UK Moves against Ryanair for Pax Compensation Violations

 - December 5, 2018, 11:17 AM
Ryanair claims EU regulations do not prescribe passenger compensation in the event of a strike. (Photo: Ryanair)

The UK Civil Aviation Authority launched an enforcement action against Ryanair on Wednesday, following the airline’s failure to pay compensation to passengers under European Commission Regulation 261/2004 for flight disruptions resulting from pilot strikes over the summer.

Ryanair passengers have issued claims for compensation directly to the airline, but the airline rejected them, said the CAA in a statement. Passengers can and have, as allowed by UK law, escalate their complaints to AviationADR, a body approved by the CAA to provide alternative dispute resolution for passenger complaints. 

Ryanair has since informed the CAA that it has ended its agreement with AviationADR. As the CAA said at the time of the industrial action, the strikes did not amount to “extraordinary circumstances” and therefore weren’t exempt from passenger compensation rules.

As a result of Ryanair’s action, passengers with an existing claim will now have to await the outcome of the CAA’s enforcement action.

For its part, Ryanair points to rulings in three European countries that strikes at airlines based there did, in fact, constitute extraordinary circumstances. “Courts in Germany, Spain, and Italy have already ruled that strikes are an “extraordinary circumstance” and EU261 compensation does not apply,” said Ryanair in a statement to AIN. “We expect the UK CAA and courts will follow this precedent.”

Ryanair also cited a research note from Irish investment banking firm Goodbody highlighting those rulings. “We note the Barcelona Court decision in October, which noted no compensation is due to customers whose flights are canceled due to an internal strike,” said Goodbody. “Similarly, in the past, Lufthansa [was] not obliged to pay EU261 allowances when pilots [struck] for 15 days. Further to the UK CAA action against Ryanair, we note no action was taken against British Airways during its staff strikes last year."

However, Goodbody also noted that the UK enforcement action would overshadow the positive development on Tuesday regarding a new agreement reached between Ryanair and the VC pilots union in Germany. The sides expect to sign a four-year labor agreement by the end of March, until which time the pilots have agreed not to strike.