Monday, November 30, 2009

Austrian Supreme Court clarifies information duties in regard to entry requirements

Mr. F had booked a package tour to Morocco for himself, his wife and his eight year old son. At the time of booking he did not ask for entry requirements, only leafed through the pages of the tour organiser's brochure without looking for the respective information and didn't take the brochure along. The booking confirmation issued by the travel agent included the advice that information about entry requirements was avialable in the tour organizers brochure, at the website of the Austrian Ministry of Foreign Aiffairs at<> or at the embassy of the respective country.

At home he looked up the website of the Austrian Ministry of Foreign Aiffairs and found the information that to enter into Morocco for tourist purposes and a period not exceeding three month, Austrian citizens didn't need visa but were required a passport valid throughout their stay. In a guidebook he read that children either needed their own passport or had to be registered in a parent's passport.

At the airport he was told that his son would need his own passport and registration in the mother's passport (without foto) was not sufficient. F. decided to book a 'last minute' package tour to Mallorca. To show goodwill the tour organiser refunded 50 % of the travel price without accepting responsibility.

Back home F. assigned his claim to Austrian Federal Chamber of Labour which filed a law suit against the tour organiser.

Both first instance and second instance (Commercial Court Vienna) dismissed the claim: it was common knowledge that travelling to another country usually requires a passport. From the website of the Ministry of Foreign Aiffairs F. had learned about the requirements but ignored same. He therefore was responsible for contributory neglicence of 50 %. As the tour organiser had refunded 50 % there was no further claim.

Upon appeal of the Federal Chamber of Labour, Austrian Supreme Court held that tour organiser and travel agent had failed to fulfill their information duties: The advice given at the booking confimation was insufficient as the brochure was not handed out and the request to look at a certain website of the Ministry of Foreign Aiffairs or ask an embassy would impose a responsibility on the consumer which information duties of the tour organiser and the travel agent are aimed to avoid. There was no contributory negligence if F. had misunderstood the information given at the website of the Ministry of Foreign Aiffairs. Judgement was therefore given in favour of the claimant.

Supreme Court Judgement 6 Ob 142/09i of Sep.18, 2009 available in German here>>.

Friday, November 27, 2009

Compensation in the Event of Airline Bankruptcy

Motion for a Resolution by European Parliament

Mathieu Grosch, Artur Zasada on behalf of the PPE Group

Saïd El Khadraoui on behalf of the S&D Group

Dirk Sterckx on behalf of the ALDE Group

Michael Cramer, Frieda Brepoels on behalf of the Verts/ALE Group


European Parliament resolution on passenger compensation in the event of airline bankruptcy

The European Parliament, – having regard to the oral question of 15 October 2009 to the Commission on passenger

compensation in the event of airline bankruptcy (O-0089/09 – B7-0210/2009),

having regard to Council Directive 90/314/EEC of 13 June 1990 on package travel, package holidays and package tours,

having regard to Regulation (EC) No 2027/97 of the European Parliament and of the Council of 9 October 1997 on air carrier liability in the event of accidents,

having regard to Regulation (EC) No 785/2004 of the European Parliament and of the Council of 21 April 2004 on insurance requirements for air carriers and aircraft operators,

having regard to Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91,

having regard to Regulation (EC) No 1008/2008 of the European Parliament and of the Council of 24 September 2008 on common rules for the operation of air services in the Community,

having regard to Rule 115(5) of its Rules of Procedure,

A. whereas Council Directive 90/314/EEC regulates aspects of the package holiday business and provides for appropriate compensation and repatriation of consumers in the event of the bankruptcy of package holiday firms,

B. whereasRegulation(EC)No2027/97establishesthenatureofaircarriers'liabilityinthe event of accidents and compensation arrangements for passengers,

C. whereasRegulation(EC)No785/2004laysdowntheinsurancerequirementsaircarriers and aircraft operators must meet,

D. whereas Regulation (EC) No 261/2004 provides for compensation for and assistance to passengers who are denied boarding or whose flights are subject to cancellation or long delay,

E. whereasRegulation(EC)No1008/2008establishesstringentfinancialrulesforaircraft operators,

PE428.771v01-00 2/3 RE\796786EN.doc

F. whereastherehasbeensubstantialgrowthinthelastdecadeinthenumberofrelatively small low-cost carriers flying to recognised holiday destinations and the number of passengers they carry,

G. whereas there have been 77 bankruptcies in the aviation sector in the last nine years, resulting in some instances in many thousands of passengers being stranded at their destinations and unable to use the return portion of their flight ticket,

1. Notes that the Commission has undertaken wide-ranging consultation of stakeholders on the question of airline bankruptcy;

2. Recalls that the Commission undertook a major study of the difficulties surrounding airline bankruptcy and its impact on passengers and forwarded its findings to Parliament in February 2009;

3. Notes the findings of that study and the range of options which it examines;

4. Recalls in this regard that there are a number of options which the Commission could pursue to strengthen the position of passengers of bankrupt airlines, including compulsory insurance for airlines, a voluntary insurance arrangement for passengers which airlines would be required to propose, and the establishment of a guarantee fund;

5. Calls on the Commission to examine the possibility of a legislative proposal and submit it, if it considers it appropriate, by 1 July 2010 which has as its specific objective the provision of compensation for passengers of airlines which go bankrupt and establishes financial and administrative arrangements, including the principle of mutual responsibility for passengers of all airlines flying in the same direction with available seats, which would ensure repatriation for passengers who are stranded at non-home airports in the event of airline bankruptcy; asks the Commission to propose, when reviewing Travel Package Directive 90/314/EC, an extension for repatriation or rerouting for the passengers concerned;

6. Calls on the Commission to consider the possibility of extending such measures to airlines which have ceased operations and caused passengers similar inconvenience to that caused by airlines which go into bankruptcy;

7. Calls on the Commission to investigate the quick release of impounded aircraft by national regulatory bodies so that those aircraft can be used to bring stranded people home;

8. Instructs its President to forward this resolution to the Council, the Commission and the parliaments and governments of the Member States.

New Commissioners / Speech Kuneva

Meglena Kuneva, the leaving commissioner for Consumer Policy held a press conference regarding the "Revision of the Package Travel Directive" (see below)

Along the way: The new designated commissioner for Consumer Policy is John Dalli (MT) and for Transport (and as VicePresident) Siim Kallas (EE)

Press conference speaking points

Brussels, 26 November 2009


Ladies and gentleman,

It is my great pleasure today to announce that we intend to review the current EU rules on package travel to give millions of consumers better protection if their holiday goes wrong.

Why do we feel that the current rules need a makeover?

First of all, our current EU law on package travel - the Package Travel Directive - was written almost 20 years ago, in 1990.

Back in those days, millions of European holidaymakers picked their package holiday from a glossy brochure and booked at a travel agent on the local high street.

The Package Travel insisted on:

- clear information in brochures,

- gave people the right to assistance if they had difficulties on the spot,

- gave them protection for substandard services,

- And it put in place insolvency protection if the tour operator or airline went bust.

But the 1990 Package Travel Directive is no longer suited for today’s travel market.

Increasingly large volumes of bookings are made by consumers putting together their own packages, often online.

Today, 56% of EU citizens organise their holidays themselves, so the number of those opting for a traditional pre-arranged package has fallen dramatically.

Just to give you one example, in 1997, 98 % of passengers travelling from the UK on leisure flights were protected by the Directive, now less than 50% are protected.

Fewer and fewer people are getting the holiday protection they deserve. That is NOT good enough. There are 3 main areas I want to focus on in this review:

1. The first, is the central issue of the Scope of the Directive.

Simply put, which of new kinds of package holidays should be covered by EU protection?

Most pressingly, we need to look at adapting the rules to take account of the "next generation" of "dynamic packages". This is where consumers make up their own package choosing two or more services, for example a flight and a hotel, either from one supplier – like Expedia or Opodo. Or from different suppliers that are commercially linked.

In the past 2 years, almost 1 in 4 EU citizens have booked these new "dynamic packages." In some countries, like Sweden and Ireland, the figure is as high as 40%!

My starting point is that we should look to extend the protection in the current directive as far as possible to cover all the new kinds of ‘dynamic packages.’ That way, we can provide more legal certainty for businesses and tough protection for consumers.

Of course we are looking forward to getting detailed feedback from industry and all stakeholders before taking final decisions on this issue.

Package Travel Label

Speaking of legal certainty, I want to draw your attention particularly, to the new ‘Travel Protection Label’ which we are considering introducing. The idea is to have a logo which makes it absolutely clear for consumers and businesses which holidays are covered by this Package Holiday Protection. I hope that this initiative will gain widespread support during the consultation.

2. Legal Responsibility

The second big issue we need to get right in this consultation is the issue of legal responsibility.

Simply put, who is responsible for what when things go wrong? Is it the carrier, is it the travel agent, is it the tour operator?

Today the old distinctions between carriers, tour operators and travel agents are often blurred. It is often not all that clear who is actually responsible for making sure that everything that is the holiday contract which the consumer signs has been properly carried out.

We urgently need to clarify these legal responsibilities.

3. Insolvency Finally, I want to come to the critical issue of protection for consumers in the

case of insolvency – in particular, what do when airlines go bust.

I know that many of you, like me, will have watched with great concern the TV pictures, as Sky Europe, XL, Future, Zoom and other airlines went bankrupt in recent months and years.

Thousands of airline passengers were stranded in airports across Europe, with worthless tickets, unable to get home. Like me, I am sure many of you watched with dismay and thought, how can this be legal? How can this be right?

Bankruptcy has become an increasing concern for European consumers. The rise of airline insolvencies has grown substantially. Between November 2005 and September 2008 alone, 29 airlines went bust.

In far too many cases European consumers found themselves "left out in the cold" unprotected and with no way of getting home.

Now is the right time to the ask the tough questions about the need to extend basic protection against airline bankruptcy to consumers across the board, including to stand alone airline tickets.

Ladies and gentlemen,

I Iook forward with great interest to getting feedback from industry, consumer organisations and the public on this consultation.

Armed with that feedback, I am confident we can get the right solutions and deliver: more low cost holidays; more competition; and more value for money and choice for consumers.

Thank you, now I am happy to take any questions you might have.

Friday, November 20, 2009

USA: Delta denies infringement of data privacy

In proceedings concerning a lawsuit accusing the airline of hacking into a computer of a passenger advocacy organization (see previous post), Delta has asked the federal court to dismiss the claim on the grounds that the plaintiff, founder Kate Hanni, had made the allegedly stolen emails public by forwarding them to an industry discussion group.

The lawsuit claims that Delta used stolen email to harm by derailing the group’s efforts to push through legislation aimed at limiting airplane tarmac delays to three hours.

Source: Travel Weekly; find article here>>.

Thursday, November 19, 2009

Australia: no exemption of Age Discrimination Act for cruise line

Australia's largest pleasure cruise company, Carnival Australia, a subsidiary of global Carnival Corp., demands that young adults aged 18 to 21 are accompanied by a parent or guardian if they book one of a range of South Pacific cruises from Australian ports from November through January. The policy aims to exclude large groups of students who celebrate the end of the school or college year usually by excessive drinking.

A rejected passenger lodged an age discrimination complaint with the Australian Human Rights Commission which Carnival responded by asking for an exemption from its so-called under-21 policy of the Age Discrimination Act.

The commission, however, rejected the exemption application as such exemption would undermine the law's aim of eliminating age discrimination in the provision of goods and services.

Source: msnbc; find article here>>.

European Court of Justice rules on differentiation between cancellation and long delay

In joined cases C‑402/07 and C‑432/07, the European Court of Justice today ruled as follows:

1. Articles 2(l), 5 and 6 of Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91, must be interpreted as meaning that a flight which is delayed, irrespective of the duration of the delay, even if it is long, cannot be regarded as cancelled where the flight is operated in accordance with the air carrier’s original planning.

2. Articles 5, 6 and 7 of Regulation No 261/2004 must be interpreted as meaning that passengers whose flights are delayed may be treated, for the purposes of the application of the right to compensation, as passengers whose flights are cancelled and they may thus rely on the right to compensation laid down in Article 7 of the regulation where they suffer, on account of a flight delay, a loss of time equal to or in excess of three hours, that is, where they reach their final destination three hours or more after the arrival time originally scheduled by the air carrier. Such a delay does not, however, entitle passengers to compensation if the air carrier can prove that the long delay was caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken, namely circumstances beyond the actual control of the air carrier.

3. Article 5(3) of Regulation No 261/2004 must be interpreted as meaning that a technical problem in an aircraft which leads to the cancellation or delay of a flight is not covered by the concept of ‘extraordinary circumstances’ within the meaning of that provision, unless that problem stems from events which, by their nature or origin, are not inherent in the normal exercise of the activity of the air carrier concerned and are beyond its actual control.

Obviously the court wanted to avoid the consequences of declaring substantial provisions of the Regulation void, as had been suggested by Advocate General Sharpston. Even if the result may be regarded satisfying, the interpretation by the court seems a bit like squaring the circle.

Judgement available for download here>>.

Wednesday, November 18, 2009

European court of Justice: Sardinian regional tax on touristic stopovers infringes Community law

Legislation adopted by the Region of Sardinia introduced, as from 2006, a regional tax on stopovers for tourist purposes by aircraft used for the private transport of persons or by pleasure boats over fourteen metres in length. The tax is payable by natural or legal persons who have their tax domicile outside the territory of the region. With regard to the pleasure boats, the tax applies to undertakings which carry out transport operations for remuneration or free of charge. With regard to the aircraft, on the other hand, the tax is payable only by undertakings which carry out air transport operations free of charge, for reasons connected with their business activities.

In the course of two actions brought against that law by the Italian President of the Council of Ministers, the Italian Constitutional Court made its first reference to the Court of Justice for a preliminary ruling.

In his judgment in Case C-169/08 the Court considered that the difference between residents and non-residents constituted a restriction on freedom of movement since there was no objective difference in their situations which could justify the difference in treatment as between the various categories of taxpayer.

The fact that taxpayers in Sardinia contribute, through income tax, to the activities of the region, even those for the protection of the environment, was irrelevant since the tax on stopovers was not of the same nature and did not pursue the same objectives as the other taxes paid by Sardinian taxpayers.

According to the Court, it is common ground that the tax concerns trade between Member States (since it applies to services provided in connection with stopovers by aircraft and recreational craft and concerns intra-Community trade) and it may distort competition (since it grants an economic advantage to operators established in Sardinia). In addition, the regional tax law which grants certain undertakings exclusion from the obligation to pay the tax in question involves a renunciation by the region of tax revenue which it would normally have received. Lastly, the tax confers a selective fiscal advantage only on enterprises established on the territory of the region, as compared with undertakings which do not have their tax domicile there, since those two categories of undertaking are in a comparable factual and legal situation when they receive stopover services in Sardinia.

Source: ECJ press release 101/09 of Nov. 17, 2009

Monday, November 16, 2009

Austria: Supreme Court decides on information duties with regard to hurricane hazard

Plaintiff and his fiancé wanted to go on vacation in late October 2005 and asked their travel agency for a destination of fair weather. The agency inter alia offered Yucatan/Mexico which they chose and booked a package tour for Oct. 16 to 30. When they left for Yucatan on Oct. 16, a tropical depression had developed in the Carribean which on Oct. 18 turned into hurricane Wilma. Plaintiff and his fiancé enjoyed their vacations until Oct. 19 when heavy wind came up and the hotel staff began to nail up windows. From Oct. 20 they were asked not to leave their room. The storm calmed down on Oct. 23 and left much of the neighbourhood of the hotel and most of the surrounding infrastrcuture destroyed. Plaintiff and his fiancé were flown home on Oct. 27.

They sued for refund of the full package price, compensation for loss of holiday enjoyment and some minor damages: the tour operator had been at fault because of failing to warn them from the upcoming hurricane. The tour operator argued the general hazard of hurricanes in the Carribean was a fact of general knowledge and hurricane Wilma had only developed after they had arrived.

Supreme Court upheld the decision of the court of appeal that plantiff was entitled to a partly refund of the package price (except for the first three days) as well as to compensation for loss of holiday enjoyment and further damages. Even though the general hazard of hurricanes in the Carribean indeed was a fact of general knowledge and the development of hurricane Wilam and its track not foreseeable at the time of booking nor at the time of departure, the tour operator should have informed about the duration of the hurricane season when hurricanes are more likely.

Although it was only ascertained that plaintiff had booked for fair weather, Supreme Court concluded that it was likely that he would have booked another destination if properly informed. Even though plaintiff and his fiancé neither would have enjoyed the particular package tour if information had been given they probably would have enjoyed another one of equal shape which therefore also constiuted loss of holiday enjoyment.

Supreme Court again opposed a conceptional formula to detetermine immaterial damages. Courts rather had to assess these damages due to the cicumstances of each individual case.

Judgement 4 Ob 130/09k of Sep. 29, 2009 is not published yet.

Germany: German courts have jurisdiction over airlines in other member states in regard to unfair terms

In a decision dated July 9, 2009, German Supreme Court (BGH) held that German Courts have jurisdiction over over an airline in another member state in regard to a law suit filed by a consumer protection association to cease in order to interdict the use of unfair terms in General Conditions of Contract.

However, whereas with regard to such infringement of consumer interests, the law of that state applies in which due to the statement of claim collective consumer interestes have been affected, validity of such General Conditions of Contract was subject to the law governing the contract.

BGH decision Xa ZR 19/08 of July 9, 2009 available for download in German here>>.

Tuesday, November 10, 2009

Florida: law suit against Expedia and Orbitz over hotel taxes

Florida’s Office of Attorney General has sued Expedia and Orbitz, the leading internet travel companies, claiming that these companies violated state law by failing to remit the appropriate amount of taxes on hotel room rentals. The lawsuit states that while Expedia and Orbitz have been collecting taxes from consumers, they have only been remitting a portion on the taxes based on the wholesale rate the online sellers get from hotels, not the retail rate consumers pay.

Source: Attorney General Bill McCollum News Release of Nov. 3, 2009

Friday, November 06, 2009

Florida: Injunction Sought Against Timeshare Resale Companies

Attorney General Bill McCollum on Nov. 2nd announced that his office has filed a lawsuit and has requested an emergency injunction against two related South Florida timeshare resale marketing companies. Universal Marketing Solutions, Creative Vacation Solutions, and owner/manager Jennifer Kirk allegedly collected over $4 million in marketing fees on a monthly basis, but rarely if ever marketed, advertised, or facilitated sales for the timeshare owners who had contracts with the companies. The injunction requests the companies’ cease doing any timeshare business while the lawsuit is pending.

In a statement released Nov. 3rd, the Americ
an Resort Development Association (ARDA) welcomed the move to seek an emergency injunction: Although there were many reputable companies that provided resale services, the largely unregulated secondary market also included some that used unscrupulous tactics to take advantage of owners who may wish to sell their timeshares.

Attorney General Bill McCollum News Release, ARDA press release.

Thursday, November 05, 2009

Austrian Supreme Court: compensation for loss of holiday enjoyment does not depend on certain percentage of price reduction granted for malperformance

Contrary to settled jurisdiction of Commercial Court Vienna, Austrian Supreme Court (OGH) in a recently published decision held that compensation for loss of holiday enjoyment would not depend on a certain percentage of price reduction granted for malperformance. Commercial Court Vienna had usually only granted compensation for loss of holiday enjoyment in cases were malperformance of the package tour contract entitled to a price reduction of at least 50 percent. In two previous decisions Supreme Court had not referred to a certain percentage of price reduction but argued that compensation for loss of holiday enjoyment could only be granted if a (not to low) treshold of relevant malperfomance was exceeded.

The new decision now emphasizes the different purposes of compensation for loss of holiday enjoyment on the one hand and price reduction for malperformance on the other hand and favours a position that compensation for loss of holiday enjoyment was only excluded in bagatelle cases. A treshold of entitlement to 50 percent price reduction would limit compensation for loss of holiday enjoyment to cases of massive annoyance which would not be in line with art. 5 of the European Package Travel Directive.

Full text of OGH decision 6 Ob 231/08a of Sep. 18, 2009 available in German here>>.

Greece: reference for preliminary ruling concerning hotel TV

Greek court "Arios Pagos" has filed a reference for preliminary ruling on wether the mere installation of television sets by a hotelier in hotel rooms and their connection to the central antenna installed in the hotel, without any other action, intermediation or intervention by the hotelier, constituted communication of the work to the public within the meaning of Article 3(1) of Directive 2001/29/EC, and, in particular, in accordance with the aforementioned judgment of the Court of Justice of 7 December 2006 in Case C-306/05 Sociedad General de Autores y Editores de España (SGAE) v Rafael Hoteles SA, and whether this would involve the distribution of a signal, via television sets, to customers who stay in the hotel rooms, by means of the technical intervention of the hotelier.

ECJ Case 136/09 - Organismos Sillogikis Diakhirisis Dimiourgon Theatrikon kai Optikoakoustikon Ergon v. Divani Acropolis Hotel and Tourism AE;
reference published in Official Journal of the European Union of 20.06.2009.

Brazil: 2007 Sao Paulo's crash caused by pilot error?

A military investigation into Brazil's deadliest air disaster reached no conclusion on blame, but officials said Saturday that pilot error rather than mechanical failure was the more likely cause.

A separate police investigation into the 2007 jetliner crash that killed 199 people blamed government and airline officials and recommended charges against 10 people — a case that is still tied up in courts.

Source: eTurboNews; full article by Bradley Brooks available here>>.

Space hotel to open in 2012

A first hotel in space will be open for business and accepting tourists by 2012 after an anonymous billionaire space enthusiast granted $3billion to finance the project. The Space Resort will charge 3 million euros for a three-night stay and eight-week training course on a tropical island before the trip.

Source:; find article here>>.

European Union: Commissioner Kuneva welcomes new report on airline charges

The report, which will be presented by the Norwegian Ombudsman Bjørn Erik Thon, is the result of a year long investigation by 11 national enforcement authorities (led by Norway). The in-depth study found that airlines are frequently including parts of their basic operational costs (handling charges, fuel charges, booking fees) into what appears to be obligatory "taxes and charges" – this can mislead consumers and falsely attract consumers to buying seemingly cheaper tickets.

The study covered 281 flights, 24 leading European airlines, as well as 34 major European airports.
The results of the investigation will feed into the industry agreement currently being elaborated following the EU enforcement sweep on airline ticket selling websites (see IP/09/783).

Source: Press release by Commissioner Kuneva; report on airline charges available here>>.

USA: HIV travel ban terminated

The U.S. federal government is removing HIV/AIDS from the list of communicable diseases that can keep a foreign visitor or immigrant from getting a visa or entering the U.S. Termination of the ban which has been in effect since 1987 will become effective by Jan. 4, 2010.

Source: Travel Weekly; find article here>>.