The ECJ has ruled on ticket refunds in the event of a flight cancellation

22nd October 2018 by Davide Scavuzzo

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The Court of Justice of the European Union has ruled that, in the event of a flight cancellation, the ticket refund must include the amount paid as commission, unless that commission was set without the knowledge of the airline.

On 12 September 2018 the Court of Justice of the European Union handed down its judgment in Case C-601/17, DM and Others v Vueling Airlines SA. The request for a preliminary ruling was made in the context of a dispute in front of the Amtsgericht Hamburg (Local Court, Hamburg, Germany), between DH, a German citizen, and Vueling Airlines SA (Vueling), a Spanish low-cost airline.

Mr DH bought, at the price of €1,108.88, flight tickets valid from Berlin to Faro (Portugal) for him and his family from the website Opodo.de, an online ticket seller. The overall price of the ticket paid to the website was €1,088.88, but the actual cost for the tickets was €1,031.88, while €77 were collected as a commission by the booking site. As the flight was cancelled, the German citizen asked the airline for a refund pursuant to Regulation (EC) No 261/2004. Following the request, Vueling agreed to reimburse the amount of €1,031.88, asserting that the remaining €77 were not part of the tickets price. Mr DH eventually filed a lawsuit before the referring court.

The preliminary ruling of the Court revolves around the interpretation of Article 8, paragraph 1, letter a), of Regulation (EC). 261/2004 which sets out that, in case of cancellation, passengers shall be offered, among other choices, the chance of “reimbursement within seven days, by the means provided for in Article 7(3), of the full cost of the ticket at the price at which it was bought”.

In its judgment the Court has tried to strike a balance between the interests of passengers and those of air carriers. In the light of those objectives, the Court has considered that, while a commission collected by an intermediary from a passenger when a ticket was bought must, in principle, be regarded as a component of the price to be reimbursed to that passenger in the event of cancellation of the flight, its inclusion must nevertheless be subject to certain limits, in view of the interests of the air carriers it affects. Therefore, the Court of Justice stated that:

“Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91, and in particular Article 8(1)(a) thereof, must be interpreted as meaning that the price of the ticket to be taken into consideration for the purposes of determining the reimbursement owed by the air carrier to a passenger in the event of cancellation of a flight includes the difference between the amount paid by that passenger and the amount received by the air carrier, which corresponds to a commission collected by a person acting as an intermediary between those two parties, unless that commission was set without the knowledge of the air carrier, which it is for the referring court to ascertain”.

Roberto A Jacchia is a Partner at De Berti Jacchia Franchini Forlani Law Firm.
He can be contacted at: r.jacchia@dejalex.com.

Davide Scavuzzo is an Associate at De Berti Jacchia Franchini Forlani Law Firm.
He can be contacted at: d.scavuzzo@dejalex.com.

About the Author

Davide Scavuzzo has been an associate at De Berti Jacchia Franchini Forlani since 2015. He previously worked in the Financial Institutions team of Hogan Lovells in Rome.

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