Regulation 261/2004 on common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights continues to trigger litigation in the highest Member State courts. A clear pattern has begun to emerge: following on from an airline’s persistent refusal to comply with compensation or care obligations, a preliminary reference indirectly challenges the validity and / or scope of the Regulation. The Court’s answer is nearly inevitably in favour of the passenger, confirming the validity of the Regulation and purposively interpreting its terms.
Facts and Questions Referred
Mr and Mrs Folkert had booked flights departing Bremen, Germany at 6:30 am, with a scheduled arrival time of 11:30pm in Asunción, Paraguy. Their initial flight was delayed by just under 2,5 hours, but due to two missed connections in Paris and São Palo this resulted in an overall arrival delay of 11,5 hours. The Folkerts brought what might appear (by now) to be a relatively straightforward claim for €600 in compensation pursuant to Article 7(1)(c) of the Regulation (flights in excess of 3,500km distance). Indeed, their case plainly falls within the ECJ’s previous ruling in Case C-402/07 Sturgeon that
passengers whose flights are delayed may rely on the right to compensation laid down in Areticle 7 of Regulation No 261/2004 where they suffer, on account of such flights, a loss of time equal to or in excess of three hours, that is to say when they reach their final destination three hours or more after the arrival time originally scheduled by the air carrier .
Having lost both at first instance and on appeal, Air France brought a further appeal before the German Federal Court, alleging that the right to compensation in Article 7(1) could only apply to situations where both arrival and departure were delayed beyond the relevant limits laid down in the Regulation. Considering these questions not to be settled by Sturgeon, the German court enquired whether compensation for late arrival under Article 7(1) additionally required that the departure of the flight was already delayed beyond the limits set out in Article 6(1), viz four hours for the flight distance in question.
The Court first set out the two different types of delay referred to in the regulations: departure delay (for example for purposes of assistance under the Article 9 ‘Right to Care’), and arrival delay (for example as a result of cancellation – Article 5(1)(c)(iii)). For purposes of Article 7, the latter was to be the relevant interpretation:
 Since [the relevant] inconvenience materialises, with regard to delayed flights, on arrival at the final destination, the Court has held that a delay must be assessed, for the purposes of the compensation provided for in Article 7 of Regulation No 261/2004, in relation to the scheduled arrival time at that destination […].’
In order to forestall further arguments, the Court went on to add at paragraph  that
‘The concept of ‘final destination’ is defined in Article 2(h) of Regulation No 261/2004 as being the destination on the ticket presented at the check-in counter or, in the case of directly connecting flights, the destination of the last flight.’
Any other outcome, the Court suggested in line with previous decisions, would constitute an unjustified difference in treatment of passengers, as those arriving on the same delayed flight could find themselves subject to different regimes, depending on the circumstances of the first leg of their journey. The financial consequences for airlines, even if significant, could not be considered as an obstacle to this finding. They were, first, not disproportionate in the light of the overarching aim of consumer protection and, second, likely to be mitigated by a range of factors: carriers could rely on an extraordinary circumstances defence where the long delay or cancellation was beyond the air carrier’s actual control, the relevant fines could be reduced by 50% under certain circumstances, and operators were in any event free to seek compensation from third parties which might have caused the delay.
Within the Regulation’s system of passenger rights as interpreted in Luxembourg, the judgment is correct. Departure delay is quite different from arrivals delay; indeed, one can easily envisage a scenario where passengers are subjected only to the former without any resulting inconvenience. The inclusion of connecting flights in the scope of 261/2004 is particularly important: evidence presented by the European Commission  shows the high volume of such flights within the EU. Multi-leg itineraries are furthermore integral to intra-Union competition as carriers offer inexpensive connections in order to break into different Member State markets.
The real significance of the Folkerts decision, then, can only be understood against its broader context. As suggested in industry literature, the case was as yet another challenge to the Regulation’s remedial regime, and the Sturgeon decision in particular: the latter case had (in-) famously extended financial compensation rights to delayed passengers, even though Article 7(1) as drafted only envisaged such payments in case of flight cancellation. In October 2012, the Court confirmed its earlier jurisprudence in joined Cases C‑581/10 and C‑629/10 Nelson and TUI Travel plc; a sudden change of tack in Folkerts was therefore highly unlikely.
These observations should not necessarily be taken as an assertion that the current state of the law in this area is entirely satisfactory. A recent Commission proposal for an updated Regulation 261/2004 (for a full discussion of the proposed changes, see this post) will undoubtedly trigger extensive discussion in in the European Parliament as well as Member State Parliaments, accompanied by significant lobbying efforts from airlines and consumer groups alike.
The preliminary reference procedure under Article 267 TFEU, on the other hand, is not an appropriate forum to settle potentially contentious issues. Indeed, the outcome of repeat challenges has been the opposite of what the aviation industry might have hoped for. Over the past few years, the Court has built up robust case law on Regulation 261/2004. Several issues that had originally been perceived as rather controversial have become firm orthodoxy – notably the regime’s uneasy relationship with the Montreal convention [Folkerts 31], and the validity of Sturgeon itself.
Fellow, St John’s College, University of Oxford