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Protecting air passengers' interests

The recent verdict of the European Court of Justice upholding the validity of the latest European Union (EU) regulation that enhances the scope of existing rights of air passengers to financial compensation highlights the complexities of competitiveness and consumer protection in the skies. The Luxembourg body's decision could bear important lessons for India's aviation sector which is now exploding, with new players vying for passengers. Since 1991, travellers on all scheduled flights throughout the EU have been guaranteed compensation from airlines which deny passengers with confirmed tickets a seat on account of the much-resented practice of overbooking. The 2005 legislation now in force — which extends these rights to chartered and domestic carriers, as well as to all airlines based in an EU member-state, regardless of the origin of flights — has brought long delays and cancellation of flights within the purview of consumer protection law. Under this regulation, overbooked airlines are required to seek customers who may be prepared to forgo a scheduled journey in lieu of other benefits. Moreover, passengers are entitled to hotel accommodation in the event of overnight stay and to a refund of their ticket if they are stranded for five hours or more. Similarly, cancellation of flights attracts the same penalties as denial of boarding when the reason for the cancellation is within the airline's control, unless passengers have been given at least two weeks' notice or provided suitable alternatives. If the cancellation, whatever the cause, delays passengers by five hours or more, they are also entitled to a refund of their ticket plus a flight back to their original point of departure if continuing the journey is no longer worthwhile.

Delays are estimated to cost European airlines between 1.3 and 1.9 billion euros a year. If the airlines are to stay competitive, they will not be able to pass the burden of the new measures on to customers and it is imperative that they switch to more realistic schedules and improve overall efficiency. With air traffic expected to nearly double by 2020, the European Commission's aviation policy should reflect a more rational approach than some of its proposals indicate. For instance, the idea of a levy on the air transport sector to create a fund for developing countries smacks of a tendency to treat air travel as an indulgence or as not part of normal economic activity. The move has rightly been criticised by the International Air Transport Association which has also opposed initiatives for blacklisting of airlines as merely punitive, especially since air safety is linked directly to international cooperation in other areas. Striking a fine balance between the interests of passengers in assured seats and punctuality on the one hand and the need to keep fares down and the airlines competitive on the other has too often proved difficult.

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