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Aviation

The CJEU rules: No right to reimbursement of the flight ticket from the air carrier on package travels

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Legal news
calendar 9 September 2019
globus Denmark, Sweden, Norway

The Directive on package travel and Regulation 261 are relatives in a way, but there seems to be some trouble in the family. The relation between the two sets of rules gives rise to a larger number of cases as the number of passengers, who purchase their flight ticket as part of a package travel, is increasing.  

Recently, such a case was presented for the CJEU. The Court established that a passenger has the right to hold his tour organizer liable for reimbursement of the cost of the air ticket according to The Directive on package travel. On the contrary, the passenger cannot claim reimbursement of the cost of the ticket from the operating air carrier pursuant to Regulation 261.

In the present matter, a group of passengers had bought a package travel through a travel agency from the Netherlands to Korfu in Greece. The travel agency had obtained airline tickets through a charter agency, which had chartered several seats from Aegean Airlines. Meanwhile, Aegean decided to cancel the planned flights to Korfu, as the travel agency was no longer able to pay the price which the companies had agreed on. A few days before the agreed departure date, the travel agency therefore informed the passengers that the package tour had been canceled. Soon after, the travel agency was declared insolvent. The passengers claimed that according to Regulation 261, Aegean Airlines was obliged to compensate them for the cancellation of the flight and to reimburse the price of the related tickets.

Rechtbank Noord-Nederland (District Court, Noord-Nederland, Netherlands) awarded the passengers compensation from Aegean on account of the cancellation of the flight pursuant to Regulation 261. However, the Court did not rule on the question of reimbursement of the flight tickets. In that regard, Aegean argued that since the tickets were purchased as part of a package tour, the operating air carrier was not obliged to reimburse the cost of the tickets.

Consequently, it was up to the CJEU to decide whether a passenger who has the right to hold his tour organizer liable for reimbursement of the cost of his flight ticket under The Directive on package travel, also has the right to claim reimbursement from the air carrier on the basis of Regulation 261. Furthermore, it was requested what the passenger’s rights are when the tour organizer has been declared insolvent and has not taken any safeguard measures to guarantee the reimbursement.

No double securing of the passenger

The CJEU established that passengers who, under The Directive on package travel, have the right to hold the tour organizer liable for reimbursement of the cost of the air ticket, are not likewise entitled to claim reimbursement from the operating air carrier pursuant to Regulation 261. This also applies, when the tour organizer has been declared insolvent, even though it will prevent the passenger from getting the cost of the air ticket reimbursed.

The Court reinforced that the right to reimbursement of the cost of the flight ticket, pursuant to Regulation 261 and The Directive on package travel, are not cumulative as the passengers concerned would receive unjustified overcompensation. Thus, the operating air carrier does not assume part of the liability of the tour organizer towards its clients.

IUNO’s opinion

The CJEU ruling is good news for the air carriers, but less good news for package travel passengers. When a package travel is cancelled, the passenger will still have the right to claim compensation from the operating air carrier according to Regulation 261. However, the claim for reimbursement of the air ticket must be directed against the tour organizer. This also applies when the tour organizer has been declared bankrupt. Yet, The Travel Guarantee Fund will possibly cover the passenger’s expenses if the travel provider is insolvent. This only requires that the provider is registered in the Fund and that the passenger has paid for the package travel concerned.

Recently, such a case was presented for the CJEU. The Court established that a passenger has the right to hold his tour organizer liable for reimbursement of the cost of the air ticket according to The Directive on package travel. On the contrary, the passenger cannot claim reimbursement of the cost of the ticket from the operating air carrier pursuant to Regulation 261.

In the present matter, a group of passengers had bought a package travel through a travel agency from the Netherlands to Korfu in Greece. The travel agency had obtained airline tickets through a charter agency, which had chartered several seats from Aegean Airlines. Meanwhile, Aegean decided to cancel the planned flights to Korfu, as the travel agency was no longer able to pay the price which the companies had agreed on. A few days before the agreed departure date, the travel agency therefore informed the passengers that the package tour had been canceled. Soon after, the travel agency was declared insolvent. The passengers claimed that according to Regulation 261, Aegean Airlines was obliged to compensate them for the cancellation of the flight and to reimburse the price of the related tickets.

Rechtbank Noord-Nederland (District Court, Noord-Nederland, Netherlands) awarded the passengers compensation from Aegean on account of the cancellation of the flight pursuant to Regulation 261. However, the Court did not rule on the question of reimbursement of the flight tickets. In that regard, Aegean argued that since the tickets were purchased as part of a package tour, the operating air carrier was not obliged to reimburse the cost of the tickets.

Consequently, it was up to the CJEU to decide whether a passenger who has the right to hold his tour organizer liable for reimbursement of the cost of his flight ticket under The Directive on package travel, also has the right to claim reimbursement from the air carrier on the basis of Regulation 261. Furthermore, it was requested what the passenger’s rights are when the tour organizer has been declared insolvent and has not taken any safeguard measures to guarantee the reimbursement.

No double securing of the passenger

The CJEU established that passengers who, under The Directive on package travel, have the right to hold the tour organizer liable for reimbursement of the cost of the air ticket, are not likewise entitled to claim reimbursement from the operating air carrier pursuant to Regulation 261. This also applies, when the tour organizer has been declared insolvent, even though it will prevent the passenger from getting the cost of the air ticket reimbursed.

The Court reinforced that the right to reimbursement of the cost of the flight ticket, pursuant to Regulation 261 and The Directive on package travel, are not cumulative as the passengers concerned would receive unjustified overcompensation. Thus, the operating air carrier does not assume part of the liability of the tour organizer towards its clients.

IUNO’s opinion

The CJEU ruling is good news for the air carriers, but less good news for package travel passengers. When a package travel is cancelled, the passenger will still have the right to claim compensation from the operating air carrier according to Regulation 261. However, the claim for reimbursement of the air ticket must be directed against the tour organizer. This also applies when the tour organizer has been declared bankrupt. Yet, The Travel Guarantee Fund will possibly cover the passenger’s expenses if the travel provider is insolvent. This only requires that the provider is registered in the Fund and that the passenger has paid for the package travel concerned.

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