A legal bid to block new European Union air passenger rights has been thrown out by the European Court of Justice.
Cancelled flights in the EU could mean compensation
Airlines had complained that EU-wide rules forcing them to offer greater compensation for delays, cancellations and overbookings were too costly.
But the Luxembourg-based Court of Justice said the regulations introduced in February last year were "valid".
The EU rules set compensation at between 250 euros (£173) and 600 euros, depending on the length of the flight.
The attempt to block the introduction of the new rules was brought by the International Air Transport Association (IATA) and the European Low Fares Airline Association.
Budget airlines had argued that the rules meant that in some cases they would be forced to pay out more in compensation than their original cheap rate of travel.
Speaking before the ruling, IATA director general Giovanni Bisignani said airlines accepted the need to compensate passengers unable to board flights.
But he added: "With this regulation, the EU regulators have endangered the consumer interest they seek to protect."
However, the Court of Justice said the legislation was in line with EU rules and could continue as planned.