Punitive compensation needed

Old Jul 14, 22, 3:19 am
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Punitive compensation needed

On Tuesday evening I watched a TV programme about travel disruption. Various people were interviewed and one clear message was that the airlines did not meet their legal requirements when flights were delayed and cancelled. This also arises on this forum on an almost daily basis when people seek advice about compensation. BA so often deliberately rebuffs claims and tries to get the individuals to give up. We read so many reports of BA refusing or ignoring claims until legal action occurs, which they don't fight but simply pay up immediately before the actual court considers the case. But most people will probably give up before that point.

I think it is time that compensation became punitive to force airlines to meet their obligations. The EU/UK delay compensation should be doubled if not paid within a week, and doubled again if still outstanding in a fortnight and so on like the grains of rice on a chess board. Refusal to rebook flights or accommodation immediately could be sanctioned by the same system of escalating fines. Consequential losses should be met and again their payment enforced by punitive fines. BA, and others, clearly find it cheaper at the moment to cheat their passengers rather than meet obligations and something needs to be done.

I also wonder if the police could consider arresting airline staff who knowingly lie to passengers about their rights; seems like fraud to me when done with the intent of depriving people of what they are legally due.
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Old Jul 14, 22, 3:27 am
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Couldnt agree more. Theres no rational argument for continuing the status quo.
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Old Jul 14, 22, 3:37 am
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I'd settle for proper enforcement of passengers rights and heavy fines being levied on airlines that persistently deny passengers their rights.
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Old Jul 14, 22, 4:01 am
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Would be a good long term solution if the FAA/EU/CAA forced airlines to list flights(on their respective websites) which are available for compensation.
Would solve the problems for pax & courts.
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Old Jul 14, 22, 4:09 am
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Originally Posted by diamantaire View Post
Would be a good long term solution if the FAA/EU/CAA forced airlines to list flights(on their respective websites) which are available for compensation.
Would solve the problems for pax & courts.
If the first response to every EC261 claim is somewhere between half-truth and lie (in order to avoid compensation), why would an airline-produced list be any different?
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Old Jul 14, 22, 4:10 am
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Originally Posted by Bohinjska Bistrica View Post
I'd settle for proper enforcement of passengers rights and heavy fines being levied on airlines that persistently deny passengers their rights.
This is the crux of the issue, EC261 is not effectively enforced. This is not just BA and not just the UK but wherever you look, national enforcement bodies hardly ever intervene and I have never heard of an airline being sanctioned for not fulfilling their obligations.

But we are where we are, and I doubt that anything we can do at this stage will change the attitude of the NEB's. In fact, I suspect the NEB's would probably plead staff shortages and lack of resources to effectively patrol this minefield. I have mentioned on here before and recently that I now also believe punitive measures should be activated. I'm not sure if weekly doubling of compensation by way of fines is generally the right way to proceed but a strong disincentive is required. How many employee hours at airlines are used by this constant unfair denial of compensation? How much faster would other people's claims be processed if the airline just paid up when due and only denied when not due.

The problem will be proving wilful deceit. Now, obviously some airlines have form for this, and BA is by no means the worst offender, and indeed honest mistakes can often be made, but where an obvious case is denied and then later proven, I do believe the burden on the airline should at least be doubled.

Now, the other question is, how many airlines would be in danger of going bust due to this. If, as I read and suspect might be correct, only 20% of compensation due is actually paid, this is potentially endangering the existence of some airlines.
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Old Jul 14, 22, 4:20 am
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Originally Posted by Tafflyer View Post

Now, the other question is, how many airlines would be in danger of going bust due to this. If, as I read and suspect might be correct, only 20% of compensation due is actually paid, this is potentially endangering the existence of some airlines.
Indeed. And this is what the industry will claim - "customers will ultimately pay for the compensation and/or some airlines will go broke lessening competition and putting employees out of jobs"

Of course in the real world, if current airlines and their managers cant compete in a lawful manner they should go out business and let competitors pick up the business. The aircraft and most if not all the customer demand will still be there and they will also need to employ people.
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Last edited by SW7London; Jul 14, 22 at 4:44 am
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Old Jul 14, 22, 4:34 am
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Punitive compensation - sure, although it would push fares up. Be careful what you wish for.
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Old Jul 14, 22, 4:44 am
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Originally Posted by Flexible preferences View Post
Punitive compensation - sure, although it would push fares up. Be careful what you wish for.
This argument was used a lot in financial services when enforcement was toughened and punitive sanctions introduced. There is zero evidence in that sector that it impacts the price customers pay and there is no evidence air travel should be any different.
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Old Jul 14, 22, 4:51 am
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Originally Posted by Flexible preferences View Post
Punitive compensation - sure, although it would push fares up. Be careful what you wish for.
Currently airlines calculate (or assume) that employing lawyers or paralegals to routinely deny claims saves them more money than paying valid claims. Either we enforce the rules, which has failed, or we adjust the cost through punitive compensation. Competition will remain the same and market rules also don't change. If an airline feels it has to increase prices, then they are free to try and see what happens.

Fares are already sky high and that is due to supply and demand. They are not high because airlines are currently paying such huge sums in compensation.
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Old Jul 14, 22, 4:54 am
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Originally Posted by Flexible preferences View Post
Punitive compensation - sure, although it would push fares up. Be careful what you wish for.
No logical reason why it should. where airlines are complying with the regulations, then they wouldnt be impacted - with a penalty not to comply , then those curently trying to avoid paying where due would have an incentive to pay promptly.

The only way an airline could make that argument would be to admit that it is deliberately breaching the rules - hardly a compelling argument against it

One element that would improve fairness if trying to implement such penalties, would be to make non EU airlines liable under the regulation both to and from EU/UK rather than just from EU/UK
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Old Jul 14, 22, 5:04 am
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Originally Posted by Dave Noble View Post
One element that would improve fairness if trying to implement such penalties, would be to make non EU airlines liable under the regulation both to and from EU/UK rather than just from EU/UK
This, I like. And it could also prompt other authorities (here's looking at you DOT) to also enact stronger consumer protections.
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Old Jul 14, 22, 5:21 am
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It does seem to me that such systemic bad faith from the airline industry at the moment especially suggests a more heavy-handed regulatory approach is justified.
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Old Jul 14, 22, 5:31 am
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I made a relatively similar/parallel point a while ago, saying that at the moment, the incentive structure for airlines to do the right thing is failing because if airlines refuse to pay compensation, you go to CEDR, and they lose, they are no worse off financially than if they had paid in the first place, they win because some people will give up before, and they win again because even when they lose, the money has in fact stayed on their account for longer.

I personally think that the right solution would be that each time an airline loses an EC261//UK261 case at CEDR or MCOL, they need to pay an additional 50% of the amount due as a fine.
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Old Jul 14, 22, 5:45 am
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Originally Posted by Flexible preferences View Post
Punitive compensation - sure, although it would push fares up. Be careful what you wish for.
I'm already paying insanely high prices (for example, nothing less than 400 return CE between Edinburgh and London at the moment) and yet BA is cancelling my flights multiple times on each booking while universally denying all compensation claims saying it's all Heathrow's fault. And even if I do get lucky enough to fly, I'll probably be heavily delayed, get no catering and my bags will be left in a warehouse for a fortnight.
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