The following article was first seen in ABTA's Travel Law Today Autumn 2018 edition and written by Sue Barham, Consultant, HFW and Rupali Sharma, Associate, HFW.

Flight disruption due to industrial action whether by airlines, air traffic controllers or others is often in the news. Redeploying staff to cabin crew duties can help airlines counter the effect of strikes within their own workforce but, when pilots take industrial action, or flights simply cannot operate due to air traffic control strikes, disruption to passengers’ journeys becomes inevitable. What rights does a passenger have when theirs is the flight affected?

The key to understanding passenger rights in these circumstances lies, as ever, with EC Regulation 261/2004 on denied boarding, cancellations and long delays (EC261). The starting point is that passengers are entitled to:

• Fixed rate compensation between 250-600 Euros depending on the distance of their flight (Article 5(1)(c), unless the cancellation is caused by “extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken” (Article 5(3));

As well as this compensation for cancellations, travellers are also entitled to:

• A choice between being re-routed (as early as possible or later, at their convenience) or receiving a refund of what
  they paid for their cancelled flight (Article 8); plus
• If passengers choose the early re-routing option, the airline must provide refreshments, assistance and overnight
  accommodation where required (article 9).

Two other preliminary points need to be kept in mind.

First, compensation is not payable in all cases. If an airline can give two weeks’ notice to passengers of a cancellation, or can offer a re-routing that does not differ too much in terms of departure and arrival times from the cancelled flight, no compensation is payable. So, if there is adequate advance notice of strike action, a major impact of EC261 can be avoided. For delays, compensation is only payable if the passenger’s arrival at the final destination is delayed by three hours or more.

Secondly, the airline’s obligations under Article 8 in relation to offering re-routing/refunds, and Article 9 in relation to assistance, are absolute and apply regardless of whether a defence of “extraordinary circumstances” is available, and whether advance notice is given to passengers. Airlines face the very real threat of enforcement action by regulatory authorities (the CAA in the UK) if they fail adequately to meet those obligations. In the UK the CAA generally pursues civil rather than criminal enforcement action where necessary. This entails the use of undertakings from an airline, publicised online and potentially backed by a court order. Where an airline fails to offer a re-routing option and a passenger incurs costs in making their own alternative arrangements, the airline may be liable to reimburse those expenses. Airlines therefore ignore the Article 8 obligations at their peril.

The main source of uncertainty concerning strike action is whether the defence of extraordinary circumstances can be used to avoid paying compensation. This varies from jurisdiction to jurisdiction. Generally, strikes outside of an airline’s own workforce will constitute extraordinary circumstances on the basis that these are genuinely outside the airline’s control. However, where the strike is by the airline’s own staff, the position is less consistent and differs between EU Member States. For example, in Italy and Belgium, strikes are generally extraordinary circumstances. In the UK, this has been the case but the ground may be shifting. For example, although the recent Ryanair pilot and cabin crew strikes have not involved Ryanair’s UK employees, the CAA has taken the position that an airline must pay compensation to passengers for cancellations due to strikes by the airline’s employees. Such views of national enforcement bodies, such as the CAA, do not bind the courts. They do, however, give some sense of the possible direction of travel on the question of an airline’s liability for strikes within its own workforce. In other jurisdictions, such as Spain, Netherlands and France, the courts have been clear that such strikes attract EC261 liability to pay compensation. Overall, the airline’s legal position depends very heavily on where claims are brought.

Conversely, there has been much more consistency across courts in EU Member States in relation to wildcat strikes by airline staff. By definition, and in contrast with official balloted strikes, these tend to be sudden, unofficial and without any significant advance notice such that there is little, if anything, an airline can do to prevent such action leading to flight delays and cancellations.

However, the position as to whether a wildcat strike will attract EC261 liability to pay compensation has been muddied by the CJEU case of Krüsemann and Others v TUIfly GmbH (C-195/17 and others) in which the CJEU held that a wildcat strike of a significant number of the airline’s flight crew who placed themselves on sick leave following a surprise announcement of a restructuring, did not constitute extraordinary circumstances, and that air carriers “as a matter of course...face disagreements or conflicts with all or part of their members of staff”.

When determining whether strike action is an extraordinary circumstance, the test is still whether the strike action:
(1) by its nature or origin, is inherent in the normal exercise of the activity of the airlines; and
(2) is beyond the carrier’s actual control?

In Krüsemann, the court considered that the wildcat strike was not beyond the control of the carrier, as it stemmed from the announcement made by the airline and could have been – and indeed was – resolved by the airline reaching an agreement with its own staff. 

It is unclear at this stage whether this recent judgment will have a wider impact upon the hitherto fairly consistent view that passengers are not entitled to EC261 compensation in relation to wildcat strikes of airline staff and/or lead to a more consistent view across EU Member States as to whether official strikes are defendable or not. It appears there may have been specific factors that persuaded the court that the circumstances leading to the strike, and the means of resolving it, should be regarded as within the airline’s control (the strike was said to have ceased following an agreement concluded with staff representatives). Nonetheless, the Krüsemann judgment is the latest in a long line of CJEU judgments that confirm that the focus for the courts in applying passenger rights regulation is very much pro-consumer