Ryanair backs down over compensation

22 April 2010

Ryanair has backed down on its plans not to meet the expenses of customer left stranded by the flight chaos of the past week.

Yesterday the airline’s boss, Michael O’Leary, said he would rather be taken to court than compensate customers, prompting a furious backlash from passengers caught up in the flight chaos.

Under EU rules, airlines are responsible for providing accommodation and meals for passengers in the event of flights being cancelled. There are no time or monetary limits.

But on Wednesday O’Leary said Ryanair could not afford to compensate customers and said Ryanair customers whose flights were cancelled would get their fare refunded and no more.

But this morning saw a dramatic u-turn and the airline announced it will now refund passengers for "reasonably-receipted expenses".

However, O’Leary maintains the EU rules are meant to protect customers in the event of individual flight delays or cancellations, not total air space shut down, which is what happened when a cloud of volcanic ash from Iceland made it unsafe to fly last week.

O'Leary said that Ryanair would seek to recover its costs - up to €40 million (£35 million) - from the EU "which closed the airspace", and said he would continue to lobby for a change to the rules.

The airline’s stance could affect up to 400,000 customers and potentially cost Ryanair millions of pounds.

The Board of Airline Representatives (BAR), which represents more than 90 airlines, agreed with Ryanair the rules were designed to apply when individual flights were cancelled or delayed  - not when all flights were grounded.

BAR says the regulations were "Adraconian, disproportionate and impractical".

Ryanair’s u-turn came amid anger from other airlines about the length of the air space shut down and the cost to them.

Easyjet said it would compensate customers, including paying for 15,000 hotel rooms, and that flight ban had cost it £50 million. Bmi had threatened to cap refunds but it’s likely to back down too.

Virgin boss Richard Branson said he expected compensation from the government in the same way that the US government compensated airlines after 9/11.

What are the rules?

The rule in question is the European Union's airline passenger regulation EU 261.

It says that if a flight is cancelled, customers should have the choice of a refund or rerouting at the earliest opportunity, with no extra cost.

Where this isn’t possible the airline should pay for hotel accommodation and meals until a new flight it provided. There is no time or monetary limit on the rule.

What about travel insurance?

It’s worth trying to make a claim on your travel insurance if you’ve been left stranded by an airline that won’t meet your extra costs.
However, not all travel insurers are paying claims relating to the volcanic ash crisis with some saying they don’t cover natural disasters or “acts of God”. To find out whether your insurer will cover the event, contact it directly.

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