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Aviation

European Court of Justice: Operating carrier means operational carrier

30 July 2018

On 4 July 2018, the Court of Justice of the European Union (the CJEU) handed down its ruling in the case regarding Wolfgang Wirth a.o. Vs. Thomson Airways Ltd. (C-532/17). The court ruling verifies what we already know; that the lessor of a wet lease is not the operating carrier and that the carrier stated on the booking / boarding card is not necessarily the actual operating carrier.

The Facts of the Wirth vs. Thomson Airways case

The case regarded a claim for compensation pursuant to Regulation 261. Mr. Wirth was on a trip from Hamburg in Germany to Cancún in Mexico. He arrived more than three hours late.

In this particular case, TUIFly GmbH wet leased an aircraft from Thomson Airways. A “wet lease” means the chartering of both an aircraft and a crew. TUIFly (the lessee) was responsible for the overall operational aspects of the flight including ground handling, passenger handling, cargo handling, security, on-board services, applications for slots, marketing, authorizations etc.

The passengers filed a claim for compensation against Thomson Airways as the booking information stated Thomson Airways as the operating carrier. Thomson Airways denied the claim and argued that they were not the operating carrier, as this concept is defined in Regulation 261.

Regulation 261 solely applies to operating carriers

Pursuant to article 3(3), the operating carrier is always responsible for the obligations under the Regulation and not, for example, another air carrier which may have sold the ticket. The notion of the air carrier is presented in recital 7.

The court found that according to Article 2(b) of Regulation No 261/2004, the concept of an ‘operating air carrier’ must be understood as referring to an ‘air carrier that performs or intends to perform a flight under a contract with a passenger or on behalf of another person, legal or natural, having a contract with that passenger’.

Thus, there are two cumulative steps; 1) an air carrier must be regarded as an “operating air carrier”, meaning that the air carrier must actually operate the flight and 2) there has to be a contract with a passenger.

The court then rendered that the air carrier regarded as operating is the air carrier which decides to perform a particular flight, thus executes the contract of air carriage, and fixes the itinerary – summarized; the air carrier who bears the full responsibility for performing the flight – including cancellations or delays – is considered as the operating carrier.

In the case at hand, Thomson Airways only provided the aircraft and crew, while TUIFly handled all other operational aspects of the flight, including planning of the flights. The court therefore found that Thomson Airways was not the operating carrier, regardless that the passenger had been informed that the flight was operated by Thomson Airways.

The “operating carrier” is not the actual operating carrier

The case confirms that the operating carrier is the carrier that does the overall planning and not the carrier that merely provides aircraft and crew to another air carrier on a wet lease-basis. Further, the case confirms that the carrier stated on the booking is not necessarily the actual operating carrier. When handling claims, air carriers must therefore look into whether the flight was carried out on the basis of a wet lease arrangement.

Wet lease: Who is ultimately liable?

When making wet lease arrangements, air carriers must continue to be aware of this distinction. The terms of a wet lease agreement should have provisions that addresses who is ultimately liable, where a delay is due to both problems with the air craft / crew as well as the operational planning. Existing standard wet lease arrangements should therefore be checked and perhaps adjusted.

[Judgment of 4 July 2018, Wolfgang Wirth a.o., C-532/17, the Court of Justice of the European Union]

The Facts of the Wirth vs. Thomson Airways case

The case regarded a claim for compensation pursuant to Regulation 261. Mr. Wirth was on a trip from Hamburg in Germany to Cancún in Mexico. He arrived more than three hours late.

In this particular case, TUIFly GmbH wet leased an aircraft from Thomson Airways. A “wet lease” means the chartering of both an aircraft and a crew. TUIFly (the lessee) was responsible for the overall operational aspects of the flight including ground handling, passenger handling, cargo handling, security, on-board services, applications for slots, marketing, authorizations etc.

The passengers filed a claim for compensation against Thomson Airways as the booking information stated Thomson Airways as the operating carrier. Thomson Airways denied the claim and argued that they were not the operating carrier, as this concept is defined in Regulation 261.

Regulation 261 solely applies to operating carriers

Pursuant to article 3(3), the operating carrier is always responsible for the obligations under the Regulation and not, for example, another air carrier which may have sold the ticket. The notion of the air carrier is presented in recital 7.

The court found that according to Article 2(b) of Regulation No 261/2004, the concept of an ‘operating air carrier’ must be understood as referring to an ‘air carrier that performs or intends to perform a flight under a contract with a passenger or on behalf of another person, legal or natural, having a contract with that passenger’.

Thus, there are two cumulative steps; 1) an air carrier must be regarded as an “operating air carrier”, meaning that the air carrier must actually operate the flight and 2) there has to be a contract with a passenger.

The court then rendered that the air carrier regarded as operating is the air carrier which decides to perform a particular flight, thus executes the contract of air carriage, and fixes the itinerary – summarized; the air carrier who bears the full responsibility for performing the flight – including cancellations or delays – is considered as the operating carrier.

In the case at hand, Thomson Airways only provided the aircraft and crew, while TUIFly handled all other operational aspects of the flight, including planning of the flights. The court therefore found that Thomson Airways was not the operating carrier, regardless that the passenger had been informed that the flight was operated by Thomson Airways.

The “operating carrier” is not the actual operating carrier

The case confirms that the operating carrier is the carrier that does the overall planning and not the carrier that merely provides aircraft and crew to another air carrier on a wet lease-basis. Further, the case confirms that the carrier stated on the booking is not necessarily the actual operating carrier. When handling claims, air carriers must therefore look into whether the flight was carried out on the basis of a wet lease arrangement.

Wet lease: Who is ultimately liable?

When making wet lease arrangements, air carriers must continue to be aware of this distinction. The terms of a wet lease agreement should have provisions that addresses who is ultimately liable, where a delay is due to both problems with the air craft / crew as well as the operational planning. Existing standard wet lease arrangements should therefore be checked and perhaps adjusted.

[Judgment of 4 July 2018, Wolfgang Wirth a.o., C-532/17, the Court of Justice of the European Union]

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