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Urteil zu ABB

Ruling on the GCC of a Hungarian Airline

The Austrian Supreme Court recently issued a new ruling (4 Ob 222/22h) on the General Conditions of Carriage (GCC) of a Hungarian airline, declaring numerous clauses therein as unlawful. This decision is the latest in a series of judgments against air carriers and their GCC.

The proceedings were initiated by the “Bundeskammer für Arbeiter und Angestellte”, an association authorized to litigate under the Austrian Consumer Protection Act and aimed to prohibit the airline from using certain clauses in their GCC. In its decision, spanning over 100 pages, the Austrian Supreme Court addressed numerous clauses, providing significant guidance for all air carriers operating in Austria.

Since authorized associations, especially the “Verein für Konsumenteninformation” (VKI) and the Bundeskammer für Arbeiter und Angestellte, can (and regularly do) file such lawsuits against airlines operating in Austria, it is advisable for air carriers to use this new ruling on GCC as an opportunity to review their own GCC. More detailed information on the standard procedures of associations authorized to file such lawsuits, the system of reviewing GCC in Austria, and the criteria applied can be found in our article “General Conditions of Carriage in Austria“.

The clauses whose use has now been prohibited by the Austrian Supreme Court include:

  • Liability exclusion for fragile luggage
  • Choice of law clause in favor of Hungarian law
  • The possibility of rebooking to an alternative means of transportation
  • Restriction of rights under Regulation (EC) 261/2004 (“Air Passenger Rights Regulation”)
  • Submission of compensation claims exclusively via the airline’s website

Our experienced Aviation Team is happy to answer your questions about the use of General Conditions of Carriage in Austria, review your GCC to reduce the risk of legal proceedings, and represent you in court.

The necessity to suffer a loss of time to receive compensation

The necessity to suffer a loss of time to receive compensation

In its recent rulings on cases C-474/22 and C-54/23, the European Court of Justice (ECJ) clarified that passengers are not entitled to a compensation payment in cases when their booked flight is delayed by more than 3 hours if they did not actually suffer a loss of time themselves, especially if they did not present themselves for check-in.

Traditionally, passengers whose flights arrive over three hours after the scheduled arrival time have been entitled to the same compensation passengers of cancelled flights receive. This principle was established in the landmark Sturgeon ruling (C-402/07 and C-432/07). However, the recent ECJ rulings demonstrate that there are still differences between flights that are cancelled and those that are significantly delayed.

The cases in question both involved flights from Düsseldorf (Germany) to Palma de Mallorca (Spain) where the operating carriers announced significant delays. In case C-474/22, upon learning of the delay, the passenger chose not to board the flight and later assigned his rights to flightright, which then sued the carrier for compensation. In case C-54/23, another passenger opted to book an alternative flight, resulting in an arrival delay of less than three hours.

The ECJ ruled that in both instances, the passengers are not eligible for compensation. This decision was based on Article 3 of Regulation 261/2004, which sets forth that the regulation only applies if passengers – except in cases of cancellations – present themselves for check-in in a timely manner. The passengers argued that this criterion should not apply in situations where the operating carrier had already announced that the flight would be delayed more than 3 hours, since such significant delays must be treated like cancellations.

However, the ECJ did not follow this reasoning ant stated that its landmark decision in the Sturgeon case was based on the concept that passengers enduring a delay of three hours or more suffer an irreversible loss of time and, consequently, a level of inconvenience comparable to that of passengers on cancelled flights. According to the ECJ’s rationale, compensation is a redress for this loss of time. Therefore, since the passengers in the recent cases either did not board their flights or managed to reduce their delay through alternative bookings, they did not experience the same loss of time and are, thus, not entitled to compensation.

However, it’s important to note that these passengers might still have other rights under Regulation 261/2004 or applicable law, such as ticket reimbursement or damages equivalent to the costs of the alternative flights they booked.

Don´t hesitate to contact our Aviation Team to learn more about passenger claims in Austria.

Denied Boardings

Recent court practice on denied boardings

On 26 October 2023, the European Court of Justice (ECJ) issued a new ruling on the interpretation of Articles 4 and 5 of Regulation 261/2004 in connection with denied boardings (case C-238/22).

In this ruling, the ECJ determined that an air carrier that informs a passenger in advance that, against the passenger´s will, they will be denied boarding for a flight with a confirmed reservation, must compensate that passenger, even if the passenger does not present themselves for boarding.

In the case at hand, the air carrier denied transporting the passenger on the inbound flight because they had not taken the outbound flight, a common practice based on so-called “No-Show Clauses”.[1] The ECJ interpreted this application of a No-Show-Clause as a denied boarding, disregarding the interpretative guidelines on Regulation 261/2004 published by the EU Commission on 10 June 2016.

Furthermore, the ECJ ruled that Article 5(1)(c)(i) of Regulation 261/2004 does not apply to cases in which passengers are denied boarding. Therefore, the air carrier must provide compensation payments (Article 7) to passengers, even if they informed the passengers at least two weeks in advance that they will refuse to carry them.

On 11 July 2023, the Austrian Regional Court Korneuburg faced a case (22 R 120/23m) with the following circumstances:

An air carrier was confronted with a shortage of security staff at its homebase (LHR) in the aftermath of the COVID-19 pandemic, resulting in difficulties in handling a sudden increase in passenger numbers during the travel boom following the end of COVID-related travel restrictions. As a response, the air carrier decided to “cancel” several flights due to the challenges in performing the required security checks on the passengers.

The “canceled” flights were, in fact, performed by the air carrier, using the planned time slots, flight numbers and destinations, but with cargo only – without passengers on board.

The Regional Court Korneuburg, serving as the court of appeal, determined that such cases do not constitute a cancellation within the meaning of Article 5 of Regulation 261/2004 but rather constitute denied boardings within the meaning of Article 4.

Additionally, the court emphasized that, in cases of denied boardings, it is irrelevant if the reasons for such denied boardings could constitute extraordinary circumstances within the meaning of Article 5. According to the applicable Article 4, air carriers are always obligated to immediately compensate passengers in accordance with Article 7 if they are denied boarding against their will.

According to Article 2(j) “denied boarding” means a refusal to carry passengers on a flight, except where there are reasonable grounds to deny them boarding, such as reasons of health, safety or security, or inadequate travel documentation. The court concluded (citing ECJ case C‑321/11, 32) that a reason for a denied boarding must be attributable to the passenger who is being denied boarding.

Since the reason for the air carrier´s decision not to transport passengers on the flight in question was not in any way attributable to the passenger, there were no reasonable grounds within the meaning of Article 2(j) for the denied boarding. Consequently, the Regional Court Korneuburg ruled in the passenger´s favor and ordered the air carrier to pay compensation to the passenger.

Don´t hesitate to contact our Aviation Team to learn more about passenger claims in Austria.

 

[1] The legality of such clauses has already been the subject of numerous court proceedings. For more details about No-Show Clauses, you can explore our article by clicking here.

First aid as accident under the Montreal Convention

First aid as accident under the Montreal Convention

In its ruling C-510/21 on 6 July 2023, the European Court of Justice (ECJ) decided that inadequate first aid on board an aircraft following an accident under the Montreal Convention must be regarded as forming part of that accident.

Facts of the case

The case, once again brought before the ECJ by an Austrian court (this time: the Austrian Supreme Court), involved Austrian Airlines.

On 18 December 2016, the claimant was travelling from Tel Aviv to Vienna on a flight operated by Austrian Airlines. During this flight, hot coffee was spilled on the claimant, resulting in injuries. Subsequently, first aid was administered to the claimant on board the aircraft.

In 2019, after the expiration of the time limit specified in Article 35 of the applicable Montreal Convention, the claimant filed a lawsuit against Austrian Airlines in Vienna. The claimant argued that the inadequate first aid should not be considered an accident under Article 17 of the Montreal Convention, and therefore, his claims for damages should be governed solely by Austrian national law. Consequently, the three-year time limit stipulated by Austrian national law would apply, and his claims would not be time-barred.

Questions raised by the Austrian Supreme Court

(1) Is first aid which is administered on board an aircraft following an accident within the meaning of Article 17(1) of the [Montreal Convention] and which leads to further bodily injury to the passenger which can be distinguished from the actual consequences of the accident to be regarded, together with the triggering event, as a single accident?

(2) If Question 1 is answered in the negative: Does Article 29 of [the Montreal Convention] preclude a claim for compensation for damage caused by the administration of first aid where that claim is brought within the limitation period under national law but outside the period for bringing actions which is laid down in Article 35 of [that] convention?

Legal outcome

The ECJ determined that it is not always possible to attribute damage to an isolated event when that damage is the result of a series of interdependent events. Therefore, when intrinsically linked events occur successively, they should be considered as constituting a single accident under the Montreal Convention.

Based on this interpretation, the ECJ concluded that inadequate first aid provided on board an aircraft following an accident under the Montreal Convention must be considered as part of that accident.

Due to this interpretation, it was not necessary for the ECJ to answer the second question. We are still awaiting a ruling in which the ECJ provides a clear opinion on the scope of the Montreal Convention´s exclusivity principle.

Don´t hesitate to contact our Aviation Team to learn more about passenger claims in Austria.

Agency Fees

Agency fees: Austrian court practice on reimbursements

According to Article 8 of Regulation 261/2004, passengers have the right to choose between reimbursement of the full cost of the ticket within 7 days or re-routing to their final destination in cases of denied boardings, cancellations, and significant delays. A question of major practical relevance arises regarding whether the wording “full cost of the ticket” includes the obligation for air carriers to reimburse any agency fees passengers had to pay during the booking process.

In its ruling C-601/17 (Harms/Vueling), the ECJ clarified that the reimbursement should encompass the price of the ticket, including the commission collected by a person acting as intermediary between the air carrier and the passenger (i.e., an agency fee), unless that commission was set without the knowledge of the air carrier.

While this ruling provided important guidance, it also raised a new question: What exactly does “knowledge of the air carrier” mean?

To fully grasp this question, it is crucial to understand how flight tickets are sold. Tickets are primarily sold either directly through the air carrier´s website or by utilizing a travel agency (either physically or online). In order to facilitate ticket sales by travel agencies, the International Air Transport Association (IATA) grants IATA-certified agencies the authority to issue tickets directly for its airline members.

Traditionally, these travel agencies acted as commercial agents for airlines and received service fees from them. However, over the last 20 years, numerous airlines have altered their pricing models to exclude service fee payments to travel agencies and promoted ticket purchases directly through their own websites. Consequently, travel agencies have adapted their business models and now add fees to the ticket prices paid by their customers, the passengers. Nonetheless, the travel agencies retain the right to issue flight tickets directly.

In response to C-601/17, passengers (represented by their lawyers or claim farms) argued that due to the special relationship between air carriers and travel agencies, reimbursements of ticket costs must include agency fees. They contended that air carriers are aware that travel agencies typically charge fees as part of their business model and that this general knowledge is sufficient to establish the air carrier´s obligation to reimburse the agency fees.

While there have been numerous German rulings on this topic, Austrian rulings, especially by the highly relevant Regional Court Korneuburg, have been scarce. Therefore, we are delighted to announce that our Aviation Team recently managed to obtain two favorable rulings from the Regional Court Korneuburg in this matter on behalf of one of our airline clients.

In these rulings (22 R 226/22y and 22 R 37/23f), the Regional Court Korneuburg (upon our appeals against decisions rendered by the District Court Schwechat) stated that the term “knowledge” used by the ECJ refers to the specific knowledge about the agency fee charged by the intermediary. The court emphasized that the different elements of a ticket, such as the price, must be approved by the air carrier, which can only occur with specific knowledge. The potential information rights of air carriers based on IATA agreements or the existence of incentive agreements that do not specify the amount of the agency fee do not alter this conclusion.

Don´t hesitate to contact our Aviation Team to learn more about passenger claims in Austria.

Re-routing obligations

Re-routing Obligations of Airlines in Austria

According to Article 5 (3) of Regulation 261/2004, operating air carriers are not required to make compensation payments to passengers if the cancellation (or substantial delay) was caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken. However, the interpretation of this provision has led to a range of court decisions regarding the criteria of extraordinary circumstances and reasonable measures. This article will focus specifically on the reasonable measure of re-routing a passenger to their final destination, as interpreted by the European Court of Justice (ECJ) and Austrian courts, particularly the Regional Court Korneuburg.

It must be kept in mind that to successfully defend against a claim for compensation payment, the operating air carrier must prove the existence of extraordinary circumstances and that all reasonable measures were taken to prevent the cancellation or substantial delay. Re-routing a passenger is considered one of these measures. Therefore, the air carrier’s re-routing of a passenger is a crucial factor in determining whether a claim for compensation should be rejected.

As a general rule, the air carrier must re-route the passenger in a way that allows them to reach their final destination as soon as possible.

In practice, it is often difficult to prove that the re-routing the air carrier chose was indeed the fastest option and we are regularly confronted with passengers (often represented by claim collecting companies) presenting a list of alternative flights that would have allowed them to reach their final destination sooner than with the flight chosen by the air carrier. In such cases, the air carrier must prove why the passengers have not been rebooked to these flights instead (e.g., because these flights were already fully booked).

The air carrier must consider all available flights and not just those operated by itself, a member of the same alliance or an air carrier, with which it has entered into a contractual relationship.[1] Further, it is obliged to even offer a flight if it assumes that the passenger will not accept it because of inconveniences linked thereto (such as an overnight stay at another airport)[2] and even if the passenger already booked an alternative flight themselves.[3]

The relevant timing of the air carrier´s assessment, to which flight the passenger should be rebooked, is when it is predictable that the passenger cannot be transported on the original flight, e.g., because this flight will be cancelled, or a delay of the first flight leg leads to the passenger missing his/her second flight leg.[4] To allow the court to assess this, the temporal components must be included in the air carrier´s defence.[5]

The air carrier must offer re-routing in “immediate temporal connection” with the announcement of the cancellation.[6] However, the air carrier is not obliged to re-route a passenger to a flight if such re-routing constituted an “intolerable sacrifice” for that air carrier in the light of the capacities of its undertaking at the relevant time.[7] The Regional Court for Commercial Matters Vienna (Handelsgericht Wien) once decided that for a low-cost carrier, re‑routing a passenger to a different carrier that typically charges ticket fares three times higher than the low-cost carrier´s ticket fares would constitute such an intolerable sacrifice.[8] It is unclear whether other courts, in particular the Regional Court Korneuburg, will have the same understanding.

If the air carrier fails to re-route the passenger in a way that allows them to reach their final destination as soon as possible, it may not only be obliged to pay a compensation payment (even if there have been extraordinary circumstances), but also to bear the costs of the passenger´s self-organised rebooking.[9]

The overview of criteria in connection with an air carrier´s obligation to re-route passengers given in this article aims to inform about relevant aspects to consider when assessing such cases. However, it also highlights the variety of (national) court rulings that must be examined when dealing with passenger claims. Therefore, it is essential to work with specialists and closely assess cases to have clarity about the chances of succeeding in court proceedings before investing substantial resources in them.

Don´t hesitate to contact our Aviation Team to learn more about passenger claims in Austria.

 

This article was also published on Lexology and can be accessed by clicking here.

 

[1] ECJ, C-74/19; Regional Court Korneuburg, 21.09.2021, 22 R 263/21p; RKO0000032.

[2] Regional Court Korneuburg, 22.09.2022, 22 R 176/22w; RKO0000043.

[3] Regional Court Korneuburg, 21.06.2022, 22 R 18/22k; RKO0000041.

[4] Regional Court Korneuburg, 23.07.2020, 22 R 124/20w; RKO0000015.

[5] Regional Court Korneuburg, 03.09.2020, 22 R 152/20p; RKO0000013.

[6] Regional Court Korneuburg, 21.06.2022, 22 R 18/22k; RKO0000041.

[7] ECJ, C-74/19; Regional Court Korneuburg, 21.09.2021, 22 R 263/21p; RKO0000032.

[8] Regional Court for Commercial Matters Vienna, 28.07.2022, 50 R 28/22g; RWH0000078.

[9] Austrian Supreme Court (OGH), 29.08.2018, 1 Ob 133/18t.

Repatriation Flights

Repatriation Flights

The height of the COVID-19 pandemic and the travel bans related thereto forced numerous airlines to cancel their flights and left passengers stranded far away from their homes. In many cases, these passengers were only able to return home by using special flights organised by their states – so-called repatriation flights.

In its ruling regarding case C-49/22 the European Court of Justice (ECJ) answered key questions raised by the Austrian Regional Court Korneuburg in connection with repatriation flights.

In the case at hand, the claimant booked (as part of a package holiday) the flights OS 17, scheduled for 7 March 2020 from VIE to MRU, and OS 18, scheduled for 20 March 2020 from MRU to VIE, both to be operated by Austrian Airlines. While flight OS 17 went ahead as scheduled, flight OS 18 was cancelled due to the measures taken by the Austrian government due to the COVID-19 pandemic.

On 19 March the claimant was informed about the cancellation and the possibility to return to VIE by using a repatriation flight organised by the Austrian Ministry of Foreign Affairs, which was scheduled for 20 March at the flight time originally reserved for OS 18 and operated by Austrian Airlines under OS 1024. The claimant and his wife registered for this repatriation flight and had to pay an obligatory contribution of EUR 500 per person.

The claimant eventually filed a lawsuit against Austrian Airlines, demanding compensation of the obligatory contribution amounting to EUR 1,000 while referring to Regulation 261/2004. The District Court Schwechat decided in the claimant´s favour, which led to an appeal by Austrian Airlines and a request for a preliminary ruling of the ECJ.

The ECJ decided that a repatriation flight does not constitute a “re-routing, under comparable transport conditions, to [the] final destination” within the meaning of Article 8(1)(b) of Regulation 261/2004. Therefore, operating air carriers are not obliged to offer repatriation flights to passengers whose flights have been cancelled.

The ECJ further ruled that passengers do not have a right to reimbursement of obligatory contributions to repatriation flights at the expense of the operating air carrier on the basis of Regulation 261/2004.

Don´t hesitate to contact our Aviation Team to learn more about passenger claims in Austria.

Unexpected absence of a crew member

In its ruling in joined cases C-156/22 to C-158/22 the European Court of Justice (ECJ) decided that the unexpected absence of a crew member does not constitute extraordinary circumstances and can, therefore, not release an operating air carrier from its obligation to pay compensation to passengers in case of cancellations or great delays.

The case at hand concerns a flight that should have been operated by TAP from Stuttgart (Germany) to Lisbon (Portugal), on 17 July 2019 with a departure scheduled at 6.05. However, on the morning of this day, at 4.15, the co-pilot that should have operated the flight concerned was found dead in his hotel bed. Shocked by this event, the whole crew declared itself unfit to fly. As there was also no replacement staff available in Stuttgart (outside TAP’s base), the flight was cancelled. The passengers were transported to Lisbon on a replacement flight scheduled at 16.40 on the same day.

The ECJ decided that the unexpected absence – due to illness or death of a crew member whose presence is essential to the operation of a flight – which occurred shortly before the scheduled departure of that flight, does not fall within the concept of extraordinary circumstances.

This is in line with the ECJ´s prior court practice that declared that measures relating to the staff of the operating air carrier fall within the normal exercise of the air carrier´s activities and, therefore, are not suitable for constituting extraordinary circumstances that could relieve an air carrier from its obligation to pay compensation to its passengers.

Don´t hesitate to contact our Aviation Team to learn more about passenger claims in Austria.

Strikes in Europe as extraordinary circumstances

Strikes in Europe as extraordinary circumstances

The aviation sector in Europe is currently experiencing a substantial number of strikes. There are nationwide protests in France due to a reform of the retirement system, strikes organised by the union for employees in the traffic sector in Germany, works meetings at Austrian Airlines, strikes by the security staff at London Heathrow airport, and strikes by the ground-handling staff of Swissport in Spain.

As a result, air carriers are forced to delay or cancel numerous flights and are confronted with unsatisfied passengers – and their claims for compensation payments under Regulation 261/2004. The question arises if the current strikes in Europe can lead to extraordinary circumstances within the meaning of Art 5 (3) of this regulation and could, therefore, exempt air carriers from their payment obligations.

This article aims to illustrate the relevant criteria when assessing strikes and to give an overview of court practice of the European Court of Justice (ECJ) and Austrian courts on different categories of strikes.

The principles:

Already in its ruling C‑549/07, the ECJ stated that for events to be regarded as extraordinary, they (i) must not be inherent in the normal exercise of the activity of the air carrier concerned and (ii) must be beyond the actual control of that carrier on account of its nature or origin.

These principles must also be kept in mind when evaluating cases of strikes.

Categories of strikes:

Since there is a variety of cases when it comes to strikes, a categorization is necessary to give general answers to types of strikes based on the principles mentioned above.

Strikes by the air carrier´s employees concerning demands vis-a-vis the air carrier

This category includes strikes that aim to enforce demands vis-a-vis the air carrier, especially for better working conditions or higher salaries.

The ECJ dealt with such cases on several occasions and concluded that such strikes, in general, do not constitute extraordinary circumstances. This is in line with the abovementioned principles, because such strikes are often inherent in the normal exercise of the activity of an air carrier and not beyond its actual control.

Examples of cases in which the ECJ stated that such strikes cannot constitute extraordinary circumstances are C-195/17 concerning “wildcat strikes” (the spontaneous absence of a significant part of the flight crew staff), and C-287/20 and C‑28/20, both concerning strikes organised by a union to enforce higher salaries.

Strikes by the air carrier´s employees for other reasons

This category is not as common as the first category, but currently of special relevance due to the numerous strikes France in connection with the reform of the French retirement system. The reasons for such strikes are not connected to the air carrier and it is not within the air carrier´s power to meet the demands of the strikes.

Such strikes are generally regarded to constitute extraordinary circumstances, because they are not inherent in the normal exercise of the activity of an air carrier and are beyond its actual control. Consequently, the ECJ stated in its ruling C-28/20 that strikes that originate from demands that only the public authorities can satisfy are capable of constituting extraordinary circumstances.

Strikes by others than the air carrier´s employees

In cases, in which the employees of other entities are on strike, it must be differentiated.

If an air carrier chooses to use another company to perform tasks that typically fall within its own responsibilities, such as check-in, ground-handling or de-icing of aircraft, strikes of the employees of such companies must be treated as if the air carrier´s own employees would have been on strike. Therefore, if such strikes concern demands vis-a-vis these companies, they can generally not constitute extraordinary circumstances, while strikes for other reasons can.

Consequently, the Austrian court for commercial matters (Handelsgericht Wien) in case 1 R 87/22y and the district court Schwechat in cases 20 C 221/20f, 20 C 98/20t and 20 C 234/20t decided that strikes of employees of a ground-handling company used by the air carrier, that protest a decision of an Austrian authority, can constitute extraordinary circumstances.

Strikes by employees of entities which are not used by an air carrier to perform tasks that typically fall within its own responsibilities, such as airport security or air traffic control, are generally regarded to be capable of constituting extraordinary circumstances.

In its ruling C-28/20, the ECJ states that strikes that are external to the activity of the air carrier, such as strike actions taken by air traffic controllers or airport staff, may constitute extraordinary circumstances. The Austrian regional court Korneuburg reaches the same conclusion in its cases 22 R 209/21x and 22 R 9/22m that concern a strike by air traffic control employees.

Closing remarks:

It should be highlighted that even in cases of extraordinary circumstances air carriers are only exempt from their obligations to make compensation payments if all reasonable measures within the meaning of Article 5 (3) of Regulation 261/2004 have been taken by them. Furthermore, Austrian courts usually demand detailed explanations and evidence regarding extraordinary circumstances. In practice, many court cases are lost because air carriers cannot meet these requirements and not because the strike in question was not capable of constituting extraordinary circumstances.

Therefore, it is essential to work with specialists in this field and to closely assess each case to have clarity about the chances of succeeding in court proceedings before investing substantial resources in them. Don´t hesitate to contact our Aviation Team to learn more about passenger claims in Austria.