The Enforcement of Air Passenger Rights: An Analysis and Comparison of Claims Management Companies and Recently Established Conciliation Bodies

Abstract

Based on a regulation the European Union issues common rules on compensation and assistance to air passengers in the event of denied boarding and of cancellation or long delay of flights. Nevertheless, since the regulation came into force in February 2005, one could observe that the legal framework itself has suffered from many undefined terms and loopholes, so that it had to be supplemented by an increasing body of case law. Several reasons like the unclear legal situation, high transaction costs for a lawsuit in relation to a relatively low amount of compensation and the strategical behavior of the airlines not to handle passengers’ complaints in a correct manner, led to the situation that affected air passengers were deterred from enforcing their rights. The objective of the paper is to analyze, how new business models in form of claims management companies (e.g. Flightright, EUclaim, FairPlane, … etc.) have successfully established themselves on the market. In comparison, as another effective tool for the enforcement of air passenger rights, recently founded conciliation bodies are taken into consideration; whereby the Conciliation Body for Public Transport in Germany serves as an exemplary model.