Guest Blog: Balancing passenger rights in the era of low-cost flights

Guest Blog: Balancing passenger rights in the era of low-cost flights

Claus Berger from Air Scoop tells us more about balancing passenger rights with low-cost flights.

"If your Bic doesn't work, you don't expect to get a Mont Blanc as compensation"

There's a definite truth to the words of IATA's Director General and CEO Tony Tyler in his comments on the European Commission's proposed revision of EC Regulation 261 regarding passenger rights. While it's generally recognized that the regulation was long due for an overhaul, the proposed changes clearly fall short of industry expectations.  IATA has raised a few objections against several dispositions of the revision that echo throughout the entire airline industry. Yet one point highlights a concern of particular importance for low-cost carriers.

Namely the fact that if a carrier's flight is cancelled and no further seats are available on its own services within 12 hours, the airline must consider re-routing on other airlines of modes of transport. It's fairly evident that this measure has the potential to pose a very real problem for low-cost airlines. Not only are they more exposed to the problem thanks to constant efforts to maximize seat occupancy, but they are the most susceptible to pay dearly for the measure. Because low-cost carriers generally strive to be the lowest cost operator on any given route, re-routing a stranded passenger on another airline or mode of transport is sure to cost more, much more, than the original fare paid.

In the end, low-cost airlines could end up being the victims of their pricing policies as they find themselves obliged to over spend by offering passengers a more expensive product than these were willing to buy in the first place! Faced with that reality there are really only two options for a viable revision of EC261:

– The first would be to give low-cost airlines the opportunity to waive some parts of passenger rights regulations on certain promotional fares. This would allow low-cost airlines to continue offering very low fares on select routes without having to pre-emptively charge for occasionally costly re-routings.  However, such a measure would be extremely hard to frame and ripe for abuses by some operators.

– The other would be to introduce some measure of proportionality to the regulation. For instance, the total cost of the re-routing could be bound with an upper limit equivalent to twice the cost of the initial flight. This could pose problematic with some extremely aggressive promotional prices, however with proper care and planning in the wording of the regulation the problem could be addressed.

The latter is clearly the preferred option. At least it would give some measure of proportionality to passenger rights regulations and show that the European Commission acknowledges the constraint low-cost operators are working with. As the Commission states, it is its role to protect European consumers, but it should also take into account that by protecting low-cost carriers from the excess of such regulation, it ensures these airlines will continue to be able to offer low-fares, ultimately benefitting European consumers.

To find out more about Air Scoop, click here.

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