The European Court of Justice (ECJ) in Luxembourg has prepared a groundbreaking ruling in a legal dispute between Austrian Airlines and the Austrian state. In her final submissions published on Thursday, Advocate General Juliane Kokott ruled that the airline's claim for state liability for financial losses caused by technical problems with air traffic control was unfounded.
This legal assessment, which the Court frequently follows in its rulings, represents a rejection of the possibility for airlines to use European regulations as a basis for claims for damages against state-controlled air traffic control services. The case, which stems from an incident in August 2016, has far-reaching implications for the entire aviation industry. It highlights that the financial risks of delays and cancellations continue to lie primarily with the airlines.
The origin of the legal dispute: A passenger traffic jam at Vienna Airport
The case, which has now been brought before the European Court of Justice, began in August 2016 at Vienna-Schwechat Airport. Due to technical problems within the area of responsibility of Austro Control, Austria's state-run air traffic control, there were massive delays in the handling and acceptance of flights. The result was a significant backlog of passengers and aircraft. Austrian Airlines was also severely affected by these problems. The airline was forced to cancel 60 flights, resulting in considerable financial losses.
Austrian Airlines subsequently demanded compensation from the Austrian government, the owner of Austro Control. The claim included costs for refunds of airline tickets, rebookings on other airlines, accommodation and meals for passengers, and their transport. However, the Austrian government denied liability. It argued that the legal provisions governing air traffic control, both at the European and national levels, do not serve to protect the purely financial interests of airlines. The relevant EU regulations are purely administrative provisions whose primary purpose is to ensure safe air traffic.
European regulations without compensation function
The key question that the Austrian Supreme Court referred to the ECJ for clarification was whether the European and national rules governing the functioning of the air transport system protect an air carrier and whether the carrier is entitled to compensation for financial losses suffered in the event of a breach of duty by a state-controlled air navigation service provider.
Advocate General Kokott reached a clear conclusion in her opinion. She emphasized that the relevant EU regulations, including the Air Navigation Services Regulation and the Framework Regulation for the creation of a Single European Sky, are not designed to protect third parties – in this case, airlines. They primarily serve the safety and administrative coordination of airspace. For this reason, they alone cannot serve as a basis for a state liability claim by airlines.
Advocate General Kokott's opinion is an important legal pointer. It suggests that airlines cannot expect to use European regulations as a legal weapon against state air traffic control services in similar cases. This strengthens the position of national states and their air traffic control providers vis-à-vis the airlines.
The role of national courts and laws
Although the Advocate General rejected an action based on EU law, she pointed out that a claim for damages could at best be based on national provisions. National courts are obliged to interpret these national provisions in accordance with the EU principle of effectiveness. This means that a claim for damages only exists if Austrian law provides for such claims in the event of negligence by air traffic control.
The legal debate sheds light on the complex interface between European and national law in a highly regulated sector such as aviation. While the European Union sets the regulatory framework for airspace, liability for damage resulting from its operation remains primarily the responsibility of national legal systems.
Since the Advocate General's Opinions are in most cases adopted by the ECJ in its final judgments, it is likely that Austrian Airlines will lose the case. This would force airlines to pursue their claims for damages in similar cases exclusively at the national level in the future. It underscores the need for airlines to implement their own risk management measures to protect themselves against losses due to operational disruptions. The case therefore has not only legal but also strategic significance for the entire aviation industry.