Financial News

  • 23 March 2012, 12:26

Ryanair Set Back In Battle Over Volcanic Ash

Ryanair may have to pay back a passenger whose flight was cancelled due to the volcanic ash cloud in 2010, after losing the latest round in its battle in the European courts to exempt airlines from claims in exceptional situations.

Denise McDonagh had claimed 1,130 euros (941) in compensation from Ryanair after her flight from Faro, Portugal, was cancelled, forcing her to pay for meals, accommodation and transport for nine days.

An advocate general at the European Court of Justice (ECJ) said airlines must offer assistance to passengers when a flight is cancelled even in the case of 'extraordinary circumstances'.

Around 20 countries shut down their airspace in April 2010 citing safety concerns after the eruption of the Eyjafjallajokull volcano in Iceland spewed ash into the air.

The case was referred up to the ECJ after Ryanair refused to pay out, saying that although it had already paid millions to affected customers, it was fighting back in the hopes that legislation would be changed.

The current EU 261 regulations, which Ryanair called "discriminating and unfit for purpose", forced airlines to reimburse thousands of passengers due to flight cancellations beyond their control, with no upper limit on claims for hotels and meals.

The budget airline's main objections to the rule are that there is no official cap on compensation from airlines in monetary value or time, while travel insurance companies can say they bear no liability for 'Acts of God'.

The ECJ official said: "The provision of care is particularly important in the case of extraordinary circumstances which persist over a long time.

"It is precisely in situations where the waiting period occasioned by the cancellation of a flight is particularly lengthy that it is necessary to ensure that an air passenger whose flight has been cancelled can have access to essential goods and services throughout that period.

"A limitation of the obligation to provide care would in some measure deprive the EU legislation of its effectiveness, since after a few days the air passengers concerned would be abandoned to their fate."

Ryanair introduced a two euro or 2 surcharge per passenger a year ago "in order to fund its costs of flight cancellations, delays and its EU261 costs in 'force majeure' cases where the airline is not responsible for either the delays or cancellations.

The final decision in the case is expected later in the year but the advice of the advocate general is followed in 80% of cases.