‘Final destination’ considered key by Court of Appeal in flight delay liability claims

Gahan v Emirates [12.10.17]

The Court of Appeal considered the availability of compensation for flight delays in circumstances where a passenger booked connecting flights with a non-community carrier, departing from an EU airport, connecting at a non-EU airport and reaching a final destination outside the EU. The result is not the news that carriers were hoping for.

The claim

Thea Gahan was scheduled to travel with Emirates from Manchester to Dubai, to meet a connecting flight onwards to Bangkok. Miss Gahan’s flight from Manchester was delayed just less than four hours on arrival in Dubai, resulting in Miss Gahan missing her connecting flight to Bangkok. Miss Gahan arrived at Bangkok 14 hours later than scheduled.

She sought compensation on the basis that she had arrived at her final destination with a delay in excess of four hours. The use of the term “final destination” is of upmost importance in this case.

Whilst Emirates accepted that Miss Gahan had a prima facie entitlement to compensation under Article 7, they argued, in accordance with the decisions in Emirates Airlines Direktion v Schenkel and Sanghvi v Cathay Pacific Airways that both the European and English courts had found that Regulation EC261/2004 only concerns itself with “flights” and not the overall journey.

Miss Gahan’s connecting flight was not within the scope of Regulation EC261/2004, which only applies to community carriers where the flight is departing from a non-Member State. As such, Miss Gahan’s claim should only consider the delay to her first flight to Dubai.

As the flight from Manchester was delayed less than 4 hours, Emirates argued that, as per the decision in Sturgeon v Condor Flugdienst GmbH, they were entitled to reduce the amount of compensation by 50%.

In response to this, Miss Gahan argued that following the CJEU decision in Air France SA v Folkerts, Regulation EC261/2004 should be interpreted so that the basis on which an entitlement to compensation is calculated is the delay on arrival at a passenger’s final destination. While the Folkerts claim was concerned with circumstances where there was already a qualifying delay on one of the intra community connecting flights, it was argued that the fact that the CJEU was not asked to consider the territorial scope of the Regulation in respect of non-community carriers with connecting flights that operated outside of a Member State was ultimately not relevant.

In the first instance, District Judge Benson in the Liverpool County court considered that he was bound by the decision in Sanghvi, and dismissed the Miss Gahan’s claim.

The appeal

On appeal, Emirates submitted that, as a non-community carrier, they were not subject to Regulation No 2027/97 (as amended) which incorporated the Montreal Convention into community law. Therefore, this was a matter for national law and not the interpretation of the Convention under community law. As such, the court was invited to consider the CJEU’s previous interpretation of the Convention only as persuasive, as opposed to being bound by it.

They also argued that to allow compensation in respect of a delay on arrival in respect of a connecting flight operated by a non-community carrier with a point of departure outside a Member State is outside of the territorial scope of the Regulation.

The Court of Appeal dismissed both submissions made by Emirates. The court held that Folkerts clearly indicated that the entitlement to compensation is based on the delay on arrival at the final destination. Regardless of whether the carrier was a community carrier, and that the connecting flight operated outside of a Member State, the right to compensation crystallises from the point that a delay to a flight departing from a Member State causes a qualifying delay to arise at the passenger’s final destination.

As a result of this decision non-community carriers will now be liable to pay compensation pursuant to Regulation EC261/2004 for flights that depart from an EU member state based on the time of arrival at a passenger’s final destination (but only where the delay occurs on a flight departing from an airport in a member state). Affected non-community carriers can expect to receive more claims from passengers who miss connections in non-EU airports.

Whilst this is not the decision that carriers was hoping for, it does at least provide some clarity to the case law in respect of delays arising from missed connections. As a small silver lining, the Court did highlight that regardless of the delay at the final destination, in order for Regulation EC261/2004 to apply, the delay must arise from a flight that departs from a Member State.