The European Court of Justice, the EU's highest court, issued a landmark ruling on Thursday that significantly strengthens the rights of air travelers. The ruling requires airlines to reimburse passengers for the full amount paid, including commissions charged by travel agents and intermediary platforms, in the event of flight cancellations, regardless of whether the airline was aware of the precise value of those commissions.
Case details and legal background
This decisive ruling came in the wake of a legal dispute that arose when passengers purchased tickets from Vienna, Austria, to Lima on a KLM Royal Dutch Airlines flight through an online travel agency platform. When the flight was canceled, the airline refunded the passengers the base fare but refused to reimburse them for approximately €95 (around $110) representing the agency's commission, claiming it had not received this amount and was unaware of its value.
The case escalated to the Supreme Court of Austria, which in turn requested a legal opinion from the European Court of Justice to determine the extent to which this compensation is mandatory in accordance with the EU's strict regulations on consumer protection.
Evolution of travelers' rights in the European Union
This ruling marks a significant development in European jurisprudence. In 2018, the court had previously ruled that airlines were only obligated to refund commissions if they were aware of them beforehand. However, today's ruling overturns this concept, confirming that an airline's ignorance of the commission amount does not absolve it of responsibility towards the passenger.
This approach is based on the principle that an airline ticket is a single, indivisible unit for the consumer, and that the agent who issues tickets on behalf of the company is considered an authorized partner, making the company responsible for all costs incurred by the traveler to obtain the service.
The impact of the ruling on the travel and tourism sector
This decision is of paramount importance to the global and European travel sector, especially given the increasing reliance of travelers on online booking platforms and digital travel agencies (OTAs) instead of direct booking. The ruling provides additional protection for consumers who were previously caught in the middle of blame-shifting between airlines and travel agencies when flight disruptions occurred.
The court explained in its ruling that the commission is an “indispensable” part of the ticket price and therefore should be considered implicitly approved by the airline as long as it authorizes the agent to sell its tickets. This ruling is expected to prompt airlines to review their contracts with travel agents to ensure greater transparency in pricing and commission structures to avoid future losses.
