The European Union’s highest court, the Court of Justice, ruled that cancellation fees charged by airline companies may be assessed for unfairness.
The court was considering a complaint brought by the Verbraucherzentralen Bundesverband (VZBV), the Federal Union of Consumer Organizations, against AirBerlin, Germany’s second-largest airline.
The VZBV, the Federal Union of Consumer Organizations, is a non-governmental organization that acts as an umbrella for 41 German consumer associations.
The group says that the provision in Air Berlin’s contract of carriage calling for a €25 handling fee when a passenger cancels a flight booking at an economy rate or does not take the flight is invalid under German law, “since it unduly disadvantages customers.”
It originally took its complaint to Germany’s Federal Court of Justice, which in turn asked the EU court for an interpretation of regulations governing the operation of air services.
The Court of Justice agreed with the VZBV, saying:
The pricing freedom recognized for air carriers by the regulation on the operation of air services does not preclude the application of a national law transposing the directive on unfair terms from leading to a declaration of invalidity of a term in the general terms and conditions and which allows separate flat-rate handling fees to be billed to customers who cancelled their booking or did not take a flight.
However, when the Court of Justice is asked for an interpretation, it does not decide the dispute itself. It is up to the national court or tribunal to dispose of the case in accordance with the court’s decision, which is similarly binding on other national courts or tribunals before which a similar issue is raised.
Christoph Klenner, secretary general of the European Technology and Travel Services Association, said he expects “significant repercussions” from the high court’s decision, notably since the European Commission is about to open EU Regulation 1008/2008, which governs the display of airfares, for review.
“A consultation on this regulation is expected to be launched soon, possibly in September or October,” he said in an e-mail.
“It is becoming clear that more specific rules have to be issued on air fare displays, and on all aspects of refunds, changes, etc.”