious regarding scheduling given maintenance and the fact that things happen.
    
    E.g. “We can save GBP5k by doing this bit of maintenance at the same time, but there is a 50% chance it will over-run by 3 hours”.
    “That exposes us to EUR40k payouts on several flights the next day – don’t risk it”.
    
    or “We can add an extra rotation each day which will squeeze the last landing in just before the official curfew, but given ATC delays, about 40% of the time that last flight will actually land two hours later.”
    
    Look at the USA for what happens without this protection.
    - Bagoly says:
      
      1 Feb1 February 17:46
      
      or indeed save money by delaying some bit of maintenance (which is why it makes sense for technical faults to be not a get-out-of-paying excuse)
- ken says:
  
  1 Feb1 February 09:17
  
  its not ‘compensation culture’, its just enforcing what are your statuatory rights.
  
  It may be a crude mechanism, its arguably too generous for some LCC flights but whose to know.
  
  You but you can guarantee that if you had to claim for actual costs incurred in any delay, then airlines would nickel & dime every single item.
  Meal while waiting at airport ? Why did you spend £40 when you could have eaten some sandwiches from boots.
  Taxi at the other end ? Why didn’t you get public transport.
  
  It does incentivise airlines to minimise delays, and avoid cancellations for commercial reasons.
  
  An insurance model is simply a terrible idea – the cost of all the EU261 claims is built into the current cost of a ticket anyway (or the airlines profits, whichever you prefer).
  - Bagoly says:
    
    1 Feb1 February 17:43
    
    Exactly – think of it as Liquidated Damages.
    I expect that a significant proportion of the short-haul flights where EC261 is payable, and claimed, are for the last flights of the day, where smaller delays during the day add up to more than two hours by the end.
    If public transport has not actually ceased, it has often become much less frequent,, with onward connection problems, (or only ‘buses are available rather than trains) thus costing time, extra walking (with luggage) etc.
- VINZ says:
  
  1 Feb1 February 09:35
  
  I should adopt the same philosophy tomorrow morning. I’m going to be 5 hours late and my boss will have to deal with “bad things in life”. I of course expect to be paid in full at the end of the day.
- happeemonkee says:
  
  1 Feb1 February 09:42
  
  “I remember getting around £550 from BA for a 7 hour flight delay to Abu Dhabi”
  
  To get that money you would have had to make a claim. Why did you claim if it was a minor inconvenience?
  - Tom says:
    
    1 Feb1 February 10:08
    
    How do you assign a monetary value on varying levels of inconvenience? It was still 7 hours of my holiday lost. Why wouldn’t I claim the compensation on offer? I’m willing to bet most of the general public would happily sit in an airport for 7 hours twiddling their thumbs if they got £550 or the cost of their long haul flight covered. It was a ridiculous sum of money to be frank. £50-£100 seems slightly more sane but I don’t make the rules.
- David says:
  
  1 Feb1 February 10:40
  
  “”I suspect a few people do genuinely suffer from these delays (missed connections, business meetings etc)”
  
  Tom, I don’t agree that it’s only if you miss a connection or a meeting that you “genuinely suffer”.
  
  Pre-covid I travelled Edinburgh-Gatwick every week. Delays on the outbound were rare, on the return less so Getting home on time meant I got to sit down with my wife, have either a beer or some tea & toast, then go to bed at a reasonable time and get up happy the next day; a three hour delay meant getting home well after midnight, trying not to wake her as I got into bed (successful probably less than half the time), then being tired all the following day. So yes, I feel that that justifies compensation.
  - Rob says:
    
    1 Feb1 February 10:46
    
    It’s not about paying the passenger a fair sum to cover them for the inconvience. It’s about making it expensive enough so that the airlines don’t go back to their old habits of cancelling flights with no notice simply because the aircraft isn’t full enough for their liking.
    
    It’s no different to, for example, the woman who got £2m from BNP Paribas yesterday because someone left a witches hat on her desk (amongst other things). It’s not done because she ‘deserved’ £2m. It was done because companies who allow male employees to put witches hats on the desks of female employees will sit up and take notice when BNP Paribas is hit for £2m.
    - ankomonkey says:
      
      1 Feb1 February 11:16
      
      Some of us who feel aggrieved with Creation’s treatment may enjoy hearing that BNP Paribas has been hit with a hefty fine…
    - Tom says:
      
      1 Feb1 February 13:22
      
      Made me laugh this Rob. It’s a valid point and people (myself included) do seem to miss this and focus entirely on whatever the award is.
    - Andrew. says:
      
      1 Feb1 February 23:05
      
      The world has changed a lot.
      
      I can recall the days when it was Lloyds/HBOS policy to humiliate staff by placing vegetables on the desks of staff who were underperforming.
AJA says:

1 Feb1 February 08:49

The discussion over on Ft on this is also interesting. The reason i think this consultation is to only change domestic flights is because flights into and out of the EU are by default handled by EC261.

I also understood that following the UK’s departure from the EU EC261 was adopted into UK law as UK261. Therefore if the intention down the line is to weaken UK passenger rights for flights not destined for the EU then this is a bad move.

I wonder how much compensation has been paid out under EC261 for UK domestic flight delays? I could be wrong but I think the majority has been for international departures and arrivals so in practice would there be a benefit to consumers from this change. The idea that you get your money back is good but that’s hardly compensating you for the inconvenience especially if the underlying fare is only £2.

On that point will the amount paid include carrier imposed surcharges ie the actual amount you paid in total or is it the base fare? If the latter I can foresee BA having very cheap base fares topped up with surcharges. They are notorious for doing this already.

‘re the point about reward bookings how many domestic flights are reward flights? I think most domestic reward bookings are part of a long haul redemption so would the new domestic policy apply or EC/UK261 if the domestic delay impacted the international flight?

Same question applies to cash bookings, if you book EDI-LHR-JFK on one booking and experience a delay on the EDI departure which affects the JFK flight which compensation scheme applies?

As for how it works in practice the reality is that only a few people ever actually assert their rights. Even so the amounts paid out are quite large. If this new scheme results in lower amounts being paid overall then I think the airlines will be happy, consumers not so much.
- meta says:
  
  1 Feb1 February 09:20
  
  You’re missing the point. It was only adopted into UK law temporarily, UK can change it in parliament at any point. Also bear in mind that any new precedents that arise at ECJ for EC261 are not applicable to flights departing UK. For example, we have a recent one where if the flight is brought forward by 60 minutes or more, it means it is cancelled.
  
  Even now, UK airlines are considered as third-country airlines, it is only because UK261 is still in place that we have similar protections. Once UK261 is repelled, gone are all protections and then EC261, not UK261 will apply if you fly from EU to UK.
  - AJA says:
    
    1 Feb1 February 09:57
    
    From an EU perspective of course UK airlines are considered third country. Personally I think this proposal is a bad move but as long as it doesn’t lead to weakening of UK261 in respect of international departures and arrivals then I might accept it. Trouble is I can see that it might well lead to that.
- Stu_N says:
  
  1 Feb1 February 09:29
  
  “‘re the point about reward bookings how many domestic flights are reward flights? I think most domestic reward bookings are part of a long haul redemption so would the new domestic policy apply or EC/UK261 if the domestic delay impacted the international flight?”
  
  I think a high proportion of reward flights will be domestics.
  
  Most people who collect Avios won’t have sufficient cash or Avios for long-haul business redemptions (remember this site is wildly unrepresentative of total population of active Avios collectors and comments/ forum even more so).
  
  Domestic return in economy for 2 is about 18k Avios and £70 vs long haul business even with 2-4-1 at 100k+ and £1300 which is simply unattainable for many people.
  
  Also domestic RFS are excellent value for those in the know, you can easily clear 1.5p and often 2p per Avios, and if you are chasing or maintaining status the lost TPs are usually minimal.
  - Niall says:
    
    1 Feb1 February 09:41
    
    I agree with Stu_N.
    
    I collect a lot of Avios and use for long haul business etc. But I have also used heavily for domestic flights in the past. The availability of last minute flights (especially in the past with Gold status availability) at a fixed avios price has meant it’s definitely worth it vs very variable cash prices.
NFH says:

1 Feb1 February 09:19

I don’t see why the compensation should be related to the amount originally paid for the fare. The inconvenience suffered by the passenger is the same, irrespective of the fare paid. The compensation is intended to be for inconvenience, not a refund of the fare paid.
- dougzz99 says:
  
  1 Feb1 February 10:45
  
  Exactly. You book other things, make other arrangements, you rely on that flight at that time, whether you paid £9.99 or £999 the inconvenience remains.
sayling says:

1 Feb1 February 09:34

I hope those with strong concerns will do more than just mouth off in comments to the blog and actually respond to the consultation.

If the proposals are additions to EC261 and applicable to UK domestic flights, I don’t think it’s a bad thing. It’s also an opportunity to put in law something relating to points/ awards bookings, either establishing a monetary value or defining a formula for calculating their worth, along with making the total cost the subject of the calculation, rather than just base fare/taxes.
- meta says:
  
  1 Feb1 February 11:30
  
  It doesn’t matter anyway, the government has already decided and this is just a box ticking exercise to say that they followed the democratic process. Same thing happened on a local level with rubbish consultation collections in two boroughs that I lived. Both times they chose the options the least favoured by citizens.
  
  I intend to submit my comments, but don’t expect anything.
VINZ says:

1 Feb1 February 09:37

EC261 will be scrapped because this government and those before it don’t care about the public. This is the reality of Brexit – roaming charges, visas, no delay compensation etc and there is more to come I’m sure.
- happeemonkee says:
  
  1 Feb1 February 09:44
  
  Spot on!
- blenz101 says:
  
  1 Feb1 February 10:48
  
  I think we can safely assume that EU261 will be watered down in the UK to the benefit of the airlines. It will be hailed as a boost to the competitiveness of the UK aviation industry by removing punitive EU imposed compensation requirements, creating jobs and ushering in lower fares for passengers.
Simon says:

1 Feb1 February 10:09

Thanks Rob. Hope one of the weekend travel sections gives you some space to run this for a wider audience.
Pat says:

1 Feb1 February 10:14

What do you mean by 99% of people wont benefit from the new rules? Have you been on a easyjet or ryanair domestic?
- Rob says:
  
  1 Feb1 February 10:37
  
  What % of people who fly from the UK are on a domestic flight? 1%? Hence 99% won’t benefit.
  
  (Actually, having checked the numbers, it is about 10%. 90% therefore won’t benefit as they are flying outside the UK.)
Simone says:

1 Feb1 February 10:32

If a contractor comes to your house and smashes a main water pipe while doing a £100 paint job you surely want to have your inconvenience/damage paid for and not have it related/capped to the original job price.

I see this as reducing consumer rights for all, except who pays expensive tickets.
- blenz101 says:
  
  1 Feb1 February 11:30
  
  That analogy just doesn’t work. The current EU261 compensation is designed to be punitive on the airline rather than relate to any actual inconvenience metric suffered by the passenger.
  
  What does the number of km’s flown have to do with the level of inconvenience suffered. Would the length of the trip forfeited not be a better factor in that case?
  
  Delay repay on train services has been mentioned already and is generally seen as a positive by passengers where train companies are penalised for unnecessary delays and customers get a sliding scale of their money back for poor service (often automatically).
  - meta says:
    
    1 Feb1 February 13:03
    
    The number of km is linkef to the number of hours required for compensation. Article 6 states the following:
    
    1. When an operating air carrier reasonably expects a flight to be delayed beyond its scheduled time of departure:
    
    (a) for two hours or more in the case of flights of 1500 kilometres or less; or
    
    (b) for three hours or more in the case of all intra-Community flights of more than 1500 kilometres and of all other flights between 1500 and 3500 kilometres; or
    
    (c) for four hours or more in the case of all flights not falling under (a) or (b),
    
    passengers shall be offered by the operating air carrier:
    
    (i) the assistance specified in Article 9(1)(a) and 9(2);
    
    when the reasonably expected time of departure is at least the day after the time of departure previously announced, the assistance specified in Article 9(1)(b) and 9(1)(c); and
    (iii) when the delay is at least five hours, the assistance specified in Article 8(1)(a).
    
    And Article 7 specifies the amounts per kilometers and also that in case of re-routing and delays of 2,3 or 4 hours means a compensation at reduced level (50%).
    
    So it is definitely linked to the level of inconvenience.
  - Simone says:
    
    1 Feb1 February 15:36
    
    The analogy does work, at least for the case you just described.
    
    Compensation is arbitrarily decided based on wait time and distance travelled, which is not a new concept.
    In the extreme case where the delay on your flight is *infinite* and the airline is not at fault you are entitled a fixed sum for your death, how do you relate that to your inconvenience?
    - Blenz101 says:
      
      1 Feb1 February 17:42
      
      No contractor is mandated by law to offer their customers compensation at a tariff set by the government at a level designed to be putative.
      
      In the painter example the length of the wall determines how much ‘inconvenience’ payment is awarded.
      
      By all means extend duty of care to limit airlines inconveniencing passengers for commercial reasons but the government shouldn’t get to mandate fixed compensation awards.
      - Simone says:
        
        1 Feb1 February 21:22
        
        With any analogy, there’s usually partial similarity. A characteristic your latest iteration lacks.
        
        Anyhow, while humbly accepting that policy is a difficult topic and making new policy work as intended isn’t easy (even with the best of intentions), guessing which suggestions are likely to cause more problems than the ones they solve is easy and requires only to look for absolutes like always, never, no one, everyone.
  - Bagoly says:
    
    1 Feb1 February 18:02
    
    I have always understood that the reason for dependence on the length of flight was the legislators effectively saying “if you are flying long-haul you should build a 4-hour contingency into your plans, but for short-haul you should only be required to build in a 2-hour contingency”.
    It’s reasonable to question why it is (only) two steps, but if it was say, “the longer of 2 hours or half the scheduled flight time” then airlines would pad the flight times even more!

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

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

What is going to change?

What changes are being put up for consultation?

Increase the powers of the Civil Aviation Authority

Improving the rights of individual passengers

Compensation for delays and cancellations

Accessibility

Conclusion

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