Beiträge

Agency Fees

Agency fees: Austrian court practice on reimbursements

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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

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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

Repatriierungsflüge

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Auf dem Höhepunkt der COVID-19-Pandemie und den damit verbundenen Reiseverboten mussten zahlreiche Fluggesellschaften ihre Flüge streichen, so dass die Passagiere weit weg von ihrer Heimat gestrandet sind/ waren. In vielen Fällen konnten diese Passagiere nur mit Hilfe von Sonderflügen, die von ihren Staaten organisiert wurden – sogenannte Repatriierungsflüge – nach Hause zurückkehren.

In seinem Urteil in der Rechtssache C-49/22 beantwortete der Europäische Gerichtshof (EuGH) zentrale Fragen, die das österreichische Landesgericht Korneuburg im Zusammenhang mit Repatriierungsflügen aufgeworfen hatte.

Im vorliegenden Fall buchte der Kläger (im Rahmen einer Pauschalreise) die Flüge OS 17, geplant für den 7. März 2020 von VIE nach MRU, und OS 18, geplant für den 20. März 2020 von MRU nach VIE, die beide von Austrian Airlines durchgeführt werden sollten. Während der Flug OS 17 planmäßig durchgeführt wurde, wurde der Flug OS 18 aufgrund der von der österreichischen Regierung wegen der COVID-19-Pandemie getroffenen Maßnahmen gestrichen.

Am 19. März wurde der Kläger über die Annullierung und die Möglichkeit informiert, mit einem vom österreichischen Außenministerium organisierten Repatriierungsflug nach VIE zurückzukehren, der für den 20. März zur ursprünglich für OS 18 reservierten und von Austrian Airlines unter OS 1024 durchgeführten Flugzeit geplant war. Der Kläger und seine Ehefrau meldeten sich für diesen Rückführungsflug an und mussten einen obligatorischen Beitrag/ verpflichtenden Unkostenbeitrag von 500 EUR pro Person zahlen.

Der Kläger erhob schließlich Klage gegen Austrian Airlines und verlangte unter Berufung auf die Verordnung (EG) 261/2004 den Ersatz des Pflichtbeitrages in Höhe von 1.000 EUR. Das Bezirksgericht Schwechat entschied zu Gunsten des Klägers, woraufhin Austrian Airlines Berufung einlegte und den EuGH um eine Vorabentscheidung ersuchte.

Der EuGH entschied, dass Repatriierungsflüge keine „anderweitige Beförderung zum Endziel unter vergleichbaren Reisebedingungen“ im Sinne von Artikel 8 Absatz 1 Buchstabe b der Verordnung (EG) 261/2004 darstellen. Daher sind die ausführenden Luftfahrtunternehmen nicht verpflichtet, Fluggästen, deren Flüge annulliert wurden, einen Rückführungsflug anzubieten.

Der EuGH entschied ferner/anderes, dass Fluggäste keinen Anspruch auf Erstattung von Pflichtbeiträgen zu Repatriierungsflügen zu Lasten des ausführenden Luftfahrtunternehmens auf der Grundlage der Verordnung 261/2004 haben.

Für Fragen zu Passenger Claims in Österreich steht Ihnen unser erfahrenes Aviation Team gerne zur Verfügung.

Unexpected absence of a crew member

Unerwartete Abwesenheit eines Besatzungsmitglieds

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In seinem Urteil in den verbundenen Rechtssachen C-156/22 bis C-158/22 hat der Europäische Gerichtshof (EuGH) entschieden, dass die unerwartete Abwesenheit eines Besatzungsmitglieds keinen außergewöhnlichen Umstand darstellt und daher ein ausführendes Luftfahrtunternehmen nicht von seiner Verpflichtung entbinden kann, Fluggästen im Falle von Annullierungen oder großen Verspätungen Ausgleichszahlungen zu leisten.

Im vorliegenden Fall geht es um einen Flug, den TAP am 17. Juli 2019 von Stuttgart (Deutschland) nach Lissabon (Portugal) hätte durchführen sollen, mit einem planmäßigen Abflug um 6.05 Uhr. Am Morgen dieses Tages, um 4.15 Uhr, wurde der Kopilot, der den Flug hätte durchführen sollen, tot in seinem Hotelbett aufgefunden. Unter dem Schock dieses Ereignisses erklärte sich die gesamte Besatzung für fluguntauglich. Da auch in Stuttgart (außerhalb der TAP-Basis) kein Ersatzpersonal zur Verfügung stand, wurde der Flug abgesagt. Die Fluggäste wurden mit einem Ersatzflug, der für 16.40 Uhr desselben Tages angesetzt war, nach Lissabon befördert.

Der EuGH entschied, dass die unerwartete Abwesenheit eines Besatzungsmitglieds, dessen Anwesenheit für die Durchführung eines Fluges unerlässlich ist, kurz vor dem planmäßigen Abflug dieses Fluges wegen Krankheit oder Tod nicht unter den Begriff der außergewöhnlichen Umstände fällt.

Dies steht im Einklang mit der früheren Rechtsprechung des EuGH, der erklärt hat, dass Maßnahmen, die das Personal des ausführenden Luftfahrtunternehmens betreffen, zur normalen Ausübung der Tätigkeit des Luftfahrtunternehmens gehören und daher nicht geeignet sind, einen außergewöhnlichen Umstand darzustellen, der ein Luftfahrtunternehmen von seiner Verpflichtung zur Zahlung von Ausgleichsleistungen an seine Fluggäste entbinden könnte.

Für Fragen zu Passenger Claims in Österreich steht Ihnen unser erfahrenes Aviation Team gerne zur Verfügung.

 

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).