Ryanair’s right under EU Charter to profit from its customers?
1 February 2013
Denise McDonagh v Ryanair Ltd [2013] EUECJ C-12/11 (31 January 2013) – read judgment
“Congratulations! You have arrived on yet another ontime Ryanair flight. Ryanair – for the lowest fares and the best ontime record. Outstanding”
… or maybe not so outstanding.
On 11 February 2010, Ms McDonagh booked a flight with Ryanair from Faro (Portugal) to Dublin (Ireland) scheduled for 17 April 2010. On 20 March 2010, the Eyjafjallajökull volcano in Iceland began to erupt. On 14 April 2010, it entered an explosive phase, casting a cloud of volcanic ash into the skies over Europe. On 15 April 2010, the competent air traffic authorities closed the airspace over a number of Member States because of the risks to aircraft. Ms McDonagh’s flight was cancelled following the closure of Irish airspace. Ryanair flights between continental Europe and Ireland resumed on 22 April 2010 and Ms McDonagh was not able to return to Dublin until 24 April 2010. In the intervening week, no efforts were made by the airline to provide Ms McDonagh with the care to which she was entitled under the relevant EU Regulation No 261/2004, providing rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights.
Ms McDonagh brought an action against Ryanair before the Dublin District Court for compensation in the amount of EUR 1 129.41, corresponding to the costs which she had incurred during that period on meals, refreshments, accommodation and transport.
The reference to the CJEU
The Court referred a number of questions under Article 267 TFEU to the EU Court of Justice for a preliminary ruling, the main one being whether whether the Regulation must be interpreted as meaning that circumstances such as the closure of part of European airspace as a result of the eruption of the Eyjafjallajökull volcano constituted‘extraordinary circumstances’ within the meaning of that regulation which do not release air carriers from their obligation laid down in Articles 5(1)(b) and 9 of the regulation to provide care or, on the contrary and because of their particular scale, go beyond the scope of that notion, thus releasing air carriers from that obligation.
The legal framework
The Regulation limits and in some cases excludes any liability for operating air carriers where an event has been caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken. Article 5 provides that in the event of cancellation of a flight the passengers concerned are to be offered assistance by the air carrier, under the conditions laid down in that subparagraph, meeting the costs of meals, accommodation and communication as provided for in Article 9 of that regulation. Article 29 of the Regulation para 15 provides that “extraordinary circumstances” should be deemed to exist
where the impact of an air traffic management decision in relation to a particular aircraft on a particular day gives rise to a long delay, an overnight delay, or the cancellation of one or more flights by that aircraft, even though all reasonable measures had been taken by the air carrier concerned to avoid the delays or cancellations.’
The arguments
Ryanair’s argument was threefold. It contended, first, that airlines were unfairly burdened with an obligation to compensate in circumstances where other operators such as ships and coaches were not, in breach of the EU principle of non-discrimination. It also submitted that the closure of part of European airspace following the eruption of the Eyjafjallajökull volcano did not constitute ‘extraordinary circumstances’ within the meaning of Regulation but ‘super extraordinary circumstances’, releasing it not only from its obligation to pay compensation but also from its obligations to provide care under Articles 5 and 9 of that regulation. The company further sought to rely on the Charter of Fundamental Rights Articles 16 and 17 of the Charter of which guarantee freedom to conduct a business and the right to property respectively. It claimed that the obligation to provide care to passengers imposed on air carriers in circumstances such as those at issue in the main proceedings had the effect of “depriving air carriers of part of the fruits of their labour and of their investments”.
Ryanair was not the only party who failed to come up smelling of roses in this interesting little dispute. The EU Council itself objected to the admissibility of the request for a preliminary ruling because, it said, the obligations and liabilities laid down in the Montreal Convention can only be enforced by national states. The CJEU gave this somewhat unattractive argument short shrift. The Convention, it said,
cannot be interpreted as allowing only national bodies responsible for the enforcement of Regulation No 261/2004 to sanction the failure of air carriers to comply with their obligation laid down in Articles 5(1)(b) and 9 of that regulation to provide care.
The preliminary ruling
The CJEU took the view that it was clear from the wording of the Regulation that the obligation on the air carrier to provide care is necessary whatever the event which has given rise to the cancellation of the flight. If Ryanair’s interpretation was right, and that “super extraordinary circumstances” released it from its obligation of care, it would mean that air carriers would be required to provide care pursuant to Article 9 of Regulation No 261/2004 to air passengers who find themselves, due to cancellation of a flight, in a situation causing limited inconvenience, whereas passengers, such as the plaintiff in the main proceedings, who find themselves in a particularly vulnerable state in that they are forced to remain at an airport for several days would be denied that care.
the provision of care to such passengers is particularly important in the case of extraordinary circumstances which persist over a long time and it is precisely in situations where the waiting period occasioned by the cancellation of a flight is particularly lengthy that it is necessary to ensure that an air passenger whose flight has been cancelled can have access to essential goods and services throughout that period….
The fact that the obligation defined in Article 9 of Regulation No 261/2004 to provide care entails, as Ryanair claims, undoubted financial consequences for air carriers is not such as to invalidate that finding, since those consequences cannot be considered disproportionate to the aim of ensuring a high level of protection for passengers.
As for Ryanair’s Charter argument, the CJEU was not impressed. Apart from the inbuilt limitations of the guarantees themselves (Arts. 15 and 16), there was a question of balance. Article 38 of the Charter seeks to ensure a high level of protection for consumers, including air passengers, in European Union policies. As such, it prevails over the airline’s rights, protection of those passengers being one of the principal aims of Regulation No 261/2004.
The actual sum to which Ms McDonald was consequently entitled was a matter for the national court to assess.
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In a pig’s ear, John, in a pig’s bloody ear!
Or diminish shareholder dividend payments.
Nice as it was to see the smile wiped off Ryanair’s collective face, there is no arguing with the economics of it: this will increase airfares.
The regulation is unambiguous so I can’t see why this was even referred. The Article 9 right to care is completely separate from the Article 7 right to compensation, to which the extraordinary circumstances defence applies.
Also, at the time of the disruption, from the way it was being reported it seemed that no airline was actually providing the meals and hotels as required: they were just refunding passengers’ costs weeks later. The regulation clearly says the airlines must provide the care free of charge.