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CJEU: airlines must pay compensation if technical problems cause cancellation

Airlines face paying substantial compensation to customers for cancelled flights, after a ruling by the Court of Justice of the European Union (CJEU).18 Sep 2015

The CJEU, Europe's highest court, has ruled that airlines must pay compensation of between €250 and €600 per passenger if a flight is delayed because of unforeseen technical problems.

Dutch airline KLM had been fighting a claim for compensation from a passenger whose flight from Quito, Equador to Amsterdam was cancelled, causing a 29-hour delay.

AirHelp, a compensation claims firm, told the Financial Times that the ruling could lead to claims for around £860 million from airlines.

The aircraft was late due to what KLM said were "extraordinary circumstances", in that two defects happened at the same time. A fuel pump and a hydro-mechanical unit were both defective, and replacement components had to be flown from Amsterdam to be installed. The defective components had not exceeded their average lifetime, KLM said, and their manufacturer had not given any guidance on the age at which they might fail.

Under EU regulations, the airline would not have to pay compensation if the delay was due to 'extraordinary circumstances'. The district court in Amsterdam had passed the case to the CJEU to decide whether this applied to a technical problem that occurred unexpectedly, that was not attributable to poor maintenance and that had not been detected in regular maintenance.

The CJEU ruled that problems can only be seen as extraordinary if they "relate to an event which is not inherent in the normal exercise of the activity of the air carrier concerned and is beyond the actual control of that carrier on account of its nature or origin". This would include hidden manufacturing defects that affect the safety of flights, or acts of sabotage or terrorism, the court said.

The functioning of aeroplanes "inevitably" gives rise to technical problems, the court said, so problems that come to light in maintenance, or through failing to do that maintenance, cannot be seen as extraordinary.

Premature malfunctioning of components "constitutes an unexpected event", the CJEU said, but "such a breakdown remains intrinsically linked to the very complex operating system of the aircraft [and] no component of an aircraft lasts forever".

Preventing a breakdown is therefore within the control of the airline and is not extraordinary circumstances, the court said.

This ruling does not affect the airline's right to seek compensation from the manufacturer of the defective components, as this caused the delay, the CJEU said.

In an emailed statement, KLM said that the CJEU "has ensured clarity, for travellers as well as airlines, regarding the definition of a technical defect as an exceptional circumstance".

"KLM does everything in its power to assist its customers in the event of delays and strives to minimise inconvenience by providing care, information and, where possible, an alternative route," it said.

The UK made a similar ruling in June 2014, when the Court of Appeal ruled that delays to flights caused by technical problems with aircraft do not qualify as an 'extraordinary circumstances' on which airlines can rely to avoid paying compensation to passengers for the delays they experience.