What would really happen if the government told airlines to behave? This

By | March 3rd, 2015

What if the federal government said “enough” and ordered the airline industry to behave? Would they comply?

I ask because we’ve had our fair share of debates on this site about government re-regulation, and specifically about introducing an EU 261-style law to the States.

For those of you just tuning in, EU 261 mandates that airlines compensate passengers when their flights are delayed. Consumer advocates say we need such a law in America. Airlines say we don’t, claiming it would increase fares. There’s no evidence to support the assertion that prices would go up.

At any rate, I thought about the issue of a careful, focused re-regulation after I heard from Corrine Plieth, who had what I believed to be a valid EU 261 claim. Last fall, her American Airlines flight from Barcelona to New York was delayed by more than 4 hours. Under EU 261, she was eligible for 600 euro compensation.

“I emailed American Airlines customer relations, as suggested by the sign posted at airline check-in, and I received no response,” she says. “I emailed again … and again. I called, was placed on hold for 40 minutes and was told that my case was under review.”

Two months later, she received the following email from American:

We are terribly sorry that we didn’t get you to your destination as planned. Regrettably, the mechanical issue with the particular airplane scheduled for your flight caused an unavoidable delay. Still, we can appreciate how frustrating it must have been to spend your time waiting for your flight to depart.

We’d like to apologize in a concrete way and have credited 7,500 Customer Service Bonus miles to your AAdvantage account to do so.

While we know you were upset with us, we are glad you took the time to write to let us know. It gave us this opportunity to express our apologies for what happened and attempt to make things up to you. Please continue to fly with us.

Plieth didn’t give up. She found an official EU complaint form, filled it out and contacted American and Spain’s airline regulators. Their response? Nothing.

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“So far, I have emailed American Airlines 10 times. Most of the time I never receive a response. American has been rude and unresponsive in this matter. Oh, did I mention I’m a member of their loyalty program and have flown over 1.5 million miles on American?” she says.

Oh, let’s not go there.

I contacted American on her behalf. Its response:

After careful review, we were unable to locate any information that would alter our original response. This was an unexpected situation and [we] took all steps technically and economically viable to prevent this delay; therefore no compensation is due under the regulation.

It’s true, there’s an exception for “extraordinary” circumstances, but in several recent court cases, those were narrowly defined. The European courts tend to classify a mechanical problem as a circumstance that is within an airline’s control, which American knows full well.

“Seems a bit dodgy,” says Plieth.

I agree.

So why am I bringing up EU 261 again? Because if we had a similar regulation in the United States, this case is a pretty good indication of what domestic airlines would do, should their passengers file a valid claim. They’d look for any loophole they could to weasel their way out of paying a claim.

I mean, think about it. Did American have to tell Plieth, or me, or the government, what the delay was? They did not. We had to take them at their word. Were they required to respond to her written complaint within a specific amount of time? Again, no. They just stalled and ignored her, by her account.

If you look at the intent of EU 261, which is enforced by Europe’s individual aviation regulatory agencies, it’s pretty simple. When an airline sells a ticket from point “A” to point “B”, it’s reasonable to assume that, barring an “extraordinary” circumstance, it will actually operate the flight when it says it will. And if it doesn’t, it has to compensate its passengers for the trouble.

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No one should have to order airlines to do this — they should do it because it’s the right thing to do.

But you know what? They probably don’t know what the “right” thing is.

And after trying to advocate for Plieth, I’m not sure they would do it, even if they did know.

Do we need our own version of EU 261 in the United States?

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  • Jack R

    I’m confused as to why you contacted American, Elliot, as opposed to the EU regulating authority for EU261. Surely the EU would be the ones that would require American to own up to their extraordinary-not-so-much circumstance and pay Plieth what she is due under European law.

  • Wilma_Betty

    I guess I’m puzzled. Does EU-261 apply to all flights originating in Europe or just flying within Europe? Also, Ms. Plieth doesn’t say if she missed a connection or was simply late arriving in New York.

    If I got compensation every time my flight was late I’d be rich. I’ve had my fair share of late flights and missed connections. I just chalk it up to the experience of travel. Not saying the airlines should gouge us, but I think people should learn to roll with the punches a little more.

  • Brooklyn

    It’s my understanding that EU 261 applies to flights that end or originate in Europe (including those of non-European airlines) and to all flights by airlines headquartered in Europe. The problem seems to be that it’s difficult for Americans to take a US airline to court in a European country.

  • John Baker

    Yes, I do think we need a version of EU261 in the US.

    In this case, I wonder why the LW didn’t contact Refund.me, one of Chris’s sponsors to handle the request instead of Chris?

  • Raven_Altosk

    Yes we do.

  • AlanBowen

    In theory EU261 should have been a real ‘game changer’ for passengers whose flights start in the EU, irrespective of which airline is involved, so AA, US, DL and UA are all caught, and flights into the EU, but only on EU based airlines. The much criticised Ryanair added 2 Euros to flights in 2010 to cover their liabilities, which are in reality a lot less than an average of 2 Euros, and guess what, they became the most successful international airline in Europe, with huge profits and no one can point to a real increase in fares, which are far more affected by simple supply and demand.

    EU261 does a lot more than compensate for delays, it offers compensation when airlines decide to overbook and cannot accommodate a passenger and imposes a strict duty of care to look after customers when there are delays, even delays outside their control such as weather and strikes or ATC problems. Some airlines embraced the rules and recognised that dealing with a customer fairly is likely to encourage them to come back, BA paid me within 10 days of contact, but many have attempted to find excuse after excuse not to. In the UK, the case reached our highest court, the Supreme Court, for the first time last October and they made it clear that mechanical failures were inherent in airline operations and three hours was a reasonable time to put things right or find a replacement aircraft, these delays were therefore not ‘extraordinary’ and therefore there was no defence to a claim. Many more airlines decided reluctantly to accept the situation but one, Jet2.com a low cost carrier, continues to refuse to pay and has, according to one source this week, already spend almost $4 million in legal fees, all to no avail, in trying to avoid liability.

    The real problem is the complete failure of the national regulators to take any action, it is for the passenger to sue and as a result a number of no win no fee companies have found a niche in the market to help passengers. It shouldn’t be necessary but any US based passengers who need help might well be advised to investigate them. They take around 25% of the claim but a family of four returning to the US might be entitled to 2400 Euros, so it is definitely worthwhile investigating further

  • JSW

    I’d rather be 4 hours late than the airline rushing to fix a mech issue so as to avoid having to compensate an entire flight, essentially making the flight free.

  • Bubbles

    What if it was 24 hours late? Assuming 4 hours might not be how you want to approach it – especially an international flight over an ocean. Will the crew go over their flyable hours? Can they find a replacement crew ASAP? Do you have meetings? Wedding? Funeral? Did the airline even try to get you someplace nearby or on another airline to get you there? When they couldn’t, did they offer you a hand in finding a hotel or get food? There’s a lot more to it than just being delayed 4 hours.

  • Michael__K

    My understanding is that most EU countries, including Spain, have “Loser Pays” court systems (the losing side generally reimburses the litigation costs) which is supposed to deter businesses from strategically disregarding laws, ignoring judicial precedents, and daring their customers to sue.

    I wonder if carriers like AA are calculating that strategic defiance pays off, because many/most customers won’t pursue their claims in a foreign country. If so, perhaps punitive enforcement measures are needed.

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