Airlines which cancel flights will have to book passengers on rival carriers if they cannot offer one of their own within 12 hours, under a new package of EU consumer measures to be unveiled.

The plans for sweeping changes to passengers’ rights represent the biggest reform to the EU aviation rules since they were introduced eight years ago. Subject to the approval of member states and the European Parliament, the new laws are due to come into force in early 2015. Under a regulation known as EU261, airlines are already required to refund passengers when flights are cancelled but they have frequently been accused of trying to dodge their obligations by forcing customers to drag them through the courts to obtain compensation.

Carriers in turn have campaigned for changes especially after facing a bill of more than £1bn following the eruption of the Eyjafjallajokull volcano in Iceland in April 2010.

They had to pick up the bill for looking after millions of passengers stranded when flights across Europe were grounded for nearly a week.

Under the changes, airlines will have to pay for a maximum of three nights’ hotel accommodation. The reforms will tackle some of the more controversial practices used by airlines. For example, carriers will be banned from charging passengers a fee to correct a misspelling of their name. Some airlines demand up to £160 for a passenger to correct a flight booking at the airport.

“It is very important that passenger rights do not just exist on paper,” said Siim Kallas, the vice president of the EU Commission. “We all need to be able to rely on them when it matters most – when things go wrong.  We know that the real priority for stranded passengers is to just get home.”

The reforms will also require airlines to give passengers information about why their flight was cancelled within 30 minutes of its scheduled departure. They will also have to acknowledge complaints within a week and respond within two months. Passenger rights will also be strengthened when an aircraft is stuck on the tarmac for more than an hour. Airlines will be obliged to provide water, turn on the air-conditioning or heating and make the lavatories available. The new rules will also clarify what are “exceptional circumstances” under which airlines will not be obliged to pay compensation.

Carriers will not be able to use mechanical problems as a reason to deny passengers payments of up to £525, depending on the length of the flight. However, the companies will no longer have to compensate for delays or cancellations caused by severe weather or strikes, although their obligation to provide care – such as hotel accommodation for stranded passengers – will remain.

Other concessions will see airlines not having to pay compensation until a flight is delayed by at least five hours – two hours more than at present. Under the current system, the right to compensation after only three hours made it more worthwhile for an airline to cancel the flight and save the cost of paying crew overtime, fuel and airport charges.

By David Millward, Transport Editor The Telegraph

13 Mar 2013