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Airlines to compensate for delays: EU

Similar compensation is on offer if the airline is held responsible for cancelling a flight.

business Updated: Jan 12, 2006 11:17 IST

European airlines on Tuesday lost a legal bid that aimed to strike down new EU rules guaranteeing passengers compensation for flight delays or cancellations.

The European Court of First Instance said the rules were a fair penalty that didn't discriminate against low-cost carriers, dismissing the airlines' claims that the rules infringe international agreements and breach existing legal principles. The new rules came into force in February.

They oblige airlines to pay passengers up to euro600 ($725) if they are bumped off a flight, double the previous limit.

Similar compensation is on offer if the airline is held responsible for cancelling a flight. Delays of two to four hours will require airlines to serve snacks or full meals, while delays over five hours entitle passengers to a refund and a hotel room if necessary. Refunds of return flights must be offered if the journey is no longer necessary, for example if a business meeting is missed.

The International Air Transport Association _ which represents 270 carriers worldwide- estimates that the regulation will cost the industry more than euro600 million ($725 million) a year at a time when it is facing higher fuel charges and increased competition.

Low-cost airlines said the compensation is often much higher than the cost of their tickets and forces them to pay in cases that are beyond their control.

First Published: Jan 11, 2006 11:56 IST