Wednesday, 24 October 2012

Lufthansa Loses Court Challenge Over Delays Compensation

Airlines including DeutscheLufthansa AG (LHA) and British Airways lost challenges at the European Union’s top court over paying compensation to passengers delayed by more than three hours.

“Where passengers reach their final destination three hours or more after the scheduled arrival time, they may claim fixed compensation from the airline, unless the delay is caused by extraordinary circumstances,” the EU Court of Justice in Luxembourg said in a ruling today that confirms an earlier, precedent-setting decision by the court.

The ruling on two separate cases also involves EasyJet Plc (EZJ), TUI AG (TUI1)’s TUI Travel Plc unit and the International Air Transport Association. It upholds a 2009 decision that airlines have to compensate passengers who reach their final destination that much later because of a flight delay. Carriers are exempt from compensation in cases of extraordinary circumstances, such as a strike or bad weather conditions.

Lufthansa extended earlier declines to lose as much as 2.6 percent after the decision, and was trading 2.2 percent lower at 10.865 euros as of 3:07 p.m. in Frankfurt. Company spokesman Boris Ogursky declined to comment until Lufthansa has seen the full text of the ruling.

British Airways, a unit of International Consolidated Airlines Group SA (IAG), said it was aware of the ruling and would continue to comply with the regulations, according to an e- mailed statement. IAG shares fell 2.3 percent to 156 pence at 2:02 p.m. in London.

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