EU court: Airlines must not charge cancellation fees

The European Court of Justice (EJC) has ruled that airlines cannot levy additional charges if a consumer cancels a flight. German judges had asked the court to rule on airberlin’s refund policy and disclosure of additional taxes.

According to a statement released July 6 in Strasbourg, airberlin stated in its general terms and conditions that when a passenger cancels a flight booking at an economy rate, or does not take the flight, a sum of €25 ($28.40) is to be charged as a handling fee on the amount to be reimbursed.

The Bundesverband der Verbraucherzentralen (Federal Union of Consumer Organizations) considers the charge to be invalid under German law, since it unduly disadvantages customers. Moreover, as it is the performance of a legal obligation, airberlin cannot charge separate fees. In the context of the same action, the Bundesverband also challenges airberlin’s practices concerning the display of prices on its website.

ATW understands carriers can no longer levy extra charges against customers who either miss or cancel their flights. The ruling means airlines can no longer hide those additional charges in the airfare or cancellation fees.

Regarding price transparency required by the regulation on the operation of air services, the ECJ said it finds that when publishing air fares, air carriers must specify separately the amounts payable by customers in respect to taxes, airport charges and other charges, surcharges or fees and may not—as a consequence—even partially include those items in the air fare.

The court also said it finds that air fare, taxes, airport charges and other charges, surcharges and fees that make up the final price must always be brought to the customer’s attention in terms of the amounts they represent in the final price.

According to the ECJ, if air carriers were able to choose between including those taxes, charges, surcharges and fees in the air fare and indicating those different items separately, the objective of the regulation to ensure information and transparency with regard to prices would not be achieved.