March 24, 2012
The blog will be silent through the early part of next week. Regular posts will resume on Wednesday.
March 23, 2012
Denise McDonagh v Ryanair Ltd
Yesterday, Advocate General Yves Bot of the Court of Justice for the European Union (CJEU) delivered his opinion in Case C-12/11, Denise McDonagh v Ryanair Ltd. The case pertains to the disruption of air service caused by the eruption of an Iceland's Eyjafjallajökull volcano in April 2010. Denise McDonagh's Ryanair return flight to Ireland was canceled and she was stranded for a week during the ash cloud crisis. McDonagh brought a claim against Ryanair in the Dublin Metropolitan District Court alleging that Ryanair failed to provide her with care, in particular meals and hotel accommodations, while she was stranded, as required by Articles 5 and 9 of EC Regulation No 261/2004. The Dublin Court referred the case to the CJEU to consider whether the unusual nature of the circumstances, namely the volcanic eruption, exempted Ryanair from having to provide care in this situation, whether the regulation contains an implied limitation on the amount of care Ryanair needed to provide, and if there were no exemption or limitation, whether the regulation was in violation of the principles of proportionality or non-discrimination, or the principle of equitable balance of interests enshrined in the Montreal Convention, and thereby invalid. Advocate General Bot's opinion finds in McDonagh's favor on all counts. According to the opinion, the regulation explicitly exempts carriers from the requirement to provide compensation but still requires them to provide care when cancellations are caused by "extraordinary circumstances," and a volcanic eruption clearly falls within the definition of "extraordinary circumstances." The opinion also neglects to read into the regulation any implied limitation into the duty to provide care. Both of these readings of the regulation are difficult to argue with. The opinion doesn't find the regulations to violate any of the principles in question, rebuffing the claims about proportionality by reference to carriers' ability to pass costs on to consumers through ticket prices, and citing a prior case, Case C‑344/04 IATA and ELFAA  ECR I-403, where the court had previously dismissed arguments against the regulation on the grounds of non-discrimination or the Montreal Convention. It is worth noting that EC officials are contemplating changes to the regulation that would limit carriers' liability to provide care, suggesting that the Advocate General's interpretation of the existing regulation is correct, but that Ryanair has a legitimate argument that liability should be limited. See Rose Jacobs and Joshua Chaffin, Ryanair Set Back in Volcanic Ash Case, Financial Times, March 22, 2012 (available here). The Advocate General's opinion is not binding, but full court judgments typically hew closely to Advocate General opinions. Those who wish to read the Advocate General's opinion can do so here.
Aviation in Europe
Blog readers interested in a brief, on-target overview of the state of the European aviation market would be well-served by this piece in yesterday's Financial Times. See Tony Barber, Europe's Airline Brew Must Find a Way to Lose Some Froth, Financial Times, March, 22, 2012 (available here).
March 22, 2012
Israel/EU Aviation Agreement
The European Union and Israel have completed a comprehensive aviation agreement that will replace the current bilateral air services agreements between Israel and EU Member States. See Press Release, European Commission, EU-Israel Aviation Agreement: Israel Joins Europe in Aviation, March 22, 2012 (available here). The agreement calls for the gradual opening of markets among EU Member States and Israel so that by 2017 all EU airlines will be able to fly to Israel directly from any point within the EU, Israeli carriers will be able to fly to any airport within the EU, and there will be no restrictions on frequency. Israel will be required to bring its safety, air traffic management, environmental and consumer protection regulations in line with EU standards. The agreement is part of a broader effort by the EU to create a Common Aviation Area with States that are not part of the EU. Comments from Israeli officials last month raised concerns that Israeli carriers and unions might derail an agreement, but those fears appear to have been overblown. See Aviation Law Prof Blog, Feb. 27, 2012 (available here).
March 21, 2012
UPS Purchase of TNT Express
Earlier this week, UPS reached an agreement to purchase Netherlands-based delivery services company TNT Express. Given the acquisition presumably includes TNT's air cargo services, the deal will need to comply with the ownership and control rules established in Annex of the U.S.-EU Air Transport Agreement. See Air Transport Agreement, Annex 4, U.S.-EU, Apr. 30, 2007, 46 I.L.M. 470 (available here). While this aspect of the deal has to this point gone underreported, a Financial Times article suggests that UPS might sell control of the air operations in order to comply. See Robert Wright & Matthew Steinglass, TNT is Vital Piece in UPS Jigsaw Puzzle, Financial Times, March 19, 2012 (available here).
March 20, 2012
Thames Estuary Airport Under Consideration
Airport capacity is a serious concern in the United Kingdom, especially following the controversial cancellation of plans to expand Heathrow. See Aviation Law Prof Blog, March 5, 2012 (available here). UK Prime Minister David Cameron touched on alternatives in a recent speech, indicating the idea of building an airport in the Thames estuary, at one time out of favor, will receive serious consideration going forward. See David Cameron Says Aviation Review Will Look at Pros and Cons of Thames Estuary Airport Idea, Daily Mail, March 20, 2012 (available here). The Prime Minister described it as one of multiple options under consideration, but acknowledged that a solution is necessary for what continues to be an extremely contentious issue.
March 19, 2012
India to Join China in Barring Airlines from Participating in EU ETS
India is set to become the second State to instruct carriers not to comply with European Union officials in regards to the Emissions Trading Scheme. See Anurag Kotoky, India to Ask Airlines to Shun EU Carbon Scheme, Reuters, March 19, 2012 (available here). China was the first State to announce its carriers would not participate. See Aviation Law Prof Blog, Jan. 4, 2012 (available here). According to the report, Indian officials have discussed suspending EU carriers from flying to India and charging exorbitant overflight fees should the dispute escalate. The government official quoted in the Reuters story delivers the most aggressive threats levied against the EU to date, including, "We have lots of measures to take if the EU does not go back on its demands. We have the power of the economy, we are not bleeding as they are," and, "If things continue like this, then European airlines will be forced to avoid flying over India and go over the Indian Ocean and the Bay of Bengal. That's not viable for them. They won't have fuel to do that." While last week brought hopeful updates on the possibility of ICAO brokering a global solution, today's news is a reminder of what is at stake should ICAO fail.