Passenger Litigation: Are ECJ decisions always detrimental to airlines? A new angle on the involvement of OTAs, single booking and the ECJ’s American Airline decision

It is daily practice for so-called Online Travel Agencies (hereinafter: OTAs) to combine flights of different airlines and sell them to passengers. Passengers are made to believe that they are traveling on a connected journey, also by paying a total price to the OTAs. In fact, OTAs combine connections and routes that do not exist as connecting or transfer connections. In this way, they create offers that are not available on the market from the respective airlines. The question is whether this constitutes a single booking – a term which, according to the case law of the ECJ, can lead to passengers being granted a single compensation claim against one of the airlines involved. However, the passenger can also book these flights with the various airlines themselves, whereby nobody would think of this as a single booking. Rather, it would be obvious that these are separate bookings with different airlines.

The ECJ – on the basis of the definitions of the terms “final destination” in Art. 2 lit. h) and “reservation” in Art. 2 lit. g) of Regulation (EC) No. 261/2004 – adopts the passenger’s perspective by stating that direct connecting flights exist if they were the subject of a single booking. In case C-436/21 of October 6, 2022, decided by the ECJ, a travel agency had issued the passenger with a single electronic ticket for three consecutive flights, whereby this ticket only identified a single service provider and indicated a single “Filekey” as the booking number, which referred to the entire journey. In addition, a total price was charged. These factors led the ECJ to assume a single booking.

This single booking can have various effects: The combination of several routes from different airlines increases the distance relevant for calculating the amount of compensation according to the great circle calculator method. As a result, an airline must pay compensation for a route on which it did not carry the passengers. In doing so, the airline assumes liability for a situation that it did not create itself, thereby effectively and involuntarily relieving the competitor of its liability. Furthermore, the airline may have a passive legitimacy in legal proceedings, as the final destination on which jurisdiction is based is now a destination to which the airline does not fly.

In court practice, the American Airlines decision is often disregarded on the basis of a strict consumer perspective, by overlooking the details of the ECJ’s decision. If the passenger has a “receipt” from an OTA on which the individual flights are shown at a total price, the courts do not take into account the fact that this “receipt” does not constitute a booking or a ticket within the meaning of Regulation (EC) No. 261/2004. Nevertheless, the courts assume a “single booking” in the literal sense. In the rarest of cases, they thoroughly examine the requirements of Regulation (EC) No. 261/2004. A booking within the meaning of Art. 2 lit. g) of Regulation (EC) No. 261/2004 requires that the ticket or other proof was issued by the air carrier or the tour operator. This is not the case in the OTA cases, as the OTAs are not tour operators within the meaning of Art. 2 lit. d) of Regulation (EC) No. 261/2004. Furthermore, the ticket issued by the OTA does not generally constitute a ticket within the meaning of Art. 2 lit. f) of Regulation (EC) No. 261/2004, as this in turn must have been issued by the air carrier or its authorized agent. However, the OTA is rarely authorized by the respective airline and acts as an agent for it.

However, it is precisely these subtleties that matter. They are also reflected in the ECJ’s American Airlines decision. The ECJ states that the ticket only contained a single booking number, which the ECJ refers to as a “Filekey”, and a single service provider (= airline). Apparently unaware of the term “Filekey”, the lower courts often ignore its definition and argue that the OTA issues a single transaction number, which satisfies the requirements of case law. However, this overlooks the fact that this transaction number is an internal reference of the OTA, which is not a booking number that enables the airline to allocate it to a specific booking. “Filekey” is a synonym for PNR which stands for ‘Passenger Name Record’. It is therefore the airline’s transaction number, i.e. the familiar six-digit booking number. In the case of OTA-related matters, the document issued by the OTA shows the respective flights, and also contains the respective booking numbers of these flights. In addition, the OTA also provides its own transaction number, which is not a 6-digit PNR. In its decision of June 20, 2023 (case reference: X ZR 84/22), the Federal Court of Justice (BGH) also differentiated between the PNR on the one hand and the OTA’s transaction number on the other and noted that the presence of different PNR codes on the receipt issued by the OTA would argue against a single booking.

The total price shown on the receipt issued by OTA does not change this assessment. It is true that this circumstance is addressed in the American Airlines decision. Initially, however, this was only one aspect of a total of three aspects that the ECJ found in the actual examination of whether a ticket with a single booking existed. However, the question arises as to whether there was only this one total price or whether the respective individual prices of the receptive flights were also shown. The decision does not contain any findings in this regard. However, this is the case at least for the usual OTA issues. Although the OTAs also show a total price in their receipts, this total price is nothing more than an arithmetic result to which the individual flight prices were added. Of course, the passenger is supposed to make a (uniform) payment to the OTA.

If you take a closer look at the American Airlines decision, you get the impression that a classic travel agency was involved here and not a typical OTA situation in which an OTA combines flights on its own without the knowledge of the respective airlines. If the specific facts of the case are applied consistently and these details are brought to the attention of the respective national courts, the American Airlines decision should have lost its alarming nature and actually lead to an appropriate solution.

However, it is up to the airlines to present these facts to the court in a comprehensive and timely manner. It may also be helpful to show that the OTA arranged the specific flight without the airline’s knowledge. Even if the airline has general knowledge of how an OTA works, this does not mean that it also has knowledge of the specific travel planning for the respective passenger. There is also no indication in the airline’s system that the booking made by the OTA contains another – let alone which specific – flight. And even if an airline cooperates with an OTA as its authorized agent, this authorization does not usually include the right to combine its own offer with the offer of other airlines. Nor can it be assumed that the OTA is also an authorized agent of the other airline involved. Thus, the respective airline has a good reason to design its route and connection offerings in such a way that the “connection” offered by the OTA does not exist.

In summary, it should therefore be emphasized that with regard to the involvement of OTAs in the booking process, a high level of detail and knowledge of the facts is necessary in order to obtain appropriate results in court. If the airline is prepared to provide this level of detail in every case, it will be able to convince the court in this complex matter with its multi-layered aspects.

On a positive note, a close reading of the American Airlines decision shows that the ECJ has not lacked this level of detail. If well-prepared proceedings and carefully selected facts are brought before the ECJ, its case law can contribute to the appropriate clarification of many questions. This can then be used as a basis to increase efficiency in the management of passenger claims.