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Flight compensation payouts to be slashed

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Written by: Emma Lunn
25/03/2022
Government plans to reform compensation rules for UK flights could slash average payouts by £163 per passenger and weaken a vital deterrent against delays and cancellations, according to a consumer champion.

Currently, under EU261 rules, someone on a domestic flight in the UK can claim £220 once their flight has been delayed by three hours.

But the government is considering scrapping this and offering compensation based on ticket price and the length of delay instead – similar to the Delay Repay system in rail.

The Department for Transport (DfT) is currently running a consultation which is due to end on 27 March.

But Which? estimates that the system proposed by the government could save airlines tens of thousands for a single flight. It said compensation would plummet to just over a quarter of the current amount as the average sum eligible to each passenger would drop from £220 to just £57.

Which? looked at figures provided by Skyscanner to calculate how much airlines would have to pay out for long delays on some of the most popular UK routes under the possible new system. Its calculations assume planes have a full capacity of 180 passengers and everyone eligible is compensated.

It found that for a flight from Edinburgh to London with an average economy ticket price of £44, an airline would potentially have to pay out up to £39,600 for delays of three hours or more. But under the government’s proposed scheme the maximum payout would be reduced to just £7,920.

For a flight from Gatwick to Belfast with an average ticket price of £55, an airline would have to pay out up to £39,600 for delays of three hours or more. But under the proposed scheme the maximum payout falls to just £9,900.

‘Could set a precedent to weaken compensation rights’

The campaign group said it’s hugely concerned that reducing compensation payments would remove a significant deterrent against airlines consistently letting passengers down with delays and cancellations.

While a lower level of compensation could become available to more people, Which? believes it would be wrong to switch to a system like that in operation for the rail industry. It said passengers affected by severe delays or flight cancellations could potentially face missing out on a holiday, with ongoing travel and accommodation costs, making it far more costly than missing a train.

Which? said the changes would also disproportionately affect people living in the devolved nations and regions of the UK, who are more likely to take domestic flights, whether to visit family, for business, or as the first leg of a trip abroad.

It is also concerned that, if adopted, this plan could set a precedent that could weaken passenger compensation rights and incentives for airlines to avoid flight disruption for travel throughout Europe and further afield.

The consumer champion is calling on the government to reconsider its proposals on compensation and instead increase enforcement in a market which, it claims, has seen persistent law-breaking by airlines over many years. It said the government can restore consumer trust in the sector by reducing both delays and cancellations.

However, Which? is supportive of separate proposals in the same DfT consultation to grant administrative fining powers to the Civil Aviation Authority (CAA) and make it mandatory for airlines to join the Alternative Disputes Resolution (ADR) scheme.

It is calling for the government to administer this with the introduction of a statutory-backed ombudsman in aviation.

‘Embolden airlines to act with impunity’

Rory Boland, editor of Which? Travel, said: “Ripping up current compensation rules for UK flights would be a huge blow for passenger rights and embolden airlines to act with impunity. Unfair practices such as overbooking and denied boarding could once again become more commonplace if this essential deterrent is removed, leaving passengers out of pocket.

“The government should reconsider these reforms and instead give passengers confidence that they will be protected when their journey is disrupted by giving the aviation regulator the powers it needs to crack down on airlines trying to flout the rules.”

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