Cyriel Ruers and Paul Breithaupt are assisting an airline in its appeal against a fine imposed by the Inspectie Leefomgeving en Transport (Human Environment and Transport Inspectorate — ILT). The €40,000 fine was imposed for an alleged violation of the European Regulation on Compensation and Assistance to Air Passengers (Regulation 261/2004). The reason for the fine is the bankruptcy of travel agency D-travel and the alleged obligation for airlines to refund the ticket price to aggrieved passengers.
The proceedings before the administrative court relate to a fundamental dispute on the interpretation of the refund obligation under Regulation 261/2004. The ruling of the administrative court may have major consequences for the relationship between airlines and travel agencies (agents) in the aviation sector. It became apparent during the bankruptcy of D-reizen that large numbers of tickets had long since been refunded by airlines to D-reizen, but that the latter had often failed to pass on the ticket price to the passengers.
Passengers who were left empty-handed after the bankruptcy tried to reclaim the ticket price from the airlines. A number of airlines rejected that request on the grounds that they had already demonstrably refunded D-reizen. The ILT (a division of the Ministry of Infrastructure and Water Management) believes that airlines are required to ensure that the ticket price is refunded to passengers. According to the ILT, airlines must therefore refund the price again in the case of D-reizen. If this interpretation of Regulation 261/004 were followed, that would have major implications for the global agreements on the flows of funds between airlines and travel agents – also under IATA Resolution 824r – as well as for the operation of the IATA Billing and Settlement Plan (BSP).
The fines for violation of Regulation 261/2004 form part of a trend of increasing enforcement actions by the ILT against airlines flying at Dutch airports. For example, the ILT also recently imposed fines for violations of the rules regarding the use of slots at Schiphol Airport, among other places. This is the first time the ILT has imposed fines for alleged NO-OPs and NO-RECs since the publication of its Slot Enforcement Code. However, the legal basis of the Slot Enforcement Code is questionable. Appeals against these first so-called ‘slot abuse’ fines will have to shed more light on this issue.
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