Q5: Are there circumstances where the airline can refuse compensation?
A5: Yes: these are referred to in the Regulation as “extraordinary circumstances”. There is no definitive list of extraordinary circumstances. Broadly speaking, extraordinary circumstances are events that are outside the airline’s control and the concept also implies a departure from what can be expected in the normal course of operation.
As a rough rule of thumb, events such as weather delays, ATC delays, cancellations due to strikes or to political instability (war, terrorism threats, etc...),are usually regarded as constituting extraordinary circumstances. Even then, however, each case must be looked at on its merits to ascertain the “extraordinary” character of the event.

Q6: do delays and cancellations due to mechanical problems with the aircraft constitute “extraordinary circumstances”?
A6: the same principle applies for technical problems as for other extraordinary circumstances: ‘ordinary’ technical problems that occur in the normal course of business are not regarded as extraordinary circumstances. On the other hand, a delay that would result, for instance, of damage to the aircraft due to sabotage or terrorism, or a request by Boeing or Airbus to review certain mechanisms on all aircrafts of a particular model following the discovery of a hidden defect would constitute an ‘extraordinary circumstance”.
In practice, therefore, most mechanical problems are unlikely to constitute extraordinary circumstances.