Monday 19 February 2018

Airfares likely to rise as Ryanair loses volcano case

Ryanair CEO Michael O'Leary
The volcano at the Eyjafjallajokull glacier in Iceland
John Mulligan

John Mulligan

AIR FARES are set to rise after a Dublin woman won a case against Ryanair which will force airlines to pay out compensation to passengers for costs such hotel rooms if their flights are delayed due to "extraordinary circumstances" .

The European Court of Justice ruling – which has major implications for airlines throughout Europe – hinged on a case brought by Denise McDonagh against Ryanair.

She sued the carrier in 2010 in Dublin seeking reimbursement of €1,129 in costs she incurred when she was forced to prolong her stay in Faro, Portugal, after the Icelandic volcano Eyjafjallajokull erupted. Swathes of airspace across Europe were closed – including Irish skies – over fears that volcanic ash could pose a threat to air safety.

Ms McDonagh was forced to remain in Portugal for a week more than intended due to the airspace closure.

She claimed Ryanair was in breach of contract for failing to provide assistance to her under EU Regulation 261. The carrier insisted it shouldn’t be made liable for the impact of what it said were more than extraordinary circumstances.

But the European Court of Justice this morning said that airlines must provide care to passengers in such circumstances. It said that, contrary to what Ryanair claims, the scope of such care cannot be restricted either from a time or financial point of view.

Ryanair warned that airfares will increase on foot of the court ruling and said the decision allowed passengers to claim for flight delays which were clearly and unambiguously outside an airline's control.

The court recognised claims could have "substantial negative economic consequences" for airlines, but said a high level of protection must be afforded to passengers.

"The importance of that objective may justify even substantial negative economic consequences for certain economic operators," the court said.

But airlines could pass on such costs in increased ticket prices.

"In addition, air carriers should, as experienced operators, foresee costs linked to the fulfilment of their obligation to provide care," the judgment said.

"Furthermore, they may pass on the costs incurred as a result of that obligation to airline ticket prices."

When government closed most European airspace unnecessarily due to non-existent ash clouds, travel insurance companies had escaped liability by claiming it was an act of God, said Ryanair.

“Today's ruling by the European Court now makes the airlines the insurer of last resort even when in the majority of cases (such as ATC delays or national strikes in Europe) these delays are entirely beyond an airline's control.

"Today's decision will materially increase the cost of flying across Europe and consumer airfares will increase as airlines will be obliged to recover the cost of these claims from their customers, because the defective European regulation does not allow us to recover such costs from the governments or unions who are responsible for over 95pc of flight delays in Europe."

Ryanair already charges a special levy on all flights to cover its obligations under the EU 261 regulation.

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