UK flight compensation plan will slash average payouts | consumer affairs

The government’s plan to overhaul the air passenger compensation scheme has been described as a step backwards for consumers, leading to “small amounts of compensation that often won’t be worth claiming”.

Earlier this week the Department for Transport (DfT) announced it is consulting on proposals to overhaul the air passengers’ rights rules – but only for flights within the UK.

The move, described by the government as “another Brexit win”, will lead to a two-tier system, with the UK scheme operating alongside the original EC 261 rules that were adopted before Britain left the EU, and still apply to international flights in and out of UK airports. The DfT is limited in its ability to change rules around foreign flights because of the international conventions on air travel.

Currently, someone on an internal flight from Edinburgh to London is entitled to claim £220 once their flight has been delayed three hours, unless the cause was extraordinary circumstances such as bad weather. The compensation payable is fixed and is not linked to the price paid by the passenger.

Long-haul travelers on a flight from Japan to the UK are entitled to £520 if delayed four hours or more, alongside other beneficial terms such as rerouting had the flight been cancelled.

The DfT is now proposing a system akin to the train delay compensation scheme for internal flights. On the face of it, passengers could be better off as partial refunds would start at only one hour’s delay. However, the sum paid is related to the fare.

The proposed scale is:

One hour to 1hr 59min: 25% of the ticket price.

Two hours to 2hr 59min: 50% of the ticket price.

Three hours and above: a full ticket refund.

The change would mean a passenger who had paid £50 for a domestic flight would receive £12.50 back after a 90-minute delay. It is unclear whether the “fare paid” would include any extras such as luggage payments but it is likely it would.

Currently, that same passenger would get nothing until a delay of three hours, when they would receive £220.

It is unclear whether the ‘fare paid’ would include the extras such as luggage payments. Photograph: Amer Ghazzal/Rex/Shutterstock

The government has not said whether the extraordinary circumstance get-out would still apply. Most train operators provide refunds for delays that are beyond their control but airlines are subject to far more outside influences, such as air traffic problems, and would probably resist having to pay out where they were not at fault.

At the same time, the DfT has proposed that all airlines must sign up to an aviation alternative dispute resolution scheme. This, it claims, would make it easier for passengers to escalate complaints without the need to go to court, although this has a distinctly mixed success rate in the energy sector. Currently, airline membership to ADRs is only voluntary.

It also proposes giving the Civil Aviation Authority strengthened powers, including the right to fine airlines directly for breaches. There are also long-overdue improved rights for wheelchair users.

Bott and Co, a legal firm that specializes in flight compensation, said the government’s own figures suggest the average compensation payable will drop from £220 to about £23.60.

“In theory, the changes expose the airlines to more compensation. However, the consultation acknowledges that, in reality, far fewer people will actually have the impetus to make a claim,” it said. “The net result is that the airlines will save money because passengers will be disincentivized to make a claim. If compensation is going to be reduced to such a low level then it should be paid out automatically.”

The consumer advocate Helen Dewdney, who runs the Complaining Cow website, welcomed the move. She argued that the current EU rules disproportionally penalize low-cost carriers.

“A fairer system for both business and consumers has to be a good thing,” she said.

Rocio Concha, the director of policy and advocacy at Which?, said: “Far too many passengers have felt ignored or had to battle for compensation from airlines when things go wrong, so proposals to give the aviation regulator stronger powers, including the ability to fine airlines that consistently flout consumer law, are welcome.

“However, there are concerns that the plans set out in this consultation could be a bad deal for consumers if they result in a system that does not treat all passengers fairly. They could also lead to fewer incentives for airlines to take the rights of consumers seriously and set a bad precedent that could then be extended to international flights.

“The government needs to provide passengers with reassurance that they will get fair compensation for the often serious disruption of a delayed flight and must ensure that all eligible passengers actually receive what they are owed through a system with rules that can be enforced.”

Guardian Money has looked at the rules and fears that one of the unintended consequences of the UK adopting its own rules could be that more internal flights are cancelled.

Prior to the introduction of the EU rules, airlines would regularly cancel flights at the last minute to save money, sometimes leaving passengers in the middle of nowhere without a financial penalty.

With two sets of passengers in, say, London and Paris vying for the last available plane, the low-cost carriers could opt to cancel the flight with the least financial loss, which could well be the UK flight.

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