European Union has well defined consumer protection laws when it comes to air travel (EC 261/2004) that we have and continue to cover here on LoyaltyLobby. All airlines operating from the Union (+ Norway, Iceland + Switzerland) are bound by the law and community carriers fights to the union as well.
National Enforcement Bodies are supposed to meditate disputes with airlines and consumers when it comes to these cases. In Finland the body is rather toothless because it can only issue suggestions that Finnair has decided not abide by.
Here’s the announcement from the Finnish Consumer Ombudsman’s board:
The Consumer Ombudsman has filed an application to the Market Court for an injunction for Finnair’s practice of denying passengers the full standard compensation when the reason for the cancellation or delay of a flight is an unexpected technical fault caused, according to Finnair, by a manufacturing or design fault. This, however does not as such qualify as a reason for not paying the standard compensation according to the case law of the European Court of Justice.
Instead of paying the passengers the standard compensation, Finnair usually offers them a voucher or cash that is lower than the standard compensation. The requirement for accepting such an offer is that passengers waive their right to their statutory right to the full standard compensation. When answering consumers, Finnair gives a misleading picture of the requirements of current legal practice, Finnair’s obligations and passenger rights. It is for these practices, too, that the Consumer Ombudsman is seeking an injunction from the Market Court.
The Consumer Ombudsman is demanding that the Market Court include a conditional fine of EUR 500,000 to each of these three injunctions. The Consumer Ombudsman’s application was submitted to the Market Court on Wednesday, 27 September 2017. Before submitting the matter to be decided by the Market Court, the Consumer Ombudsman and the Finnish Transport Safety Agency Trafi have had lengthy negotiations with Finnair.
Hundreds of complaints and mandatory EU-rules in the background
Hundreds of consumers have been in contact since autumn 2015 with the Consumer Ombudsman and consumer right advisers working at register offices, complaining that Finnair has not paid them the standard compensation for flight cancellation or delay that they are entitled to by law, ranging between EUR 250 and EUR 600 depending on the length of the flight and destination.
The EU regulation on air passenger rights states their minimum rights if, for example, their flight is cancelled or delayed. The regulation and the established practice of the European Court of Justice indicate when passengers have the right to the standard compensation when a flight is cancelled or delayed, and also when the airline does not have to pay the standard compensation. The regulation specifies the amount of standard compensation that airlines are obliged to pay.
The primary objective of the Consumer Ombudsman is to make the company acting in breach of the law to stop doing so or to persuade it to change its actions voluntarily. If the company cannot be persuaded to discontinue its illegal practice, the Consumer Ombudsman will have to resort to coercive measures or to submit the case to a court of law. The Consumer Ombudsman will not comment on the case while it is being processed by a court of law.
So, Finnair has basically disregarded the EU law and decided not to pay these valid claims. This wouldn’t come as a surprise to anyone if you look at how many times their long-haul flights have been delayed. 600 euros to every passenger on the plane and (180,000 euros) suddenly the airline wouldn’t be very profitable. The airline basically has had too ambitious schedule for the number of long-haul aircraft and pilots they have.
Good that the Consumer Ombudsman has finally decided to take the Finnair to Market Court. I thought that there was some sort of collusion going on because Finnair is majority owned by the Government of Finland (more than 55%).
Finnair has been paying these EU claims for claimants outside of Finland knowing that other regulators are not as toothless and better small claims court venues exists such as the Money Claim in the UK.
Let’s hope that Finnair adjust their internal procedures and pays promptly valid claims for those residing in Finland as well.