Wednesday, April 22, 2015
Earlier this month the U.S. 7th Circuit Court of Appeals issued its opinion in Volodarskiy v. Delta Airlines, affirming the opinion of the Northern District Court of Illinois that Regulation 261/2004 of the European Union (EU 261), which pertains to the rights of airline passengers to certain treatment and possibly compensation for canceled or delayed flights, does not provide for judicial redress outside of the EU Member States.
At issue here was whether a passenger entitled to bring an EU 261 claim could choose to do so in U.S. courts. In a handful of prior cases, plaintiffs have had limited success bring breach of contract claims in U.S. courts against carriers they alleged to have incorporated the compensation requirements of EU 261 into their terms of service. Having conceded at an earlier stage of litigation that such a claim was unavailable in this case, the plaintiffs rather cleverly argued that they should be able to seek to enforce the right of action granted by EU 261 directly in U.S. courts. The text of EU 261 instructs Member States to establish administrative bodies for the purposes of handling EU 261 claims, and permits passengers to seek relief through the "competent courts and bodies." The plaintiffs contended that there is no explicit requirement within the text that passengers that choose to seek relief via courts restrict themselves to the courts of the EU Member States. Evident in both the oral arguments and the written opinion is the court's keen awareness that the likely purpose behind attempting to bring these relatively small value claims in the U.S. is the possibility of combining multiple claims into a high dollar class action.
Regardless of the motivations behind the case, the question of whether a private right of action created by an EU regulation with no analogue in U.S. law should be recognized in U.S. courts is highly interesting. As the court observed on page 8 of its opinion, "It is hard to classify this dispute doctrinally. It has shadings of jurisdiction, venue, and choice-of-law, but it doesn't fit neatly into any of these doctrinal baskets." The court ultimately decided that the text of EU 261 is best interpreted as authorizing a private right of action only within the courts of the EU Member States. The opinion includes some discussion of comity, forum non conveniens, and similar alternative principles on which a decision might have been based, but those appear largely relegated to dicta.
The full opinion can be found here.
Wednesday, April 8, 2015
Applying the recently revised Guidelines on State aid to airports and airlines, the European Commission has approved three schemes proposed by the French government for the purposes of improving regional connectivity and development and relieving air traffic congestion.
Thursday, April 2, 2015
We hope to offer additional details and commentary as more facts emerge from last week's tragedy involving Germanwings Flight 9525, but for now what follows is an overview of the basic legal issues pertaining to the event as we understand them.
French authorities bear the primary responsibility for leading the investigation into the crash of Germanwings Flight 9525 and producing the final accident report. This assignment of responsibility stems from Annex 13 of the International Convention on Civil Aviation (Chicago Convention), which assigns responsibility for investigating the circumstances of an accident to the State of Occurrence. Other States legally entitled to have representatives participate in the investigation include the State of Registry, State of the Operator, and the State of Design and Manufacture. Because the aircraft in question was an Airbus A320 aircraft registered in Germany and operated by a German carrier, Germany appears to be the only other State with a legal right to participate in the investigation.
The primary legal concern with the conduct of the investigation, which is in its early stages, is the amount of information that has been leaked to the general public. Standard 5.12 from Annex 13 instructs the State conducting the investigation not to disclose a wide range of information including statements from investigation authorities, communications between persons operating the aircraft, cockpit recordings or transcripts thereof, medical or similarly private personal information about persons involved in the accident, and the analysis or opinions of accident investigators, unless a determination is made that the disclosure of such information outweighs any potential impact on this or future investigations. While it appears to this point that most of the public disclosures have been made by French criminal investigators as opposed to the technical accident investigators, such as France’s Bureau d’Enquetes et d’Analyses (BEA), the past week has demonstrated how difficult it is to conduct a confidential investigation in the current social media environment.
Because this was an international flight and the affected States are all signatories, civil liability is governed by the 1999 Convention for the Unification of Certain Rules for International Carriage by Air (Montreal Convention). This treaty sets no monetary cap on recovery, but does prohibit recovery of punitive or other non-compensatory damages.
The treaty holds Lufthansa (Germanwings is a wholly owned Lufthansa subsidiary) strictly liable for all proven damages up to 113,100 Special Drawing Rights (approximately $160,000) and presumes liability for any additional proven damages, unless the carrier is able to prove that the damage was not cause by its own negligence, wrongful act, or omission, or that of its agents or that the damage was solely caused by a third party. Pilots are considered agents of their employers. Based on the information presently available, there is no evidence that the carrier will be able to successfully defend itself from liability.
Lufthansa is likely to settle the vast majority of claims, with amounts likely to vary primarily based on the nationality of the victims. This variance is attributable to the ways different nationalities calculate damages in wrongful death cases as well as differences in national legal cultures regarding large awards. Should any claims proceed to litigation the plaintiffs will likely have their choice of forums between Germany and the home State of the passenger. Depending on where their tickets were purchased or the precise details of the passengers’ itinerary, some additional forums may be available to individual plaintiffs.
The Montreal Convention does not require carriers to provide advance payments to the families of victims to cover immediate needs, but it does permit States to impose such a requirement on their carriers which the European Union has done for all community carriers. Lufthansa has already announced plans to make advance payments of approximately $54,000 per passenger.
Ultimately, of course, the damages will actually be paid by Lufthansa’s insurers. Article 50 of the Montreal Convention mandates that States require their carriers be adequately insured to cover any and all liability to passengers that may arise under the Convention. Lufthansa is certain to have a separate policy covering the loss of the aircraft.
According to the standards contained in Annex 13 to the Chicago Convention, accident investigations are to be conducted for the purpose of gathering information to prevent future accidents and incidents and not for the purpose of apportioning blame or liability. However, some States pursue criminal liability for accidents and incidents involving aircraft according to their national laws. France is particularly aggressive about bringing criminal prosecutions for aircraft accidents. At these very early stages of the investigation, there does not yet appear to be any strong candidates for criminal prosecution.
One policy change has already been implemented in response to this incident, as airlines in Europe, Australia, Canada and elsewhere have begun requiring there to be two crew members in the cockpit at all times. This was already common practice in the United States. Given the recentness of the incident, these measures are, for now, voluntary. Though an incident of this nature will and should provoke further study of how to prevent its recurrence, with early commentary already focusing on pilot screening measures and cockpit security, it would be presumptive to recommend any significant changes to airline procedures before all of the evidence has been collected and analyzed.
Wednesday, March 18, 2015
The public debate over accusations of subsidies to the so-called "Gulf carriers," Etihad, Emirates, and Qatar has intensified in recent days as calls for action have expanded from rival airlines to include important government officials. Last Friday, transport ministers from France and Germany, with the backing of their counterparts from Austria, Belgium, the Netherlands, and Sweden, publicly expressed their desire for changes to EU law and policy that could restrict Gulf carriers' access to the European market and/or impose conditions on that access such as transparency requirements. Yesterday, William Shuster, Chairman of the U.S. House of Representatives Committee on Transportation and Infrastructure, endorsed the position of the U.S. carriers. Executives from the U.S. and Gulf carriers debated the issue at a forum organized by the U.S. Chamber of Commerce, at which the Gulf carriers promised a full rebuttal of the recently released white paper in which the U.S. carriers detail their claims.
Monday, March 16, 2015
Ryanair has announced that preliminary plans to begin serving routes between the U.S. and the EU have been approved by the airline's board. It will be four-to-five years before these plans are realized as the Irish low-cost carrier needs to first obtain aircraft suitable for long-haul operations. The prospect of future transatlantic services from Ryanair suggests that the ongoing resistance to Norwegian Air International's application to serve the U.S. may merely be delaying the inevitable.
Wednesday, March 11, 2015
Tuesday, March 10, 2015
Norwegian Air Shuttle and striking pilot unions have reportedly reached an agreement to end an 11-day strike. In addition to disrupting the airline's operations, the labor dispute had added international relevance given the centrality of concerns about labor practices to the U.S. government's delay in approving Norwegian's application to operate routes to the U.S. via it's Irish subsidiary, Norwegian Air International. While the strike has no legal bearing on Norwegian's contention that the U.S. is obligated to approve its application under the US-EU Open Skies Agreement, it's probably helpful politically for Norwegian to demonstrate an ability to work amicably with its unions.
Thursday, February 26, 2015
A UK court today held that airlines could not delay payments for compensation claims under EU 261 while awaiting the outcome of a related case before the European Court of Justice. In this case, Jet2 had been postponing payment to a passenger whose flight was delayed by almost seven hours because the delay was caused by a technical difficulty which the airline claimed constituted an "extraordinary circumstance" which exempts the airline from its obligation to compensate passengers. An analogous case concerning how to apply the "extraordinary circumstances" exemption to technical difficulties is currently pending before the ECJ.
Wednesday, February 25, 2015
Details are still emerging, but reports tonight of three Al Jazeera journalists in Paris for the operation of a remotely piloted aircraft illustrate the difficulty ahead in formulating appropriate public policy to meet the challenges presented by new technology.
Thursday, February 19, 2015
Tuesday, February 17, 2015
Wednesday, February 11, 2015
The ICAO Council will reportedly vote in June on whether to make the adoption of a family-assistance plans a recommended practice for States. The recommendation would urge States to develop a set of procedures to be followed in the event of a crash that would hopefully ease the burden on grieving families. With time, the measure could potentially be elevated to a required standard.
Friday, February 6, 2015
First reported by the Wall Street Journal, today's big story is the revelation that the three major U.S. legacy carriers are actively seeking changes to U.S. air transport agreements with the United Arab Emirates and Qatar. The U.S. airlines share similar concerns to those that have been expressed by European and Canadian carriers in recent years, namely that the so-called "Gulf carriers" - Emirates, Etihad, and Qatar Airways - are benefiting from state subsidies that provide those carriers with an unfair competitive advantage.
It is not clear that the air transport agreements need to be amended to address these problems. For example, the air transport agreement between the U.S. and the United Arab Emirates includes the following language under Article 12(1)(c) "Intervention by the Parties shall be limited to...protection of airlines from prices that are artificially low due to direct or indirect governmental subsidy or support." However, provisions such as this are rarely invoked because of the difficultly in defining what constitutes an indirect governmental subsidy, and in monitoring states for violations.
Wednesday, February 4, 2015
The International Civil Aviation Organization (ICAO) is holding a High Level Safety Conference this week, and policy responses to last year's two high profile tragedies involving Malaysian Airlines Flights MH370 and MH17 have dominated the agenda. Reports coming out of the conference have suggested that the organization is responding with uncharacteristic haste to the issues raised by the two incidents.
Prompted by the disappearance of Flight MH370, ICAO appears to have secured sufficient backing to submit performance-based flight-tracking standards for approval at the 2016 ICAO Council session. The standards call for airlines to receive location signals from their aircraft every 15 minutes, and more frequently during periods of distress. It appears the standards will not include prescriptive requirements such as mandating the inclusion of deployable recorder technology in new aircraft.
ICAO also appears to have settled on a proposal intended to improve access to information about flight risks over conflict zones, in hopes of avoiding another accident similar to Flight MH17. Under this plan, ICAO hopes to host an online database that would contain information about risks over conflict zones and be accessible to airlines, air navigation service providers and states.
Tuesday, February 3, 2015
Nearly 11 months after its disappearance, Malaysian authorities have officially designated the incident an accident. The circumstances surrounding the search for the missing aircraft have long represented an awkward overlap between the Search and Rescue functions outlined in Annex 12 to the Chicago Convention and the Aircraft Accident and Incident Investigation responsibilities contained in Annex 13.
Wednesday, January 28, 2015
Irish flag carrier Aer Lingus has been the subject of repeated takeover attempts by both Ryanair and I.A.G., but I.A.G.'s most recent proposal is one step closer to success as the Aer Lingus board has recommended that the airline's shareholders accept the offer. There has been some speculation that this could be the first in a series of acquisitions for I.A.G., but first the offer will need to be accepted by Aer Lingus' two largest shareholders, Ryanair and the Irish government, and the deal will have to be approved by the EU's competition authority.
Tuesday, January 27, 2015
Following the revelation that a remotely piloted quadcopter landed on the White House lawn, the question everyone is asking today is what the ramifications will be for unmanned vehicle usage in the United States. It's possible that such a high-profile incident will hasten integration as the FAA and Congress recognize the urgent need for clear, meaningful guidelines as well as legislative action to address those security and privacy concerns that are beyond the FAA's scope of authority. Conversely, a scare such as this could have freeze progress on integration as concerns about security predominate and blanket prohibitions are implemented until all security questions have been answered.
Thursday, January 22, 2015
News broke this afternoon that Ralph Pirker, the drone operator whose initial challenge to the FAA's authority to regulate unmanned aircraft was successful before being overturned in November, has settled with the agency. Pirker reportedly has agreed to pay a fine of $1,100.
Thursday, January 15, 2015
The Court of Justice for the European Union (CJEU) has issued a judgment in Case C-573/13. The case was referred to the court for the purpose of resolving two questions concerning the proper interpretation of Article 23(1) of Regulation EC No 1008/2008 as that article applies to the computerized booking system used by Air Berlin. The court concluded that a computerized booking system needs to display the final price to be paid at any time prices are listed, and to display the final price for all flights performing a particular service, and not merely the specific flight selected by the customer.
Wednesday, January 14, 2015
In a post last week we took a skeptical view of Indonesia's plans to introduce a price floor for air fares. An analysis out today from CAPA shares our criticism and includes alternative suggestions for how to fix Indonesia's air transport sector, beginning with upgrades to infrastructure and improving the safety oversight apparatus which carries a Category 2 rating from the United States Federal Aviation Administration. Promisingly, there have been reports that the Indonesian government is aware of the need for reforms to the State's transport bureaucracy.