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EU 261 - Airlines reject 95% of claims

Liverpool, UK
posts: 8,988
reviews: 14
EU 261 - Airlines reject 95% of claims

A report in the Daily Telegraph Travel section (UK newspaper) suggests that airlines are rejecting 95% of delay claims made under EU 261 although I have no way of verifying the validity of the data.

I laughed when I read that Ryanair are one of the most difficult companies to deal with on this issue and they descibed the claims as "ambulance chasing rubbish".

This might put the claims from those seeking compensation for "old" flights in context and allay the fears of those who saw EU 261 as bringing about the end of low fares.

telegraph.co.uk/travel/travelnews/9635188/Ai…

Edmonton
posts: 7,185
reviews: 14
1. Re: EU 261 - Airlines reject 95% of claims

Well, if they have to pay out for 95 percent of claims, what did the public think was going to happen??? Of couse this will drive fares up. Think of all the paperwork and time and employed hours will have to be dedicated to this.

Tom may just be right, the end to low discount fares. The people got what they wanted, but didn't think about the long run.

Leicester, United...
posts: 1,275
reviews: 1
2. Re: EU 261 - Airlines reject 95% of claims

"Of couse this will drive fares up"

There is no reason why it should.

If the delay or cancellation is caused by something outside their control, the airlines don't have to pay.

If it is caused by something they could have prevented they do have to pay, and they only have themselves to blame. A well-run airline should only rarely have to pay compensation, and thus fares should not need to rise in that case.

australia
posts: 2,551
reviews: 17
3. Re: EU 261 - Airlines reject 95% of claims

Does anyone know the reason why EU 261 was bought in?

Was it due to the LCC's cancelling flights leaving people stranded and not giving them their money back?

Or was the EU trying to do it's own thing rather than modify the existing Warsaw/Montreal Conventions which tend to cover the majority of people anywhere in the world.

Leicester, United...
posts: 1,275
reviews: 1
4. Re: EU 261 - Airlines reject 95% of claims

The reasons are laid out in the "whereas" section of the regulation:

eur-lex.europa.eu/LexUriServ/LexUriServ.do…

Liverpool, UK
posts: 8,988
reviews: 14
5. Re: EU 261 - Airlines reject 95% of claims

maried11

"Well, if they have to pay out for 95 percent of claims, what did the public think was going to happen???"

They are rejecting 95% of claims not paying out on them.

jagjetfly

I don't think EU261 was brought in due to LCCs - more likely it's a case of the EU doing its own thing probably because some overpaid/underemployed eurocrat had some spare time on his/her hands.

Bangkok
Destination Expert
for Bangkok, Air Travel, Thailand
posts: 13,630
reviews: 71
6. Re: EU 261 - Airlines reject 95% of claims

Hi,

I think #1 and #2 are both right to varying degrees...

Naturally ANY and ALL costs that are added into the business "cost" side of the larger "cost-v-price" equation are going to have to be accounted for on the other "side" of that equation.... but this can be via things like operational changes, initiating efficiencies, improvement in processes or redeployment of existing capital to areas of the business that are incurring these added costs..

However, this can also be from price adjustments as well.. So there's several ways for the "cost" side to be balanced against the "price" side of that same equation. but I think this idea of "just add it to the fare" is heavily reliant on competitive forces.. If you're talking about a very competitive market like LON-NYC or LAX-TYO (to use cover co-terminals) there's less ability for a carrier to just take the "pass it along" process.... but.. on thinner markets like BKK-USM that's 85%+ controlled by one carrier, or REP-BKK by one carrier, that's far, far easier...

This larger issue of "how to manage" is, to me is reflected in #2... a well run business should have a *nominal" number of these claims..

but.. I also recognize that for airlines of size.. there's a LOT of variables in there that are either wholly or partially not the carriers controllable ...

I also think that carriers, like most business, do look at what I'll call "law of diminishing returns".. in that I mean there's a point where added capital starts to produce smaller and smaller "returns"...

I see this in the idea (speaking to luggage theft and such) of installing more cameras, etc to better monitor the process and people and therefore presumptively reduce loss claims.

Yes, they *could* literally make the entire process form to A to Z 100% monitored... but the question then becomes "What's the return on this investment?" Is it a good investment of assets (and that's how it's framed, an investment of capital assets) to cover the entire process with CCTV or whatever, and if so, what is our return and where does the point of diminishing returns start to apply?

One that's another constant point of push-pull is maintenance.. Naturally, there's a base line that the regulators establish and that's something that all carriers must comply with.. So the costs to gain this level of compliance is, to a degree, fixed..

.. but.. it IS possible for carriers to do MORE than the minimums their respective regulators establish.. and in doing so, one would expect that of the benefits, one would be better reliability...

... but... again, the question has to be asked... "For the additional XXX dollars we invest into maintenance above what's required, what's the improvement in reliability going to be, and from improvement, how much can we expect to recover in smaller/fewer claims and irrops costs... and is that improvement "enough" to justify the added costs..

So, I think that yes, these claims *can* have an impact on fares... but I also think that carriers do have some tools at their disposal to help minimize them.. however, I think the realization has to be made of "What's the return on our investment going to be?"

I do think as a "base" rule, that added regulation tends to have a cost added impact, not cost minimization impact... but each one is it's own unique event.

Travel Safe,

Manchester, United...
posts: 338
reviews: 8
7. Re: EU 261 - Airlines reject 95% of claims

I am surprised that more than 95% are not rejected!

Ryanair are more difficult than most from which to extract compensation as they have no UK 'place of business' on which court claims can be served or enforced, meaning claimants have to either make the claim at Swords county court in Dublin or forego the compensation claim.

The Reg was introduced as the EU recognised the wholly one-sided nature of airline CoCs and attempted to redress the balance. That balance it could be argued may have gone a few degrees too far but with a revamp in the offing some of those degrees will be altered. Precedent case law decisions will be included, however.

Edited: 6:46 am, October 27, 2012
australia
posts: 2,551
reviews: 17
8. Re: EU 261 - Airlines reject 95% of claims

Thank you Leicslad and others...would like to see the actual statistics though

Detroit, MI
Destination Expert
for Detroit, Travel Gadgets and Gear
posts: 5,020
9. Re: EU 261 - Airlines reject 95% of claims

I have never liked this rule for two reasons. First, it acts much like insurance. Everyone pays a little so that a few can get a big check when something goes wrong. Add in some extra bureaucracy to administer the program, and everyone pays a little more even if there is never a flight delay.

Second, it could entice airlines and crews to fly aircraft that are not safe or push crews to bend the rules on things like rest breaks. Does the airline take the delay and pay out 180,000 Euros to those 300 passengers, or do they fly the plane with a hydraulic leak - there are backup systems after all. Does that pilot call in sick when he is not feeling well, or does he operate the aircraft anyway even though he has the flu, fever, chills, etc?

Aircraft are incredibly complex and safety margins are minimal - there will always be unscheduled mechanical delays.

Edmonton
posts: 7,185
reviews: 14
10. Re: EU 261 - Airlines reject 95% of claims

I think 261 is not very customer friendly. I'm with tev9999 that people shouldn't get compensated at a specific $ value. I they only paid $50, why have them compensated for 6x that. And it will drive fares up, so to appease a few people , everyone should have to pay a higher premium.

Good call on this one. Seriously, since when does a 6 hour delay require you to get a windfall???

And if you miss your cruise, bus tour, etc., that is totally on you for either not leaving to go the airport early enough or not booking with the cruise line for the air( then it is their responsibilty or buying the insurance that would cover this kind of thing.

I