Beiträge

Lexology GTDT Air Transport Austria

Lexology GTDT: Luftverkehr in Österreich

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Unser Aviation Team wurde eingeladen, das Kapitel zum Luftverkehr in Österreich der Publikationsreihe „Getting the Deal Through“ (GTDT) von Lexology zu verfassen.

Das Ziel von GTDT ist es, Lesern einen schnellen Zugang zu länderspezifischen Einblicken in eine Vielzahl von Themen zu geben. Für die Autoren ist es daher von entscheidender Bedeutung, über ein breites Spektrum an Fachwissen verfügen und gleichzeitig in der Lage zu sein, relevante Informationen in kompakter, aber dennoch umfassender Form zu vermitteln.

Wir laden Sie ein, unseren Beitrag zum Luftverkehr in Österreich zu lesen, indem Sie hier (online) oder hier (pdf) klicken und uns für weitere Informationen kontaktieren.

Reproduced with permission from Law Business Research Ltd. This article was first published in Lexology GTDT – Air Transport 2023. For further information, please visit: https://www.lexology.com/gtdt

Strikes in Europe as extraordinary circumstances

Strikes in Europe as extraordinary circumstances

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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.

Aviation Fuel Tax in Austria

Aviation Fuel Tax in Austria

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The Aviation Team of Weisenheimer Legal has recently secured a business jet operator’s right to tax-free use of aviation fuel in Austria.

According to Article 14 Energy Products Directive (2003/96/EC), energy products supplied for use as fuel for the purpose of commercial air navigation (“other than in private pleasure-flying”) are exempt from EU Energy Tax. In order to benefit from this tax exemption, an operator must obtain a refueling certificate. To obtain such a refueling certificate, an “exclusively commercial use of the aircraft by the operator” must be shown and supported by appropriate evidence.

For several years, it was unclear in Austria what constitutes an “exclusively commercial use of the aircraft” and what evidence the authorities may reasonably demand from the operator to prove it.

With the majority of business aviation flights booked with operators not by passengers but rather via charter brokers, the Austrian authorities insisting on the disclosure of “end-customer invoices” (i.e. invoices issued by brokers to passengers), many operators could not discharge the burden of proof and were thus denied refueling certificates necessary for tax-free use of aviation fuel in Austria. Furthermore, Austrian Customs (Zollamt Österreich) insisted that the sale of flights via charter brokers meant that it were the brokers and not the operator who exercised the effective control and enjoyed the use of the aircraft for the duration of the flight booked.

Following the intervention by Weisenheimer Legal and the support of Austrian Business Aviation Association (ABAA), the Federal Finance Court decided that the mere fact that flights are sold via charter brokers does not effect a transfer of control and use of the aircraft to third parties (brokers). Therefore, it was decided that invoices issued to brokers by an operator with a valid Air Operator Certificate (AOC) were sufficient evidence of “exclusively commercial use of the aircraft by the operator”.

The decision is available here (in German).

This decision is the next positive development in a chain of court decisions issued after the Austrian Supreme Administrative Court decided in September 2022 that flights operated by business jet operators for the aircraft owners satisfied the requirement of commercial operation and thus qualified for tax-free use of Aviation fuel as long as they were operated “for a fee”, which could also take the form of a (monthly) management fee (case number Ra 2019/16/0104).

The Hague Court of Arbitration for Aviation

The Hague Court of Arbitration for Aviation

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In many cases, commercial disputes among members of the aviation sector are still resolved by litigation rather than arbitration, even though arbitration may offer several advantages for the parties involved in the dispute. The recently established Hague Court of Arbitration for Aviation (Hague CAA) could contribute to change this by offering specialized arbitration in aviation related matters.

Especially in the context of international commercial disputes within the aviation sector, arbitration offers several advantages compared to litigation. For instance, the possibility to appoint an arbitrator with special knowledge of the aviation sector, aviation law and the technology used instead of having the dispute decided by a judge with no link to the aviation sector, who is often heavily depending on the opinion of expert witnesses. Another practical advantage is that due to the widely ratified New York Convention, the international enforcement of arbitration awards is often much easier than enforcing rulings of national courts.

Further, by choosing arbitration in a country, in which none of the involved parties is based, a possible “homefield advantage” of one party is eliminated. The new Hague CAA is not affiliated with particular parts of the aviation industry and administered by the widely respected Netherlands Arbitration Institute (NAI), which further ensures the court´s neutrality.

Similar to other industry specific courts like the Court of Arbitration for Art (CAfA), the Chambre Arbitrage Maritime de Paris (CAMP) or the Court of Arbitration for Sport (CAS), the Hague CAA´s main selling point is its specialization. By choosing the Hague CAA, parties have access to the court´s pool of aviation law and technology specialists, who can act as arbitrators, mediators, or experts in the proceedings.

As a consequence of its aviation specialization, the Hague CAA´s procedural rules were designed to meet the particular needs of the aviation sector, especially for speed and flexibility. For instance, the parties have the possibility to appoint an emergency arbitrator to decide urgent measures within a maximum of 15 days after his or her appointment. The Hague CAA is also offering more flexibility regarding the location of hearings and the possibility of their virtual attendance compared to litigation in most countries. Additionally, the procedural rules set forth expedited proceedings for amounts in dispute of less than € 10 million or when the parties consent thereto.

Another important way of dispute resolution and valid alternative to litigation is mediation. By choosing this way and finding an amicable solution, parties are often able to avoid high procedural costs and to continue their business relationship relatively unharmed. Mediation is also offered by the Hague CAA.

Overall, many parties are well advised to seriously consider resolving their disputes by mediation or arbitration rather than litigation. For members of the aviation sector, the newly established Hague Court of Arbitration for Aviation is a promising new venue for this purpose. Don´t hesitate to contact our Aviation Team to learn more about different ways of dispute resolution.

Lexology GTDT Air Transport Austria

Lexology GTDT: Air Transport in Austria

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We are happy to share that our Aviation Team was chosen to author the chapter on Air Transport in Austria in the latest edition of Lexology´s Getting the Deal Through (GTDT).

The GTDT´s aim is to give readers quick access to country specific insights to a variety of topics. Thus, it is crucial for contributors to have a wide range of expertise while also being able to deliver relevant information in a compact, but still comprehensive way.

Luckily, our aviation team was perfectly prepared for this challenge. With our partner, Martina Flitsch, leading the way with her over 25 years of experience in the aviation field assisted by our two associates, Dominik Weiß and Aleksander Makal, who were, despite their young age, already able to gather several years of experience in advising many players on a variety of aviation related topics.

We invite you to check out the GTDT on Air Transport in Austria by clicking here (online) or here (pdf) and to reach out to us for further information.

Reproduced with permission from Law Business Research Ltd. This article was first published in Lexology GTDT – Air Transport 2023. For further information, please visit: https://www.lexology.com/gtdt

Air carrier liability for psychological injuries

Air carrier liability for psychological injuries

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The Montreal Convention is a multilateral treaty for the unification of several rules for international air carriage to which 136 states and the European Union are parties. It is of major significance for the aviation sector and contains, inter alia, provisions on an air carrier´s liability in case of an international flight. Article 17 of the Montreal Convention stipulates that an air carrier is liable for damage sustained in case of death or bodily injury of a passenger caused by an accident that took place on board of an aircraft or while embarking or disembarking. Since the term “bodily injury” is not defined in the Montreal Convention, questions were raised whether air carriers can also be held liable for psychological injuries under the Montreal Convention.

In case C‑111/21, the Court of Justice of the European Union (CJEU) had to deal with such a case. The passenger in question embarked a flight operated by the former Austrian air carrier Laudamotion between London and Vienna. During take-off, the left engine of the aircraft exploded, causing an evacuation of the passengers. The passenger in question disembarked the aircraft via the emergency exit and was hurled several metres through the air by the jet blast from the right engine, which had not yet been shut down. As a consequence, the passenger suffered not only physical, but also psychological harm.

The Austrian courts (District Court Schwechat and upon an appeal the Regional Court Korneuburg) were of the opinion that psychological injuries do not fall within the meaning of “bodily injury” and are therefore not covered by Article 17 of the Montreal Convention. However, the passenger brought the case before the Austrian Supreme Court, which decided to refer this question to the CJEU.

The CJEU argued by taking into account the preparatory works which led to the Montreal Convention and its objectives that the situation of a passenger who has suffered a psychological injury as a result of an accident may be comparable to that of a passenger who has suffered bodily injury. Consequently, the CJEU stated that according to Article 17 of the Montreal Convention air carriers are liable for psychological injury, which is not linked to bodily injury. However, only if the passenger can demonstrate (by means in particular of a medical report and proof of medical treatment) the existence of an adverse effect on his psychological integrity of such gravity that it affects his general state of health and that it cannot be resolved without medical treatment.

Don´t hesitate to contact our Aviation Team to learn more about the application of the Montreal Convention in Austria.

Consequences of a travel agency´s actions for air carriers

Consequences of a travel agency´s actions for air carriers

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In two recent decisions, the Court of Justice of the European Union (CJEU) dealt with the consequences of a travel agency´s actions for air carriers in context with Regulation 261/2004.

In case C-307/21, the passengers booked flights from Düsseldorf to Tangier via the travel agent Kiwi.com. The air carrier was provided with an e-mail address, which was most likely automatically generated by Kiwi.com and to which the passengers had no access. In the following, the air carrier sent an e-mail to this e-mail address in order to inform the passengers about the cancellation of their flight. Since this e-mail has been sent 14 days prior to the date of the scheduled flight, it would have complied with Article 5 (1) (c) (i) of Regulation 261/2004, resulting in the passengers not being entitled to receive a compensation within the meaning of Article 7 of Regulation 261/2004. However, Kiwi.com did not forward this e-mail to the passengers.

The CJEU decided on 27 September 2022 that the air carrier is obliged to pay a compensation to the passengers if the travel agency didn´t forward the air carrier´s e-mail in due time even if the air carrier was not aware of the fact that the e-mail address it has been provided with could only be used to contact the travel agency and not the passengers directly.

In case C‑436/21, a passenger booked the following itinerary: Stuttgart-Zurich-Philadelphia-Kansas City. The flight from Stuttgart to Zurich was operated by Swiss International Air Lines AG, while the other two flights were operated by American Airlines. This itinerary was booked via a travel agency in the form of a single electronic ticket with a single user price for the entire journey and the number of this ticket was displayed on the boarding passes relating to the flights. While the previous flights were on time, the flight from Philadelphia to Kansas City was delayed by more than four hours.

During the proceedings initiated in Germany against American Airlines, the involved German courts stated that Regulation 261/2004 does not apply, since American Airlines did not operate a flight departing from the territory of a member state of the EU. According to the German courts, there was nothing to indicate that American Airlines had undertaken to transport the passenger from Stuttgart to Kansas City, or that it had assumed responsibility for that transportation under a code sharing agreement. Subsequently, the case was brought before the German Supreme Court and the CJEU.

In its ruling C-436/21 the CJEU stated that – in the interest of the high level of protection for passengers – the concepts of “connecting flights” and “reservations” must be interpreted broadly, which lead to the CJEU´s decision that there has been a connecting flight even though the operating air carriers did not have a specific legal relationship. Therefore, the place of departure (Stuttgart, Germany) is of relevance, Regulation 261/2004 is applicable, and the passenger may be entitled to a compensation payment for the delay of his last flight leg.

Don´t hesitate to contact our Aviation Team to learn more about the consequences of a travel agency´s actions for air carriers in connection with Regulation 261/2004 and about passenger claims in Austria in general.

Legal fees and no-reply email addresses

Legal fees and no-reply email addresses

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Many questions of our airline clients concern legal fees demanded by passengers and under what circumstances these fees must be paid. Especially when letters of notice are sent to no-reply email addresses and subsequently lawsuits are filed, there are often uncertainties. The aim of today´s article is to briefly illustrate the Austrian system concerning the reimbursement of legal fees and to answer the question if legal fees must be paid when a letter of notice has merely been sent to a no-reply email address.

Airlines are often confronted by letters of notice sent by a lawyer with which not only a ticket reimbursement or compensation payment is demanded, but also legal fees for the lawyer´s work. Such legal fees must only be paid if the involvement of a lawyer was necessary for the passenger. This is the case if, e.g., the passenger already contacted the airline himself, but the airline refused to pay the demanded amount or did not react to the passenger´s query. Additionally, according to court practice, it can be necessary to involve a lawyer if the airline fails to inform the passenger about his rights granted by the Regulation 261/2004 (in violation of Article 14 of this regulation).

In Austrian court proceedings, the prevailing party is entitled to receive a reimbursement of its legal fees by the opponent (in case of a partial victory: on a pro rata basis). These legal fees are calculated in accordance with the Lawyers Tariffs Act (Rechtsanwaltstarifgesetz), regardless of any possible separate agreement between lawyer and client regarding the remuneration.

However, also these legal fees are only reimbursed if the respective actions (e.g., filing a lawsuit) have been necessary. If the passenger (or his lawyer) did not contact the airline before filing a lawsuit, the airline can refuse to pay his legal fees and even demand reimbursement for its own legal fees if it acknowledges and pays the passenger´s claim at the first moment possible.

The Commercial Court Vienna had to deal with a case in which the passenger did not contact the airline first and his lawyer sent a letter of notice only to a no-reply email address used by the airline. The lawyer ignored the standardized reply email that asked him to use another email address for his query and filed a lawsuit. Subsequently, the airline acknowledged and paid the claim without undue delay, refused to pay the passenger´s legal fees and demanded reimbursement for its own legal fees. The Commercial Court Vienna decided in the airline´s favor (case number: 60 R 42/21p).

Don´t hesitate to contact our Aviation Team to learn more about the system of legal fees passengers may demand to in connection with passenger claims and passenger claims in Austria in general.

The breakdown of an airport´s refueling system constitutes extraordinary circumstances

The breakdown of an airport´s refueling system constitutes extraordinary circumstances

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On 7 July 2022, the European Court of Justice (ECJ) decided that the breakdown of an airport´s refueling system constitutes extraordinary circumstances within the meaning of Article 5 (3) of Regulation 261/2004 (case C-308/21).

In its reasoning, the ECJ once more pointed out the criteria it regards relevant when it comes to extraordinary circumstances: the events that occurred must not be inherent in the normal exercise of the activity of the air carrier concerned and they must be beyond the air carrier´s actual control.

Regarding the first criterion, the ECJ stated that, in principle, refueling operations fall within the scope of the normal exercise of an air carrier´s activity and that, therefore, a technical issue arising during the refueling would not be suitable to constitute extraordinary circumstances. However, a general failure in the refueling system managed by the airport must be treated differently than a technical issue that, by its nature, is only confined to a single aircraft. Therefore, the ECJ came to the conclusion that such general failures of the refueling system are not inherent in the normal exercise of the activity of the air carrier concerned.

Regarding the second criterion, the ECJ once again highlighted the importance of the distinction between “internal” and “external” events, whereas only “external” events are regarded to be beyond the air carrier´s actual control. Therefore, if the refueling system at an airport is managed by this airport or a third party, a general breakdown of this system is regarded to be beyond the air carrier´s control.

Since both criteria of extraordinary circumstances are met, the ECJ decided that the general breakdown of an airport´s refueling system constitutes extraordinary circumstances. Therefore, the respective air carrier is not obliged to pay compensation to the passengers, provided that all reasonable measures were taken.

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

Strikes because of an authority´s decision constitute extraordinary circumstances

Strikes because of an authority´s decision constitute extraordinary circumstances

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On 30 June 2022, the district court Schwechat ruled in three cases we are handling for a client that strikes constitute extraordinary circumstances if the reason for the strikes is an authority´s decision. The court argues that such strikes that are based on demands that can only be fulfilled by authorities (and not the airline itself) are beyond the airline´s control. In the cases at hand, not the airline´s employees, but the ground handling staff was striking and thereby disturbing the normal operations.

These rulings are in line with the ECJ´s ruling C-28/20, in which the ECJ mentioned: “If, however, such a strike originates from demands which only the public authorities can satisfy and which, accordingly, are beyond the actual control of the air carrier concerned, it is capable of constituting an ‘extraordinary circumstance’ […]”

Therefore, airlines are not obliged to pay compensation (Art 7 of Reg 261/2004) if flights are cancelled or significantly delayed due to such strikes, provided that all reasonable measures in connection therewith are taken.

Don´t hesitate to contact our Aviation Team to learn more about when strikes constitute extraordinary circumstances and passenger claims in Austria.