Who pays? – BBC Radio 5’s Gabby Logan interviews Simpson Millar’s Travel Expert
Simpson Millar Solicitors Travel Law expert Nick Harris was again invited by the BBC to share his views on the Icelandic volcanic ash incident live on air.
BBC Radio 5’s Gabby Logan questioned Nick live on Tuesday afternoon’s Five Live show about the consequences of the disruption caused to airlines and the airline industry’s call to be compensated.
Nick, the firm’s Head of International Travel Law, disagreed with other guests that airlines should receive state sponsored assistance.
After being pressed, Nick responded sharply by drawing attention to the fact that EC Regulation 261/2004, requiring airlines to provide assistance to passengers stranded by delays and cancellations, had been operative since 2005.
Nick felt that the Regulations were straightforward in setting out airlines’ obligations and potential liability to incur costs in ‘extraordinary circumstances’.
In Nicks view the event of an extended period of disruption was something that was foreseeable and which the airlines should have factored. Indeed Nick pointed to BA who have been keen to make it known that they had in excess of £1.7bn in cash set aside for such a crisis.
Although inadequately drafted the Regulations are unequivocal on the point of airlines providing assistance and consequently if assistance is to be provided it follows that costs will be incurred which must by reason be absorbed by the airlines.
What has become more than apparent is that the Regulations were not drafted to account for situations such as the volcanic ash incident – albeit they were drafted after 9/11 the last time a situation arose grounding all air traffic.
The necessary approach Nick advocates is that both passengers and airlines require better regulatory provision and protection but in this instance the public should not be expected to foot the bill – although arguably higher fares will be an inevitable consequence.
Following announcements by EU Transport Commissioner Siim Kallas a review of the regulatory provision will happen very quickly.
Nick submits that if airlines are compensated then this would open up the floodgates and make it impossible to draw a line.
Nick said: "All businesses are exposed to risks. Airlines in my mind are no more deserving of state sponsored assistance than the small businessman whose business has been disrupted because staff have been stranded abroad or goods haven’t arrived by air freight – do we expect the small businessman to compensated?”
"It should also be borne in mind that whilst the airlines have lost there have been many winners. For example ferry companies and UK hotels have seen a boon in business as have many other sectors such as – ironically – the banking sector which has seized upon the number of stranded passengers abroad to offer extensions to overdraft and credit card facilities targeting customers who have been finding it difficult to pay their way abroad."
"My concern is following the banking fiasco that if we extend state sponsored assistance again to airlines then what next?" Useful links