European Airlines Call on EU to Review Passenger Compensation Rules

Executives from 35 smaller European airlines sent a letter to EU officials on Tuesday requesting a pause in negotiations over changes to passenger compensation rules. The airlines cited a near doubling of jet fuel prices tied to the conflict in Iran and said their thin profit margins on regional routes leave them with little capacity to cover additional compensation costs.

The letter was sent by carriers including Air Serbia, SkyExpress, Luxair, Atlantic Airways, SprintAir, KLM Cityhopper, and Air Corsica. It was seen by Reuters. The airlines operate routes described as having very low profit margins, making payouts for disruptions more difficult to absorb.

Under the EU261 regulation in place since 2004, passengers can claim compensation starting at 250 euros for flights delayed more than three hours, with amounts rising according to flight distance. The European Parliament and EU member states are negotiating an update to these rules.

Parliament wants to keep the three-hour delay threshold for short-haul flights, while member states propose raising it to four hours. Airlines in the letter called for a longer threshold or no compensation at all but did not specify exact demands.

The two sides also differ on a Parliament proposal to guarantee passengers a free cabin bag of up to 7 kilograms. The airlines oppose this provision. Other elements, such as free seating for an accompanying adult next to a child or person with reduced mobility, are not in dispute.

"Conduct a full impact assessment, in the new geopolitical scenario, recognise the unique role of regional aviation, adjust the compensation regime to reflect operational realities, discourage flight cancellations and avoid pushing essential air links out of existence," the letter stated.

The airlines said Europe's connectivity depends on regional routes and warned that further financial pressure could threaten those links. The next round of EU talks is scheduled for 2 June.