1. TRANSPORT LAW Some cases of unfair practices of airlines companies Degree Course : " Design of Sustainable Tourism Systems" Academic year 2015/2016 Laura Gonnelli and De Pascali Simona

2. KEY POINTS  Transport law Transportation contracts European and International regulations for transportation contracts  Consumers protection against unfair terms and practices European Directive 93/13 and European Directive 2005/29 Article 33 of the Italian Consumer Code Regulation 1008/2008  Case studies of airlines unfair practices Price transparency Compensation for damages

3. TRANSPORT LAW Transport law (or transportation law) is the area of law dealing with transport. The laws can apply at a transport system level or to transported things or activities. Transport law govern the conveyance of passengers or goods and apply to all kind of transportation: highways, mass transit, aviation, rail and maritime and motor carriers. Transport law is completed by a series of norms, which regulate passengers’ rights.

4. TRANSPORTATION CONTRACTS A transportation contract is an agreement between a Carrier and a Passenger. The object of the agreement is the provision of transport. The carrier undertakes to transport the passenger and/or luggage under general conditions that the passenger undertakes to observe and examine before booking and/or purchase of the ticket. The formation of this kind of contract, generally, consists in two phases:  booking  definitive contract We have some general conditions regulating these contracts and also special dispositions ruling the check-in time, the refunds and the carrier’s liability.

5. EUROPEAN AND INTERNATIONAL REGULATIONS

6. We have two main regulations providing for air carrier’s liability in case of accident: at European level, the regulation n° 889/2002 amending the Council Regulation (EC) n° 2027/97 at International level, the Montreal Convention of May 28, 1999, a Convention for the Unification of Certain Rules Relating to International Carriage by air, establishing that air carrier liability is unlimited in case of death or injury of the passenger. And one regulation providing for common rules on compensation and assistance to passengers in case of denied boarding or cancellation or long delay of flights: Regulation n° 261/2004 of the European Parliament and of the Council of 11 February 2004, particularly articles from 4 to 7. particularly articles from 4 to 7 At international level, we have a code of conduct adopted by IATA, which establishes that passenger should have clear and transparent information concerning taxes and charges before the purchase of the ticket.

7. Regulation n°261/2004

8. CONSUMER PROTECTION AGAINST UNFAIR TERMS AND PRACTICES: EU DIRECTIVE 93/13 B2C contracts may contain some unfair terms. In order to protect consumers, many European countries have adopted specific rules according to the European Directive 93/13 EEC. This directive gives a definition of “unfair term”, according to Article 3: 1. A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer. 2. A term shall always be regarded as not individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term, particularly in the context of a pre-formulated standard contract. In the Annex it provides also a list of terms that as to be regarded as unfair.

9. ARTICLE 33 OF THE ITALIAN CONSUMER CODE In the Italian Consumer Code, in the Part III (The consumer relationship), we can find dispositions against unfair terms, in accordance to the EU Directive. In particular, article 33 says: 1.In contracts entered into between consumers and professionals, terms shall be considered unfair where, contrary to good faith, they cause a significant imbalance in the rights and obligations arising under the contract, to the detriment of the consumer. At point 2 we find a list of unfair terms, which are the same present in the directive with some additional terms added by the Italian Consumer Code. MALGRADO LA BUONA FEDE

10. EU DIRECTIVE 2005/29 National law combats also unfair commercial practices, but as noted by the European Commission the laws of Member States show differences among them. For this reason the European Parliament and the Council adopted the directive 2005/29/EC concerning unfair business-to-consumer commercial practices in the internal market. This directive establishes a single general prohibition of those unfair commercial practices.

11. REGULATION (EC) N° 1008/2008 European countries adopted also some dispositions, which protect consumers from unfair practices. One particular regulation protects costumers from unfair practices with regard to air transportation, and it is the Regulation (EC) N° 1008/2008 of the European Parliament and of the Council of 24 September 2008 on common rules for the operation of air services in the Community. In the preamble, according points 15 and 16 we have:  Customers should have access to all air fares and air rates irrespective of their place of residence within the Community or their nationality and irrespective of the place of establishment of the travel agents within the Community  Customers should be able to compare effectively the prices for air services of different airlines. Therefore, the final price to be paid by the customer for air services originating in the Community should at all times be indicated, inclusive of all taxes, charges and fees. This points are recalled later in Chapter IV on “Provisions on pricing”, in the specific in article 23 (1) where we read also “[…] The final price to be paid shall at all times be indicated and shall include the applicable air fare or air rate as well as all applicable taxes, and charges, surcharges and fees which are unavoidable and foreseeable at the time of publication […] optional price supplements shall be communicated in a clear, transparent and unambiguous way at the start of any booking process and their acceptance by the customer shall be on an ‘opt-in’ basis”.The final price to be paid shall at all times be indicated and shall include the applicable air fare or air rate as well as all applicable taxes, and charges, surcharges and fees which are unavoidable and foreseeable at the time of publication

12. CASE STUDIES: AIR FARES TRANSPARENCY Case C-573/13 Air Berlin plc & Co. v Bundesverband der Verbraucherzentralen und Verbraucherverbände - Verbraucherzentrale Bundesverband e. V. (Federal Union of Consumer Organisations and Associations) on January 15, 2015. The Bundesverband brought an action against Air Berlin for unfair practices as the Air Berlin displayed the final price only in the last step of the booking process, thus violating article 23 (1) of the EU Reg. 1008/2008. The Bundesgerichtshof (Federal Court of Justice) identified two distinct problems in the interpretation of the second sentence of Article 23(1) of the regulation with regard to computerized booking systems.second sentence of Article 23(1)

13. The Bundesgerichtshof (Federal Court of Justice) requested guidance from the Court of Justice on the following issues: Is the second sentence of Article 23(1) of Regulation No 1008/2008 to be interpreted as meaning that the final price to be paid must, in the context of a computerized booking system, be indicated when the prices of air services are shown for the first time? the final price[…] must be indicated only for the air service specifically selected by the customer or for each air service shown? Taking into account the section 16 of the preamble and the article 23 of the previously mentioned regulation the Court ruled that: 1. The second sentence of Article 23(1) of Regulation (EC) No 1008/2008 must be interpreted as meaning that, in the context of a computerized booking system, the final price to be paid must be indicated whenever the prices of air services are shown, including when they are shown for the first time. 2. […] the final price to be paid must be indicated not only for the air service specifically selected by the customer, but also for each air service in respect of which the fare is shown.

14. AIR FAIRES TRANSPARENCY (2) Case C-487/12 Vueling Airlines SA v Instituto Galego de Consumo de la Xunta de Galicia, on September 18, 2014. In 2010 the company added a surcharge of 40€ to the base price of airline tickets bought by Ms Villegas when she checked in her baggage online. As Spanish law prohibits air carriers from charging for checking in passengers' baggage as an optional price supplement (national law art. 97 ), the Spanish Court condemned Vueling Airlines to pay an administrative fine of EUR 3 000. Art 97: “The carrier is required to carry passengers’ baggage with them, subject to weight limits, irrespective of the number of items, and size limits established by regulation, as part of the price of the ticket.” Vueling brought an action against the sentence, arguing that the administrative fine was contrary to the principle of pricing freedom as laid down in Article 22 of Regulation No 1008/2008. “Without prejudice to Article 16(1), Community air carriers and, on the basis of reciprocity, air carriers of third countries shall freely set air fares and air rates for intra- Community air services”

15. Therefore, the Court referred the following question to the Court of Justice: “Is Article 22(1) of [Regulation No 1008/2008] to be interpreted as precluding a national rule (Article 97 of [the LNA]) that requires passenger airlines to grant passengers the right always to check in a suitcase without paying a supplement or surcharge on top of the base price of the ticket purchased?” In this case, the Court of Justice, even noting that it is not of that Court to give a ruling on the interpretation of a national law, established that this particular article of the Spanish law contravene the rights of airline companies defined in art.22 of the Regulation 1008/2008. The Court stated also that when applying domestic law the national court must, as far as is at all possible, interpret it in a way, which accords with the requirements of EU law. Finally the Court of Justice ruled: Article 22(1) of Regulation No 1008/2008 must be interpreted as precluding a national law that requires air carriers to carry, in all circumstances, not only the passenger, but also baggage checked in by him, provided that the baggage complies with certain requirements as regards, in particular, its weight, for the price of the plane ticket and without it being possible to charge any price supplement to carry such baggage.

16. COMPENSATION FOR DAMAGES C ‑ 549/07 Friederike Wallentin-Hermann v Alitalia – Linee Aeree Italiane SpA, on December 22, 2008. The object of the case is the Alitalia’s refusal to pay compensation for flight’s cancellation due to a technical defect. Mrs Wallentin-Hermann requested that Alitalia pay her EUR 250 compensation pursuant to Articles 5(1)(c) and 7(1) of Regulation No 261/2004 due to the cancellation of her flight and also EUR 10 for telephone charges. Alitalia rejected that request.Articles 5(1)(c) and 7(1) of Regulation No 261/2004 In the judicial proceedings, the District Commercial Court of Vienna upheld the application for compensation, in particular on the ground that the technical defects which affected the aircraft concerned were not covered by the ‘extraordinary circumstances’ provided for in Article 5(3) of Regulation No 261/2004 which exempt from the obligation to pay compensation.Article 5(3) of Regulation No 261/2004

18. Taking into account all the premises and the international and common law the Court of Justice decided that: 1) Article 5(3) of Regulation (EC) N° 261/2004 must be interpreted as meaning that a technical problem in an aircraft which leads to the cancellation of a flight is not covered by the concept of ‘extraordinary circumstances’ within the meaning of that provision. Unless that problem stems from events, which, by their nature or origin, are not inherent in the normal exercise of the activity of the air carrier concerned and are beyond its actual control. The Convention for the Unification of Certain Rules for International Carriage by Air, concluded in Montreal on 28 May 1999, is not decisive for the interpretation of the grounds of exemption under Article 5(3) of Regulation No 261/2004. 2) The fact that an air carrier has complied with the minimum rules on maintenance of an aircraft cannot suffice in itself to establish that that carrier has taken ‘all reasonable measures’ and to relieve that carrier of its obligation to pay compensation provided for by Articles 5(1)(c) and 7(1) of that regulation.

19. CONCLUSIONS European and International laws always guarantee the respect of consumers’ rights. Tourism law is continuously updated in order to keep up with tourism evolution. Consumers have the right to know the final price during the entire booking process and for all possible options given by the company. European directives can influence and void sentenced stated in accordance with national laws. European Court of Justice’s judgements may become case laws, which can influence future sentence on similar problems.

20. REFERENCES: Regulation 1008/2008 http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2008:293:0003:0020:EN:PDF http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2008:293:0003:0020:EN:PDF Judgement of the Court, Case C-573/13 http://curia.europa.eu/juris/document/document.jsf?text=&docid=161390&pageInd ex=0&doclang=en&mode=req&dir=&occ=first&part=1&cid=340124 http://curia.europa.eu/juris/document/document.jsf?text=&docid=161390&pageInd ex=0&doclang=en&mode=req&dir=&occ=first&part=1&cid=340124 Regulation 261/2004 http://www.aviationreg.ie/_fileupload/Image/Regulation%20EC261%202004.pdf http://www.aviationreg.ie/_fileupload/Image/Regulation%20EC261%202004.pdf Judgement of the Court, Case C-487/12 http://curia.europa.eu/juris/document/document.jsf?text=&docid=157849&pageInd ex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=60020 http://curia.europa.eu/juris/document/document.jsf?text=&docid=157849&pageInd ex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=60020 Judgement of the Court, Case C-549/07 http://curia.europa.eu/juris/document/document.jsf?text=&docid=73223&pageInd ex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=60134 http://curia.europa.eu/juris/document/document.jsf?text=&docid=73223&pageInd ex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=60134 Italian Consumer Code http://www.codicedelconsumo.it/Codice_del_consumo_english_version.pdf http://www.codicedelconsumo.it/Codice_del_consumo_english_version.pdf European Directive 93/13 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31993L0013:en:HTML http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31993L0013:en:HTML http://recent-ecl.blogspot.it/search/label/air%20travel

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