There have been lengthy discussions between the OFT and the airlines and an agreement was apparently reached last September.
See OFT press release PN 36/00 at http://www.oft.gov.uk/html/rsearch/press-no/pn36-00.htm with more details at http://www.oft.gov.uk/html/new/airline.htm.

Clearly, the OFT only has jurisdiction within the UK. However, IATA has changed its recommendations to members more or less in line with what the OFT suggests. These are recommendations only, however, and airlines are free to adopt them or not.
Within the EU context, it is arguable that many standard terms in airline carriage contract are of dubious validity in the view of the Unfair contract terms directive.