Page last updated at 16:39 GMT, Thursday, 22 April 2010 17:39 UK

Volcano ash: Ryanair backs down over expenses

Ryanair admits refund mistake

Ryanair has backed down over a decision to limit the expenses payments paid to stranded passengers for food and accommodation.

On Wednesday, the Irish airline had said that expenses refunds would be limited to the same amount that passengers had paid for their ticket.

However, the carrier says it will now pay all "reasonable expenses" to passengers.

Thousands of travellers have faced lengthy waits because of the ash cloud.

Rules

Under EU regulations, if a flight is cancelled, those flying with European carriers into or out of the EU have the right to a refund or to be re-routed.

Passengers arrive home

If passengers chose the latter, they have the right to care - such as accommodation and meals - while they wait.

For some passengers, this means sending the receipts for hotels and meals into the airline for reimbursement.

Ryanair boss Michael O'Leary described the regulations as "flawed" and initially said that he would only pay these expenses up to the value of the ticket - so somebody who bought a 30-euro ticket would only receive 30 euros to cover their food and accommodation costs when stranded.

Lawyers, consumer groups and the Irish Commission for Aviation Regulation said this stance was illegal and any passengers going to the small claims court were likely to win their case.

So, now Ryanair has reversed its decision and Mr O'Leary admitted to the BBC that he had made a mistake.

"The events of the last seven days, under which Europe's airlines were prevented from flying by the closure of European airspace, highlight how absurd and discriminatory the EU261 regulations are towards Europe's airlines," he told BBC News.

"While competitor ferry, coach and train operators are obliged to reimburse passengers' reasonable expenses, this reimbursement is limited to the ticket price paid to those operators.

EU REGULATIONS

"Yet the airlines are required by regulation to meet potentially unlimited expenses, in circumstances where there has been a catastrophic closure of European airspace over the past seven days, as EU governments and regulators wrongly applied a blanket ban on flights over European airspace.

"We will continue to work through the European Low Fares Airlines Association (ELFAA) and other industry bodies to persuade the European Commission and the European Parliament to alter this regulation to put this reasonable limit on these reimbursement claims."

Mr O'Leary warned passengers that if they had stayed at luxury hotels during their wait for a flight, and put in receipts for thousands of pounds, they would not get their expenses back.

"If it [a claim] is reasonable it will get reimbursed, if it is not reasonable it will not," he said.

He said he would try to recover the costs to the airline from the EU, adding that the disruption had cost Ryanair between 30 and 40 million euros (£26m - £35m).

Other airlines

The decision was echoed by BMI which also initially said it would not cover passengers expenses.

It also reversed its decision and said that reasonable expenses would be refunded.

But Jet2 has continued in its bid not to cover stranded passengers' expenses.

"We appreciate some of our Jet2.com customers may have unfortunately incurred additional expense due to this extraordinary situation, which was entirely outside of our control. These expenses will not be reimbursed by Jet2.com," it said in a statement.

"We will consider further options for passenger claims as the situation becomes clearer over the coming weeks," Philip Meeson, of Jet2 said later, adding that it had spent £3m on bringing customers home, including by coach and ferry.

It also said that it would only put passengers on alternative flights within seven days of the original flight which also appears to go against the regulations which state that passengers should be re-routed "at a later date at the passenger's convenience, subject to availability of seats".

Flights

The disruption has led to differing interpretations of the law on flights.

Some flight-only travellers with Tui - which owns Thomson - whose original flights were cancelled are being told that they would have to pay the difference if an alternative flight the passenger chooses is more expensive.

"Tui UK and Ireland can confirm that customers who rebook to a different flight of their choice which is more expensive than their original must cover the difference themselves. Similarly, if the flight is cheaper Thomson Airways will refund the difference," the company told the BBC.

But the official airline watchdog in the UK, the Air Transport Users Council, disagrees.

"If the airline tells you that your flight is cancelled and you want a new flight rather than a refund, the date of the new flight should be at your convenience - not subject to any time limit - and you should not have to pay any more money," it said.

And Jacqueline Beadle, a solicitor at Gullands in Kent, said there was nothing in the EU regulations that said people have to make up the extra cost.

However, those who have chosen a refund and rebooked themselves would have to pay the current price quoted.

Those who did not wait to be re-routed and instead made their own travel arrangements to get home have to make a claim for that cost to their airline. If the cost is deemed unreasonable, they might not get all their money back. Equally, they might not get refunded for accommodation and food costs.



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