The European Parliament and Council's agreement to strengthen passenger rights, EU261, risks increasing costs for airlines – and without achieving its purpose. On the contrary, the big winners appear to be the intermediaries who, for high fees, collect compensation for delayed and cancelled flights.
It is good that the EU wants to create clearer rules for air passengers. However, this compromise risks making it more difficult for airlines to maintain services, particularly in smaller and more vulnerable markets. Reaching an agreement has no intrinsic value if, in practice, it neither strengthens aviation nor passengers' rights, says Fredrik Kämpfe, industry manager at Transportföretagen Flyg.
Intermediaries are the big winners
For Sweden, the issue is particularly important. Domestic air travel has not yet recovered from the pandemic, several regional flight routes are under pressure, and aviation simultaneously plays a central role in accessibility, business, healthcare, crisis preparedness, and national defence. Against this backdrop, it raises questions that Sweden chose to support the compromise, even though the government has recently implemented several measures at home to strengthen Swedish aviation. At the same time, the agreement does not address the growing market for claims management companies, which in many cases take between 40 and 50 per cent of the compensation as a fee. This means that a significant portion of the compensation will continue to never reach the passenger.
Passengers may be forced to pay for services they do not use
Despite the review, the current system of financial compensation to passengers for delays and cancellations will be largely retained. For regional and shorter flight routes, this will continue to incur high costs, where compensation in some cases can exceed the ticket price several times over. At the same time, new rules for hand luggage are proposed, meaning the service will be included in the ticket price from the outset and can then be opted out of. This risks weakening the principle of active consumer choice and leading to travellers paying for services they do not request.
“Nothing is free, and if checked baggage is forced into the base price, the cost will be visible somewhere. The risk is that passengers travelling light will end up paying for services they don't use. If the result is also higher costs, more expensive tickets, and a weaker route network, we have not strengthened passengers' position in practice,” says Fredrik Kämpfe.
Source: Transportföretagen
