Ryanair to Introduce EU261 Compensation Levy of €2
Ryanair, Europe’s favourite airline, today (30th Mar) announced it would introduce a €2 levy per passenger for all bookings made from Monday 4th April 2011 in order to fund its costs of flight cancellations, delays and its EU261 costs in “force majeure” cases where the airline is not responsible for either the delays or cancellations.
Ryanair confirmed that over the past year it has suffered costs of over €100m arising from flight cancellations, delays and providing right to care, compensation and legal expenses arising from more than 15,000 flight cancellations and over 2.4 million disrupted passengers, with the majority of these claims arising in three periods during which Ryanair was prevented from flying by the failure/inaction of third parties including:
a) the Icelandic volcano airspace closures of April/May 2010,
b) the snow closures of many EU airports during November/December 2010,
c) over 15 days of national ATC strikes, primarily in Belgium, France, Germany and Spain in summer 2010, which caused repeated flight delays and cancellations.
Ryanair believes that the unfair and discriminatory elements of the airline EU261 regulations should be amended to relieve airlines of the burden of providing care in cases where the cancellations and/or delays are clearly not the responsibility or fault of the airlines.
It is unfair and discriminatory that airlines are made liable for providing refunds, meals, hotels and phonecalls during ATC strikes, bad weather airport closures, or (volcanic) airspace closures when even travel insurance companies avoid liability during these “force majeure” events, and when competing transport providers (rail, ferries and coach operators) have no such “force majeure” liability under their equivalent EU261 regulations.
These unfair and discriminatory EU261 expenses cannot be loaded onto airlines without being passed on to passengers. Over the past year, Ryanair has suffered more than €100m arising from flight delays, cancellations and related right to care compensation, and legal costs overturning unlawful fines by Government regulators who have tried to extend EU261 to cover cases specifically excluded from EU261.
Ryanair’s €2 EU261 levy will help to defray these costs, which are not recoverable from Governments, ATC providers or airports and which therefore fall on the airlines in their entirety. Ryanair also confirmed that if the EU261 regulations are reformed, to include an effective right of recovery clause and a non discriminatory “force majeure” clause then it will reduce and/or eliminate this levy altogether as Ryanair’s cancellation and delay costs reduce over the coming years.
Ryanair’s Stephen McNamara said:
“The EU261 regulations are clearly discriminatory in the way they are applied to airlines, by making airlines responsible for delays, cancellations and right of care expenses during force majeure events such as volcanic eruptions, the snow closure of airports and the frequent ATC strikes across Europe. Despite repeated calls, the European Commission and EU Governments have still failed to make Europe’s ATC services an essential service, which (like their U.S. ATC counterparts) should not have the right to strike.
“ It is clearly unfair that airlines are obliged to provide meals and accommodation for passengers (for days and weeks in some cases), simply because governments close their airspace, or air traffic controllers walk off the job, or incompetent airports fail to clear their runways of snow. When the EU261 regulations were first introduced, airlines were assured that they could recover the cost of these cancellations and delays from those parties who caused them. However the airlines have no right of recovery from Governments (when they close airspace), ATC unions (when they repeatedly walk off the job), or airports (who can’t even clear snow off their runways). It’s a crazy situation that travel insurance companies paid out nothing during the volcanic ash crisis last year (because it was an “Act of God”), yet the airlines were forced to pick up weeks of delays, cancellations, hotel and restaurant costs.
Our EU261 levy enables us to contribute to these costs, while still maintaining Ryanair’s unbeatable low fares. We hope that we will ultimately succeed in removing the discriminatory provisions of the EU 261 regulations which oblige airlines to suffer millions of euro in delays, cancellations and care expenses, even during “force majeure” events which are clearly beyond our control. We are also seeking to have any EU261 compensation linked to the air fare paid, as it is the case for competing rail, ferry and coach transport, so that there is a level playing field between transport providers across Europe.
While we regret the imposition of this €2 EU261 levy, the extraordinary costs which have been imposed on us by delays and cancellations under these discriminatory regulations must be recovered from passengers. Ryanair remains the only airline in Europe to guarantee the lowest air fares on every route we operate, and we are also one of the very few airlines in Europe to continue to avoid fuel surcharges, while many of Europe’s airlines not only levy fuel surcharges, but have been raising them unfairly in recent months”.