As expected, the European Court of Justice followed last September's opinion of the advocate general and upheld the European Commission's regulation concerning common rules on compensation and assistance to passengers in the event of denied boarding, long delay or flight cancellation.The regulation came into force on Feb. 17, 2005, and provides for compensation of 250 ($302.73) for denied boarding on flights of under 1,500 km., 400 for flights of between 1,500 and 3,500 km. and 600 for flights of more than 3,500 km. Meals, hotel rooms and other compensation are required for certain delays.

IATA and the European Low Fares Airline Assn. had challenged the regulations in the UK High Court, which referred the case to the ECJ in Luxembourg. That court concluded they "are compatible with the Montreal Convention 1 and do not infringe the principle of proportionality."

IATA condemned what it called "an absurd ruling" and DG and CEO Giovanni Bisignani said, "It is a sad day for Europe, for consumers, for international law and for the airline industry." The association estimates that total cost to the industry could top 600 million per year.

ELFAA Secretary General Jan Skeels reacted with similar disappointment, saying the ruling "does nothing for consumers and seriously undermines the competitiveness of the European air transport industry."

ELFAA, which includes easyJet, Ryanair, Wizzair and Hapag-Lloyd Express, had argued the rules were unfair to budget carriers because compensation levels often are much higher than fares. But the ECJ was unmoved, ruling the "damage suffered" by customers subject to cancellation or delay "is similar whatever the airline with which they have a contract and is unrelated to the pricing policies operated by the airline." The Court insisted that the amount of compensation "does not appear excessive" and dismissed the claim of discrimination between air transport and other transport sectors, citing inconvenient airport locations and the hassle of checking baggage, among other factors.

No appeal is possible, but ELFAA said challenges in national courts are likely. The regulations will be reviewed next year, at which time the organization said it will push for legislation absolving airlines for events over which they have no control and placing some of the compensation burden on ATC providers. The rules initially were intended to dissuade carriers from intentionally overbooking flights.