Aviation Law
November 25th, 2024
Case Overview
The plaintiff is demanding compensation from the airline under Regulation (EC) No. 261/2004 through assigned rights. The passengers had booked a flight from Stuttgart to Hamburg on February 27, 2020, at 6:15 p.m., which was canceled by the airline due to a snowstorm in Stuttgart. This weather event led to delayed slots from air traffic control at Stuttgart Airport, causing substantial delays throughout the airport. With specific reference to this flight route, the airline canceled the rotation as weather conditions on preceding flights and resulting slot delays, combined with flight restrictions due to night curfews, prevented timely operation of the Hamburg flight. This decision was made to ensure that the aircraft could carry out its scheduled flights from Stuttgart the next day. As a result, passengers arrived in Hamburg with a 12 hour, 44 minute delay. The district court initially awarded the plaintiff EUR 250 in compensation, but the appellate court dismissed the claim, prompting the plaintiff to file an appeal.
BGH Legal Reasoning
The BGH rejected the plaintiff’s appeal and upheld the appellate court’s decision, exempting the airline from compensation due to extraordinary circumstances. The ruling is based on Article 5(3) of Regulation (EC) No. 261/2004, which allows airlines to deny compensation in extraordinary circumstances.
The BGH determined that a snowstorm qualifies as an extraordinary circumstance under passenger rights law, as severe weather can lead to delays due to ATC-slot restrictions. Furthermore, the BGH specified that the disruptive effects of the snowstorm, which already caused delays for previous flights, may also be considered for later flights, as long as there is a direct link between the extraordinary circumstance and the cancellation. Airlines may invoke extraordinary circumstances when deciding to cancel certain flights to avoid further delays across the entire schedule. Accordingly, the judges not only consider the individual flight but the entire airline’s flight schedule. The ruling explicitly states, “An airline is not required to operate all scheduled flights without regard for consequences as long as they are feasible; instead, it may seek ways to minimize disruptions caused by extraordinary circumstances on the affected aircraft’s operational mode.”
The court emphasized that airlines have discretion in canceling flights when extraordinary circumstances arise. This includes taking measures to minimize disruption to subsequent flights. Consequently, the BGH found the airline’s decision to cancel the Hamburg flight and the return to Stuttgart reasonable to enable scheduled flights to operate punctually the following day. Additionally, the BGH accepted the airline’s evidence of providing alternate transportation the next day to deny compensation under Regulation (EC) No. 261/2004.
Assessment
This ruling is beneficial for airlines, as it clarifies the conditions for liability exemption under Regulation (EC) No. 261/2004 in extraordinary circumstances and defines airlines’ defense options in such situations. The BGH decision grants airlines some flexibility regarding cancellations when extraordinary circumstances are present, emphasizing their ability to address future impacts on their flight schedules.
- 1. Exemption from Liability for Extraordinary Circumstances
- Article 5(3) of Regulation (EC) No. 261/2004 provides that airlines are exempt from compensation obligations when unavoidable extraordinary circumstances arise, even if all reasonable measures were taken. The BGH clarifies that a snowstorm constitutes an extraordinary circumstance if it directly impacts flight operations, as it did here by delaying ATC slots. Extraordinary circumstances are determined by natural events and weather, such as snowstorms or strong winds, which cause delays and disruptions that cannot be avoided through reasonable precautionary measures. Additionally, capacity restrictions at airports and slot management disruptions are relevant factors in these cases; airlines are dependent on assigned ATC slots, which can be heavily impacted, quickly affecting the entire schedule and preventing timely flight operations.
- 2. Discretion in Cancellations
- The BGH ruling highlights that airlines have a degree of discretion when extraordinary circumstances disrupt operations. This is critical for airlines needing to respond swiftly in crisis situations, such as snowstorms or natural disasters, to mitigate further operational disruptions. In this case, the airline canceled the Hamburg flight and its return leg to Stuttgart to ensure the aircraft could depart punctually the next day. However, an airline cannot cancel flights simply to free up space for other passengers; this would be impermissible under Regulation (EC) 216/2004 and EU Court of Justice case law. The BGH emphasizes that airlines have a limited but essential discretion to stabilize operations under extraordinary circumstances.
The BGH applied the following assessment criteria:
- Proof of Extraordinary Circumstance: The airline must demonstrate that an extraordinary circumstance exists. In this case, the airline successfully showed that a snowstorm disrupted flights throughout the day.
- Link between Extraordinary Circumstance and Cancellation: A causal connection must exist between the extraordinary circumstance and the flight cancellation, especially when disruptions occur during earlier flights, forcing the airline to prioritize certain flights.
- Balancing and Minimizing Operational Impact: The airline must take reasonable measures to mitigate the impact of the circumstances on all passengers. The BGH highlights the need to consider the “operational mode” of the airline, meaning airlines may consider disruptions in the context of their overall operations.
- Feasibility of Alternatives: The airline must assess alternatives, such as re-routing passengers on other flights or deploying a replacement aircraft. In this case, the airline demonstrated that there were no faster travel options for passengers to reach Hamburg.
Conclusion
This ruling primarily addresses situations where extreme weather events affect overall flight operations. The scope of discretion focuses on unforeseen natural events impacting multiple flights. The BGH decision strengthens airlines’ positions by expanding their operational flexibility and discretion during extraordinary circumstances. The ruling reflects an understanding of airlines’ “operational mode” and clarifies the conditions under which airlines are exempt from compensation obligations. It acknowledges operational realities during major disruptions and provides airlines with valuable guidance for crisis management in similar situations, enabling them to stabilize operations and minimize the impact of extraordinary circumstances.
The “American Airlines” Decision of the ECJ from October 6, 2022 (case no.: C-436/21)
Let’s take a look back: In the “American Airlines” decision, the ECJ ruled that a single booking exists even if a travel agency combines flights from different airlines into a single reservation, charges a total price, and provides a single ticket. Crucial to the court’s reasoning was that it did not matter whether the airlines had a contractual relationship. Rather, the single ticket alone entitled passengers to a continuous transportation right. The ECJ concluded that a single booking or a flight with “direct connecting flights” under Art. 2 lit h) of Reg. (EC) 261/2004 exists if two or more flights are part of a single booking.
Implications for Airlines
The American Airlines decision poses new challenges for airlines when dealing with flights sold by OTAs as connected journeys, even though the airline only operates a portion of the route. One issue in particular is that airlines are often unaware of the additional flights OTAs combine into a “whole” journey through virtual interlining. In these cases, airlines only issue booking numbers for their own flights, while OTAs provide their own “internal” reference number, which typically doesn’t match the airline’s issued booking numbers. This lack of transparency can lead to airlines being held liable unexpectedly. Some OTAs’ terms and conditions at least clarify that certain flight combinations should be considered separate, but this is an exception. Passengers generally have limited awareness of how these details affect their rights in the event of flight disruptions.
Pre-Trial Order of the Regional Court of Landshut from October 22, 2024 – 13 S 1024/24e (Unauthorized Agency)
In October 2024, our Aviation Team could demonstrate in several passenger rights cases that OTA bookings often fail to meet the quality of a “single booking” as defined above.
In a pro-airline pre-trial order from the Regional Court of Landshut, a single booking was rejected in an appeal process. A leading passenger rights portal’s claim for compensation for a flight from Munich to Palma de Mallorca was dismissed in the first instance. The Erding Local Court rejected the claim as it did not recognize the booking confirmation issued by an OTA as a confirmed booking under Reg. (Ec) 261/2004. According to the court’s findings, the booking had been issued by an unauthorized travel agency. No cooperation between the agent and the airline or confirmation of the booking by the defendant could be proven.
The Landshut Regional Court agrees and intends to dismiss the portal’s appeal, noting that an OTA invoice alone does not constitute a “confirmed booking.” An invoice merely reflects the information provided by the issuer. Actions of a third party are, therefore, generally not a clear indicator for a booking confirmation. Furthermore, the court noted that the plaintiff’s reference to the above ECJ ruling does not apply, as it involves a different context: the unauthorized agent does not qualify as a “travel company” under the ECJ definition.
Judgment of Local Court of Königs Wusterhausen (Berlin) of October 11, 2024 – 200 C 54/24 (Invalid “Screen-Scraping” Bookings)
In another related case before the Local Court of Königs Wusterhausen (Berlin), the claim was denied because the passenger rights platform could not prove that the flights from Berlin via Barcelona to Porto were facilitated by an OTA as a single booking. The submitted booking documents included two different booking codes, of which only one could be assigned to the airline we represented. This contradicts German Federal Supreme Court (BGH) and ECJ case law, which requires one booking code for a single booking.
Moreover, the court noted that the OTA repeatedly informed passengers (e.g. in the booking confirmation) that these were separate tickets. Consequently, each ticket required individual check-in, and through-checked baggage was not possible. This was also clearly communicated in the OTA’s terms and conditions, which the court found to preclude a single booking.
The court further noted that the OTA used the so-called “screen-scraping” method, which simulates a booking by a regular passenger, without using the airline’s authorized booking channels for agencies. Therefore, according to the court, the intermediary was not authorized to make an official booking on behalf of the airline.
Judgment of the Local Court of Hannover from September 26, 2024 – 540 C 3176/24 (Lack of Jurisdiction)
In another case, our Aviation Team successfully argued for the dismissal of a claim by the Hannover District Court due to a lack of jurisdiction, given the absence of a “single booking”.
The case involved multiple flight segments from Hannover via Palma de Mallorca to Malaga. The court found that it lacked both local and international jurisdiction, as claims under the Reg. (EC) 261/2004 fall under the jurisdiction of the courts at the port of departure or arrival. In this instance, the claim involved a disruption on the onward flight from Palma de Mallorca to Malaga, so the court held that Spanish courts would have jurisdiction, as the existence of a single booking was denied.
Concluding Remarks
The ECJ case law on “single bookings” and “direct connecting flights” underscores the growing challenges airlines face in a booking environment shaped by OTAs. Airlines should be aware that, in certain situations, they could be held liable for flight disruptions beyond their control.
The recent judgments achieved by our firm demonstrate that, despite the ECJ decision, German courts remain open to the argument that an airline’s liability can be limited to the flight it actually operated or intended to operate (in the event of a disruption). OTAs that independently combine flights do not automatically establish a legal basis for continuous airline liability.
Developing a clear defense strategy is crucial, based on a detailed analysis of booking processes, OTA terms, and a careful review of booking documentation and specific contractual relationships between airlines and OTAs.
As a law firm specializing in aviation law, we support airlines in defending against unjustified passenger claims. Our expertise and recent court successes demonstrate that a well-founded defense strategy not only saves costs but also enhances legal certainty for all involved. Please feel free to contact us!
Source
Federal Court of Justice, 24.09.2024, file:. X ZR 136/23
