The 14-day rule is relevant for the compensation of 600 Euro per pax.
Airline has also to take care of re-imbursement for all costs related to the cancelation (hotels, connection flights etc)
Only thing in court might be the discussion about extraordinary circumstances. However, since this fare was created by the airline itself without any influence from outside, this will probably not be relevant.
Our flights are next week. That's the reason we are quite familiar with the rules.
Please see the exact wording also below.
If your flight is cancelled you have the right to choose between reimbursement, re-routing or return.
You are also
entitled to assistance at the airport.
If you were informed of the cancellation less than 14 days prior to the scheduled departure date, you have a right to compensation. The airline has the obligation to prove if and when you were personally informed that the flight was cancelled. If this is not the case you can contact your
national authority
for further assistance.
However,
compensation is not due if the carrier can prove that the cancellation is caused by
extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken. The airline has to prove this by providing, for example, extracts from logbooks or incident reports. The air carrier should give this evidence to the relevant national enforcement body as well as to the passengers concerned in line with national provisions on access to documents.
Addition:
For everyone being sceptical if LATAM will pay this - that's the reason why there is a national enforcement body. EU court has decided 2 months ago, that a traveler can bring the airline to court in the departure country (in this case Spain(. This also means that Spanish law is relevant and the national enforcement body in Spain.
Some people mentioned, that EU261 would not count for connections This is wrong. The entire trip is covered as soon as it starts from a European airport or is carried out by a European airline. Relevant is, that all segments are on one ticket. Carrier decision is based on who issued the ticket.
In our case: Ticket issued by LATAM but starts from a European airport. All segments on same ticket -> entire trip is covered by EU261