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Air Passenger Rights

We received a comment from a reader via Fukuoka Now’s Facebook page, asking me to write about passenger’s rights regarding flight cancellations. I conducted some research and will explain flight cancellations and the relevant laws here. Thanks to this reader, I learned some new things, including the EU regulation 261/2004, which I was unfamiliar with.

Due to COVID-19, many flights have been canceled. My flight to Tokyo for a court hearing, which had been scheduled in April but was postponed, was also canceled. If the flight was an international flight, a cancellation fee could be expensive. I will explain the relevant law, inevitably covering both international and domestic aspects.

Montreal Convention

There is a treaty called the ‘Montreal Convention’ [1], which regulates air carriers’ civil liability when passengers, baggage, and/or cargo suffer damage in international air transport. One hundred thirty-three countries, including Japan, have ratified the Convention. Therefore, you may assume most international flights will be regulated by it.

Under the Convention, if your flight is delayed or canceled, the airline must take care of you. For instance, if you have to wait long enough, they need to provide you with food and drink. If you have to spend the night, they need to arrange accommodation and transport to and from the airport. If you have incurred expenses due to the lack of care offered by the carrier, they need to reimburse you. When I stopped over in Shanghai 10 years ago, my flight was delayed, and I was taken to a hotel. The hotel was not nice, but they took care of me, thanks to the treaty.

However, if your flight is canceled and no alternative flight is placed, it generally falls outside the treaty’s scope. Legally speaking, this is a matter of nonperformance, which would be governed by the airline’s contract of carriage (i.e., terms and conditions) and the applicable law. Most airline’s contracts of carriage contain a ‘force majeure’ clause making the carrier liable only for a refund of the unused ticket. Prohibitions on travel due to COVID-19 would qualify as a ‘force majeure’ [2] event. This means the unused ticket will be refunded, but expenses incurred due to the cancellation such as a hotel and/or transport costs (if any) will not be reimbursed.

Note:
[1] Convention for the Unification of Certain Rules for International Carriage by Air. You can read the full text here.
[2] Unforeseeable circumstances that prevent someone from fulfilling a contract.

EU regulation 261/2004

EU 261/2004 [3] is an extension of the Montreal Convention. It applies (1) if your flight departs from the EU or (2) if your flight arrives in the EU from outside the EU and is operated by an EU airline. For instance, if your flight departs from Fukuoka Airport to Helsinki Airport and is operated by Finnair, you will be able to enjoy the right under EU 261/2004.

Under the EU 261/2004, in addition to reimbursement of your financial loss due to the delay or cancellation, you are to be compensated with €250 (≒ JPY30,000), €400 (≒ JPY50,000) or €600 (≒ JPY70,000), depending on the distance covered by your flight and the time of your delay.

There is, however, an exception like almost any rule. Paragraph 3 of Article 5 of the regulation says an airline will not be obliged to pay compensation if the cancellation is caused by ‘extraordinary circumstances’. On 18 March 2020, the European Commission issued guidelines on the impact of COVID-19 on these claims, which says the cancellation due to COVID-19 generally falls under this exception. This means you are usually not entitled to claim compensation under EU 261/2004 if the flight is canceled due to COVID-19.

Domestic flight

The Montreal Convention does not apply to a domestic flight. A domestic flight will be governed by the airline’s contract of carriage and Japanese laws. Some countries seem to have a domestic law equivalent to EU 261/2004 to regulate air passenger rights, but unfortunately, they don’t have such a law. Therefore, we have to follow the general laws, including the Civil Code and the Consumer Contract Act, to construe the contract, as necessary.

If an airline rather than a passenger cancels a flight, the passenger will be entitled to claiming a full refund without any charges. As said, my flight bound for Tokyo in April was canceled. The ticket was refunded without any cancellation fee. This applies even if the airline is forced to cancel, say, due to a prohibition order by the government, under the legal principle of risk. [4]

A problem is likely to occur where a passenger cancels the ticket due to fear of the spread of COVID-19 while the flight is in service. In this case, you must follow the carriage contract, which should oblige the passenger to pay some cancellation fee. If the cancellation fee is excessive, however, you might be able to rely on Article 9 of the Consumer Contract Act, which will partially invalidate any clause obliging a consumer to pay an excessive penalty.

Note:
[3] 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. You can read the full text here.
[4] Paragraph 1 of Article 536 of the Civil Code.

Credit card insurance

If you have booked with a credit card, you should check the possibility of insurance coverage under your card. Some companies might offer this service, and you may be able to cancel your trip and receive a refund through the insurance included with your credit card. Further, some companies such as American Express appear to be offering a special measure to reduce the loss resulting from cancellations.

Disclaimer: While every effort has been made to ensure that the information on this article is accurate at the time of posting, it is not intended to provide legal advice as individual situations will differ. If you do require advice or wish to find out more about the information provided and related topics, please contact the author.

Text by: Atty. Atsushi Miyake of Miyake Law, July. 2020.
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Kyushu
Published: Jul 14, 2020 / Last Updated: Jul 14, 2020

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