Guest

New EU Pax Compensation Rules = Higher Fares

Fri Oct 25, 2002 2:00 pm

Thanks a lot, Brussels!  Yeah sure

If you wonder why so many people have such a distaste for Bonkers of Brussels, the bureaucrats who just can't stop, then consider the latest example of control-freak madness.

The European Commission had proposed that airlines should pay compensation of £500 to each passenger who is bumped off a short-haul flight (the fee would be twice that for long-haul).

The European parliament, invited to approve this barmy business, yesterday voted to trim the payments to £130 and £400, although it could not resist another little complication, of a payment of £160 for "medium-haul" flights. This was heralded by the parliamentary spinners as a great blow for common sense.

Well, perhaps it is, by their own strange definitions, but it's not clear why the European Union should get involved in this at all, beyond insisting that everyone with a valid ticket should have the right to fly.

Airlines routinely overbook their flights, confident that not everyone will show up. If too many people do get to the gate, the airline offers an incentive sufficient to persuade enough passengers to postpone flying.

The problem is thus solved by market forces. Such agreements between consenting adults so infuriate the regulators that there are already petty rules about compensation.

The new scale will be much more expensive for the operators, with the result that fewer planes will take off full, as no-shows will mean empty seats.

Worse still, the payments extend to cancelled flights. The regulations are supposed to excuse the airlines from payment when the cancellation is not their fault, but in real life there will be plenty of scope for argument (and more bureaucracy).

No wonder the discount airlines were spitting fan blades yesterday; between them, they have opened up Europe to millions who would not otherwise be able to do what MEPs and bureaucrats take for granted. Thanks to our Brussels masters, those silly prices are going to become a fond memory.
 
LJ
Posts: 4103
Joined: Wed Nov 17, 1999 8:28 pm

RE: New EU Pax Compensation Rules = Higher Fares

Fri Oct 25, 2002 3:23 pm

Well, perhaps it is, by their own strange definitions, but it's not clear why the European Union should get involved in this at all, beyond insisting that everyone with a valid ticket should have the right to fly.

Because the airlines failed to regulate themselves. Airlines have showed that they don't handle in the interest of the consumer (meaning set minimum requirements) and thus have to pay the price
 
LMP737
Posts: 4800
Joined: Wed May 08, 2002 4:06 pm

RE: New EU Pax Compensation Rules = Higher Fares

Fri Oct 25, 2002 4:18 pm

"The problem is thus solved by market forces."

Since when do a bunch of closet socialists care about market forces.  Big grin

All kidding aside it amazes me how governments, especially in the EU, seem to go out of their way to make it for difficult for businesses to function. Especially for an industry as turbulent as the airlines.
Never take financial advice from co-workers.
 
Guest

RE: New EU Pax Compensation Rules = Higher Fares

Fri Oct 25, 2002 5:09 pm

Let's put it this way - if you are travelling by bus you don't expect to be fed or compensated if it's delayed ... and some of the LoCo fares are a lot lower than bus or train fares!

LMP737 is right ... this is crazy, and I strongly suspect was instigated by the 'high cost' airlines as part of their ongoing dirty tricks campaign against the LoCos.
 
Guest

RE: New EU Pax Compensation Rules = Higher Fares

Fri Oct 25, 2002 5:37 pm

Yes, rather barmy really.

There are myriad reasons why a flight may be delayed or cancelled, can you imagine the complications that will arise out of all this unnecessary red tape? I'm sorry, I just don't get Brussels on this one.

It's simple. If airlines don't look after their passengers, the latter will vote with their feet, and those airline will then fail, to be replaced by those airlines whom passengers think are providing them with value for their money.

And the compensation is not even in line with the fare paid for by the passenger..if a passenger has paid a price as low as say, Euros 35, it is ridiculous to then force the airline to compensate that passenger to the tune of pounds 100+....sorry, now I can see why the Brits aren't that keen on the EU...if they are going to start making it difficult for businesses to run properly, what's the point in being a member??

Rgds
 
LMP737
Posts: 4800
Joined: Wed May 08, 2002 4:06 pm

RE: New EU Pax Compensation Rules = Higher Fares

Fri Oct 25, 2002 5:45 pm

It also does not take an economist to figure out that this will make it harder for EU carriers to compete with foreign carriers on certain routes.
Never take financial advice from co-workers.
 
airblue
Posts: 1785
Joined: Sat May 19, 2001 9:16 pm

RE: New EU Pax Compensation Rules = Higher Fares

Fri Oct 25, 2002 5:53 pm

LMP737, I think these rules are valid to all flights (including foreign carriers) from/to EU.

 
donder10
Posts: 6944
Joined: Sun Oct 21, 2001 5:29 am

RE: New EU Pax Compensation Rules = Higher Fares

Fri Oct 25, 2002 6:08 pm

People buy a ticket on the low-cost carriers knowing what they get in return.It's a trade off which I and many others it appears seem willing to take.If you don't want to risk this trade off you book on BA,AF etc
 
RickB
Posts: 807
Joined: Mon May 19, 2003 3:11 am

RE: New EU Pax Compensation Rules = Higher Fares

Fri Oct 25, 2002 6:08 pm

Im sorry but I dont think this is a bad idea at all - most of the major European airlines already have a policy of denied boarding compensation, they also endeavour to provide alternative flights when a flight is cancelled - a few times with SAS and BA I have had flight cancellations, delays, etc. and both airlines have done everything they can to accomodate even to the point of switching me to competing airlines etc. Infact looking at the compensation levels being mentioned - they are less than I have already received with the majors. So this will not really affect the EU major carriers.

This rule is aimed at the low cost airlines who (not mentioning any names but some are more helpful than others) cancel a flight and only give people their money back - stranding people hundreds or thousands of miles from home often in a strange country. I have been in the situation of trying to get a flight back from Ireland when my flight has been cancelled with only an hours notice. Fine I got my money back - but that in no way compensated me for the fact that I had to pay for an alternative flight home with a different airline at the last minute and was therefore charged full price for it (around 15 times the amount my original ticket cost).

I think this is a great move for passengers.

RickB

 
FFlyer
Posts: 552
Joined: Sat Nov 24, 2001 6:46 am

RE: New EU Pax Compensation Rules = Higher Fares

Sat Oct 26, 2002 5:50 am

"It's simple. If airlines don't look after their passengers, the latter will vote with their feet, and those airline will then fail, to be replaced by those airlines whom passengers think are providing them with value for their money.."

In some countries and some routes there are no alternatives. Markets don't work in Europe. Take Finland - France; only AY flies between these two countries (!) and AF code-shares with them! Competition, market forces..? Two government owned carriers sucking the consumer's money.
 
Arsenal@LHR
Posts: 7510
Joined: Tue Mar 20, 2001 2:55 am

RE: New EU Pax Compensation Rules = Higher Fares

Sat Oct 26, 2002 5:51 am

More bollocks from the EU.
In Arsene we trust!!
 
aamd11
Posts: 863
Joined: Sat Nov 17, 2001 11:54 am

RE: New EU Pax Compensation Rules = Higher Fares

Sat Oct 26, 2002 6:22 am

Well Said Arsenal!

Why are they bothering to do this?
it will only serve to damage the industry more than it is already.
Look at it in simplistic terms, to pay someone that much because the flight was overbooked is stupid.
Airlines overbook to ensure they will take off with a reasonable load, trying to eliminate the effect of non showers.
Now they can overbook, but they over book by a couple of people and they could be paying thousands of pounds because they cant accomadate everyone.

Shear idiocy from them idiots in Brussles.

A^A MD-11
 
Guest

RE: New EU Pax Compensation Rules = Higher Fares

Sat Oct 26, 2002 6:30 am

FFlyer, the EU should then realise that it cannot apply the same "remedy" across all markets, especially that of Britain, which is more aligned to the US market model.

This might have a devastating effect on low-cost airlines, if they are forced to raise their fares...no one asked the consumer what he preferred.

The LCCs made a deal here in Britain..."we'll charge you much lower fares, and do our best to give you an on-time, reliable and 100% safe service. But if our flight has to be cancelled/is delayed we can't give you much back. Is that ok with you?" So far, it seems people like the low-cost deal....it was an alternative to flying with a full-service airline, and most people understand that.

We never seem to get any compensation for late buses or trains anyway....

The EU has a knack of making these "rules" which then, inevitably get broken, before the bureaucrats decide it wasn't such a great idea in the first place...
 
BHXviscount
Posts: 166
Joined: Fri Oct 18, 2002 8:45 am

RE: New EU Pax Compensation Rules = Higher Fares

Sat Oct 26, 2002 6:40 am

I think it isn't a bad idea either RickB -some airlines take the piss and just want to cart you from a2b and don't give a s**t! BUT as with most EU hand me downs they tend to 'hurt' more people than they actually are designed to protect. I'll guess we will have to wait to see a "test" case brought before the courts before we really know how this will pan out. You have to give it to the EU arses they really know when to put the boot in!
No officer, its NOT a surface to air missile its a camera..for taking photographs.
 
sllevin
Posts: 3312
Joined: Wed Jan 30, 2002 1:57 pm

RE: New EU Pax Compensation Rules = Higher Fares

Sat Oct 26, 2002 7:37 am

Personally, I think setting fairly high levels of compensation for involuntary is a good thing. Personally, I find that, without exception, the costs of missing a flight are in fact very high, and often exceed the value, in a sense, of the ticket itself. Losing a day on a vacation, or missing a borthday party, or a business meeting is a big deal.

And given how airlines are now pushing far harder on the 'use it or lose it' values, heck, there shouldn't be nearly as much an issue, since they are going to be capturing revenue on empty seats more often. Overbooking is just a risk-incurring method of maximizing revenue, even to the point of more than 100% yield.

This will simply make it cost more for airlines to overbook. I agree, it may drive ticket prices somewhat higher, but in truth, that's because of the airline's desire for revenue, not for their desire to ensure what seats are full.

I hope the US comes up with high compensation requirements as well.

Steve
 
Guest

RE: New EU Pax Compensation Rules = Higher Fares

Sat Oct 26, 2002 7:52 am

I don't think the overbooking is that much of a worry. I can only speak for Ryanair, as I have friends who work for the airline.

They don't practise overbooking, neither do they cancel flights for commercial reasons. I think their main worry is the business of having to provide hotac/snacks/beverages and pay-outs if cancellations occur for other reasons.

Of course all airlines should try their best to treat their pax with respect, and avoid inconveniencing them, but the whole reason for the LCCs existence is to offer much lower fares by cutting out frills/refunds, in most cases. You have a choice.

I know the EU has people's interests at heart, I just think their method of looking after people is, in this case, misguided.

Perversely, if some costs rise so significantly as to force some airlines to close, then so long to more competition.......and hello to less choice.

Of course, you'll think I chose these articles from The Independent because they happen to agree with my point of view. But they do make sense.

http://www.independent.co.uk/story.jsp?story=345656

http://argument.independent.co.uk/leading_articles/story.jsp?story=345637
 
airblue
Posts: 1785
Joined: Sat May 19, 2001 9:16 pm

RE: New EU Pax Compensation Rules = Higher Fares

Sat Oct 26, 2002 4:52 pm

I think these new rules sound good in principle and they won't affect so much no-frills airlines about overbooking.
Since no-frills airlines don't deliberately overbook they haven't to be worry to pay any compensation.
And I agree also for the payments to cancelled flights. Even if I pay only 0,01p plus taxes for my flight, that doesn't mean they have to give me back only 0,01p if they will cancel the flight and then leave me alone in a foreign country without assistance. When I bought the ticket I pay to get to point A to B, so they have to take me to B without extra cost.
You could say that if I want assistance I could book with a full service airlines, but I think the point of these new rules (that give to airlines a unique and clear law and protect better the travelers) is to eliminate the problems to choose to pay more with full service airlines to have a better assistance or "to risk" to book with no-frills.
From now when you will book your next flight, you could only check for the best deal without thinking (if there are some troubles), will they give me a good assistance??

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