Important CJEU judgement for holidays abroad: compensation may be available for delays of connecting flights to non-EU countries

The Court of Justice of the European Union (the "CJEU") has delivered an important judgment on Regulation (EC) No 261/2004 establishing rules on compensation and assistance to passengers in the event of cancellation or long delay of flights (the “Compensation Regulation"). The recent judgment is based on a flight of three passengers in 2018 from Brussels to San José (with a connection in Newark), where they arrived more than three hours late. Interesting point of the case, that the passengers flew from Brussels to Newark with Lufthansa and from there with United Airlines. The delay occurred on the latter (intra-US) section.

After lengthy exchanges of correspondence, the applicants asked a Belgian court to order United Airlines to pay compensation of €600 per person for the delay, totaling €1,800. In particular, United Airlines contested the applicability of EU law to the delay of a flight within the US, even if the passengers had originally departed from Brussels on a Lufthansa flight.  

The Brussels court has asked the CJEU for a preliminary ruling on whether a passenger in entitled to compensation from a non-Community air carrier if the delay occurred during a part of the flight that does not involve a Member State. Another important question raised by the Brussels court was whether the Regulation is contrary to international law.

In the course of its proceedings, the CJEU concluded that the Compensation Regulation is applicable even if passengers depart from an airport in an EU Member State and their journey includes a transfer on the territory of a third country. It is also irrelevant that the air carrier operating the second leg is not an EU air carrier if the journey involving one or more connections is made on the basis of a single reservation, because passengers’ right to compensation is uniform. The Court held that the place where the delay occurs and the number of transfers have no bearing on the applicability of the Regulation.

The CJEU explained that only a company that can be considered an ‘operating air carrier’ within the meaning of the Regulation can be liable to pay compensation. The two cumulative conditions of which are the operation of the flight and the existence of a contract with the passenger. In the case at issue, the connecting flight concerned was operated by United Airlines, which has a contractual relationship with Lufthansa, which has a contractual relationship with the passengers, since the reservation was made through Lufthansa's system.

The Court held that United Airlines is an 'operating air carrier’ within the meaning of the Regulation and that a passenger has the right to claim compensation from it even if the delay occurs on a flight operating exclusively on the territory of the United States.

With regard to the infringement of international law, the Court pointed out that the Regulation requires a close connection with the territory of the European Union, such as a journey departing from an EU Member State. The Regulation would not be applicable, and consequently, compensation could not be claimed, only if the flight in question had no connection with the EU. However, in the present case, since the US flight was connected to a flight departing from the EU and received passengers transferring from the EU, the European Union’s jurisdiction could be established.

The recent judgment, therefore, extends the right to compensation under the EU Regulation to air journeys where the damage (e.g. a significant delay) occurs during a multi-stage, connecting flight from the EU to a third country on a flight operated by a non-EU airline 

Authors: Dr. Dániel Balázs and Dr. Dóra Katalin Kuti

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