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Mon, Feb 21, 2005 - Page 12 News List

Airline industry up in arms over new EU rules

CUTTING PROFITS New rules that would increase compensation for travellers whose flights are delayed or cancelled are seen as going too far

AFP , Geneva

New European Union measures bolstering compensation for air travellers who suffer delays or cancellations have left the airline industry seething, amid warnings that it was taking on new financial risks that will eventually hit fares and passenger service.

"At some point, somebody is going to pay for it," said Anthony Concil, spokesman for the International Air Transport Association (IATA), which groups 270 of the world's major flag carriers.

"You have this consumer protection legislation that may result in increased prices, increased connection times, less convenience, and reduction of service to smaller regional destinations," he added, dismissing the changes as "ridiculous."

Easyjet, which is not an IATA member along with many independent low-cost airlines, said the compensation rules introduced by Brussels last Thursday were "disproportionate."

"What started as a good piece of legislation to prevent traditional airlines bumping off passengers through overbooking has become a bad piece of legislation," said Easyjet chief executive Ray Webster.

"Ultimately it will have an impact on the average cost of a ticket," marketing director Philippe Vignon told reporters.

Jilted passengers in Europe's increasingly congested airspace might relish boosted compensation of US$327 for flights of less than 1,500km, or 400 euros -- against 150 euros before -- for longer flights.

But the airline industry was preparing to pay a high price mainly for something it said it could not control -- bad weather.

Rival forms of transport like high-speed trains and ferry services did not face the same constraints, other branches like air traffic control and airports were untouched, while safety issues were ignored, airlines complained.

"There's absolutely no incentive for us to delay or cancel a flight, there's every incentive for airlines to take care of people when things go wrong," Concil added, citing the need for companies to woo customers in a more competitive environment.

Easyjet pointed out that compensation was not tied to the fare paid by a passenger.

"A business class passenger is entitled to 250 euros, which seems more relevant than someone on our Geneva-Nice flight who will have paid 55 euros," said Vignon.

In recent weeks, Easyjet, like others in Europe, has cancelled flights when snow closed down airports.

In an odder incident, outbound passengers were stranded overnight at Rome airport earlier this month after one of its planes reportedly landed at the wrong airport in the city.

Vignon insisted that 80 percent of cancellations were due to operational problems over which the airline had no control.

Regional airlines, operating low volume routes out of minor airports that are often more prone to bad weather, were also up in arms.

"It is one of the worst pieces of legislation in aviation we have seen from the European Union," said Andrew Clarke, policy director at the European Regions' Airline Association (ERAA).

The association, which represents 65 airlines, estimated that the extra cost of compensation would amount to about two percent of turnover, although one member had put it at five percent.

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