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Marketplace Morning Report

Euro airlines dread paying for volcano

Stephen Beard Apr 22, 2010
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Steve Chiotakis: Flight schedules in much of Europe are returning to normal today after being closed for almost a week because of Iceland’s volcano. Now airlines may have to pay, and that’s left some budget carriers a little worried. From London, Marketplace’s Stephen Beard reports.


Stephen Beard: Under E.U. law, all carriers have to pay the full cost of accommodation and food for their stranded passengers. That will hit the low-budget airlines hardest. They’ll be picking up a tab that dwarfs the ticket price.

Michael O’leary, the combative boss of low-cost Ryanair, at first refused to pay up. He’s now backed down and agreed to comply with the law. But he’s complaining bitterly about it:

MICHAEL O’LEARY: We’re definitely calling for the suspension of these ludicrous passenger compensation rules which entitle passengers, even those paying 20 and 30 euro air fares, to seek reimbursement for their hotel expenses from airlines which could run to many hundreds of euros. It’s just not fair.

Especially, he says, since the long delays were beyond the airlines’ control. European carriers say the compensation rules represent a massive competitive disadvantage. U.S. airlines only have to pay similar costs when they’re at fault.

In London, this is Stephen Beard for Marketplace.

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