Passengers’ right to compensation when pre-emptively denied boarding

Introduction

In ‘FW v LATAM Airlines Group SA’, decided on 26 October 2023, the European Court of Justice (“ECJ”) delivered a preliminary ruling in relation to the rights of passengers pre-emptively denied boarding a flight they had booked. The request for a preliminary ruling concerned the interpretation of the provisions of Regulation (EC) 261/2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights (the “Regulation”).

Background

The referring case involved an individual (“FW”) who had booked a round-trip flight with Latam Airlines between Frankfurt and Madrid. The outward flight was scheduled for 22 December 2017 and the return flight for 7 January 2018. On 21 December, FW tried but could not check-in for the outward flight and reached out to Latam Airlines only to be told that the reservation was amended and transferred to a flight the day before, 20 December. Latam Airlines did not inform FW of this change. Since FW had missed their outward flight, they were barred from the return flight on the ground that they had not taken the outward flight. FW quickly proceeded to buy separate tickets with another air carrier and subsequently sued Latam Airlines for damages and for compensation under the Regulation.

A local court ordered Latam Airlines to pay FW damages and EUR 250 as compensation for the outward flight, in line with Article 7(1)(a) of the Regulation which stipulates the standard amounts of compensation commensurate to the flight distance. It did not however, award EUR 250 compensation for the return flight, applying Article 5(1)(c)(i) of the Regulation pertaining to flight cancellations by analogy. Since FW was informed that they would be denied boarding their return flight more than two weeks in advance, then no compensation could be awarded. FW appealed this point, and the regional court referred the following questions to the ECJ:

1. 1. Does the Regulation require a passenger to present themselves for check-in or boarding at the time indicated even though the operating air carrier has already given prior notification that it does not intend to carry that passenger for the Regulation be applicable and for compensation to be possible?
   2. Do the Regulation’s respective provisions on cancellations and denied boarding mean that compensation is excluded where the passenger has been informed of the denial of boarding at least two weeks before the scheduled time of departure?

ECJ Considerations

Article 4(3) of the Regulation stipulates that “if boarding is denied to passengers against their will, the operating air carrier shall immediately compensate them in accordance with Article 7 and assist them in accordance with Articles 8 and 9”. On the other hand, Article 2(j) defines denied boarding as “[the] refusal to carry passengers on a flight, although they have presented themselves for boarding”. The ECJ examined the history and purpose of the Regulation and its predecessor Regulation 295/91 which was introduced as a reaction against the practice of overbooking, “which air carriers were excessively engaged [in]” at the time. However, under the Regulation, denied boarding is not tied to the reason underlying the carrier’s refusal to carry a passenger on a flight, and therefore the concept of denied boarding is accorded a broader scope to cover all situations in which an air carrier might deny boarding. Consequently, denied boarding includes pre-emptively denied boarding, as in the case at hand.

A literal approach to the definition of denied boarding would require passengers to present themselves for boarding. The ECJ held that this could not be applied to being pre-emptively denied boarding, due to the fact that the primary objective of the Regulation was to ensure a high level of protection for passengers. Relieving passengers of the obligation to present themselves for check-in, when they would have already been informed that they would be denied boarding, was very much in-line with the Regulation’s aim. Passengers do not need to present themselves for check-in when the air carrier has informed them in advance that they will be denied boarding, and such pre-emptively denied boarding must be compensated.

In dealing with the second question, the referring court pointed out that instances of the flight being cancelled and being informed of denied boarding at least two weeks in advance are comparable and should be treated similarly so as not to treat passengers whose flights were cancelled less favourably. The ECJ held that this principle of equal treatment could not apply when the EU legislature distinguished between the two scenarios. In its determination, the ECJ highlighted the Regulation’s objective as a justification for a broad interpretation of the rights granted to passengers and, conversely, a strict interpretation to any exception in their regard.

Since Article 5(1)(c)(i) was specific to flight cancellations, it could not be extended to instances of denied boarding, as that would reduce the scope of the right to compensation and would run contrary to the Regulation’s objective. The exception to the right to compensation in cases where passengers are informed of the cancellation at least two weeks before the scheduled time of departure, could not govern the right to compensation for denied boarding since these different scenarios are provided for separately under the Regulation. Therefore, the wording of Article 4(3) above prevails, resulting in the passengers’ right to compensation in cases of denied boarding in accordance with the Regulation’s provisions.

Concluding Remarks

This ruling reaffirms the high level of protection afforded to air passengers in instances of denied boarding and highlights the distinguishing factors between flight cancellations and denied boarding. Moreover, passengers do not need to present themselves for boarding in order to be compensated, as this would result in an unnecessary formality and adds to the inconvenience of being denied boarding and having to make alternative arrangements – contrary to the Regulation’s aim of ensuring a high level of protection for air passengers, irrespective of whether they were denied boarding or whether their flight was cancelled or delayed.

Author: Neil Zahra

Disclaimer: Ganado Advocates is responsible for contributing this law report but was not in any way involved as legal advisor for the parties in the judgment being covered in this law report. This article was first published in The Malta Independent on 24/01/2024.