The Costs of Striking

December 14, 2018

It is always stressful having a flight delayed. It is even more so when a flight is cancelled, leaving passengers stranded in a foreign country and an unfamiliar environment. This particular scenario has given rise to an interesting legal question: can a commercial airline (in this instance, Ryanair) refuse to compensate passengers when their flights have been cancelled due to substantial strikes? It also raises questions as to whether these intense strikes amount to an ‘exemption’ under EU law. 

 

 

The Civil Aviation Authority (CAA) has adopted a firm stance on the matter, arguing that passenger flights grounded by strikes must be repaid under EU law. This claim does not rely on domestic law. The particular piece of legislation concerned is Regulation 261/2004 EC. The regulation essentially establishes common rules regarding compensation to passengers in the event that they are denied boarding and/or the cancellation/long delay of their flights. The relevant provisions are articles 5 and 7. Article 5 of that regulation lays down the ground rules regarding cancellation of flights. Article 7 defines the scope of the right to compensation in such circumstances.  

 

The issue of compensation arose following severe strikes by Ryanair staff over the summer of 2018. The strikes were carried out by pilots and cabin crew over pay and working conditions, which in turn led to the cancellation of flights to destinations such as: Spain, Italy and Portugal. Understandably, customers made claims for compensation from Ryanair, although these were rejected. Ryanair has argued that the ‘exceptional circumstances’ resulted in the Regulation not being applied and, therefore, its customers were not entitled to compensation. However, it is clear from the wording of article 15 that no derogations may be permitted. As a result of the deadlock between the two sides, the CAA have brought legal proceedings against Ryanair. Whether this will get to trial stage remains to be seen; a settlement can always be reached prior to the hearing of a trial, including at the doors of the courtroom itself. Assuming that the matter does reach the trial stage, one does question what arguments would be employed by Ryanair to support its position. There have been decisions in other EU countries (namely Germany, Spain & Italy) which have ruled that strikes allow the Regulation to be disapplied. There is no obligation for the UK courts to rule in the same manner, but this may persuade the court to rule in Ryanair’s favour. 

 

However, it is important to note that these decisions do not consider a crucial Court of Justice of the European Union decision. This decision held that strikes caused by disagreements over working conditions are not extraordinary circumstances, since they are both within the airline’s control and also an inherent part of running a business. This changes the landscape for Ryanair considerably. If the UK courts were to rule against Ryanair, it could be a costly result for the airline. It is estimated that approximately 200,000 people could have been affected by these cancellations and delays. If one were to take the average payment made to delayed customers and apply it to each of these individuals, the cost could be as much as £55m. This is before considering legal fees for both sides. At present, this is speculative owing to the matter being in the early stages of litigation. As further developments are made public, a more concrete discussion of the implications can be facilitated. 

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