Arnecke Sibeth Dabelstein
ARNECKE SIBETH DABELSTEIN is an independent law firm with 40 partners and more than 150 attorneys at six locations (Frankfurt, Munich, Hamburg, Berlin, Leer and Dresden). It ranks among the top legal service providers in Germany.Show more
In May 2018 the Aviation Working Group announced plans for a global aircraft trading system (GATS) to modernise the selling, buying and financing of leased aircraft and engines by making such transactions simpler and faster. The GATS will be fully electronic and use e-signatures, e-delivery of documents and a secure e-ledger to record transactions. As such, it is expected to reduce the time and costs required to change German aircraft registrations through the national aviation authority.
If a third-country aircraft owner terminates the lease of a German airline but wants to keep the aircraft registered in Germany, it must enter into a new lease or similar agreement with an entity from an EU member state for at least six months. This article discusses why aircraft lessors and owners should carefully consider the requirements for keeping an aircraft in the German aircraft registry, particularly if its lease has been terminated.
The Federal Supreme Court recently ruled that the complete failure of an airport computer system may be considered an extraordinary circumstance. The court affirmed that airport system failures caused by technical defects which affect or suspend the functioning of technical equipment over a prolonged period are an external event affecting air carrier flight operations. Further, the monitoring, maintenance and repair of an airport's technical facilities lie outside the responsibility and competence of air carriers.
The Federal Court of Justice recently held that a strike is considered an extraordinary circumstance pursuant to the EU Flight Delay Compensation Regulation only if its consequences cannot be averted by reasonable measures and make flight cancellation legally and actually necessary. This decision emphasises that determining whether airlines can avoid liability due to extraordinary circumstances must be assessed on a case-by-case basis.
The Hamburg Local Court recently dismissed a passenger's claim for damages based on denied boarding after the delay of a previous flight which had been operated by a code-share partner. The court was of the opinion that a code-share partner is not liable for every further disruption along the course of transportation. Rather, the right to claim damages requires an adequate causal link between the delay and the further disruption.
Following Bavaria's state elections in October 2018, the legally binding plans to build a third runway at Munich Airport incurred significant delays. The state authorities recently agreed that the project will be suspended for five years, despite the fact that demand for aviation services in Munich – and internationally – continues to rise. The decision is a further example of how Germany's aviation industry will face additional, severe obstacles and challenges over the coming years.
The European Parliament and Council recently revised and replaced the basic regulation on common rules in the field of civil aviation. The new basic regulation promises a number of significant changes to the German aviation landscape over the next five years. Among other revisions, the Federal Aviation Office could lose some of its control over certain tasks relating to air operator certification, oversight and enforcement.
The State Parliament of North Rhine-Westphalia recently decided to launch an airline passenger rights app. The new app is intended to promote consumer protection and help passengers to claim compensation easily via their mobile phones. It will be developed by the consumer advice centre and is expected to inform passengers of their rights, perform claim checks, offer suggestions on how and where to assert claims and actively support the process of claiming compensation.
The Hamburg Regional Court recently referred to the European Court of Justice (ECJ) the question of which air carrier is the operating air carrier within the meaning of EU Regulation 261/2004 where the flight is operated under a wet lease agreement. The ECJ confirmed that air carriers which lease aircraft and crew to other air carriers under a wet lease agreement but bear no operational responsibility for the flights are not covered by the concept of 'operating air carrier' within the meaning of the regulation.
The Federal Court of Justice recently denied a claim for compensation regarding costs relating to the duty of German airlines to carry sky marshals, who are entrusted with the security of certain flights based on specific security considerations and by decree of the federal police. While the court's argument was legally stringent, it lacked sustainable reasoning as to why airline cost and security obligations should be more important than those of other transport means or sectors.
A new European Council regulation provides basic rules for civil aviation security across EU member states. Such clarification is welcome news for Germany, where previously only fragmented rules and regulations on lighter unmanned aircraft and drones existed. However, as the EU regulation fails to address every issue relating to drone safety, Germany's existing drone regulation will continue to apply where no new rules are implemented or where Germany remains the competent authority.
The Second Chamber of the First Senate of the Federal Constitutional Court recently rejected three constitutional complaints for adjudication against the Federal Administrative Court's decision concerning night flight regulations affecting Berlin Schoenefeld Airport. In its decisions, the Federal Constitutional Court appropriately weighed the legal interests of affected property owners with those of the general public.
Germany recently implemented the EU Package Travel Directive by updating its travel legislation in the Civil Code. The new law provides that anyone offering at least two travel services is considered a 'package organiser'. The new regime applies to traditional tour operators and air carriers, which may be regarded as package organisers if they offer travel services in addition to flights. Air carriers should review their travel offers to avoid any unexpected obligations and liability.
Although aircraft repossession is used only as a last resort, it remains unfortunately inevitable in some cases. Under German law, there are no self-help rights available to owners in order to take possession of an aircraft. It is possible to obtain interim injunctions or arrest orders before the German courts; however, those require a substantial amount of time to prepare court documents, as the entitlement to the claim must be shown to be prima facie.
A recent European Court of Justice decision presents a major change of case law in Germany with regard to the applicability of EU Regulation 261/2004 to connecting flights departing from an airport situated outside an EU member state. The decision has countered the longstanding position of the Federal Court of Justice, which held that the applicability of the regulation to each flight should be examined separately, even if the flights were operated by the same airline and were booked together.
In its latest decision, the Federal Court of Justice has reiterated that passengers are responsible for their own schedules and must allow sufficient time for airport security checks. The decision may lead to more flexible case-by-case judgments and suggests that airports, airlines and the state are not solely responsible for losses incurred from delays at airport security, but that every passenger has their own obligations and responsibilities.
The Munich Regional Court recently addressed the promotion of error fares by an online portal for cheap flights, hotels and travel packages in Germany. The promotions, which had encouraged customers to book error fares for flights published accidentally by airlines, were deemed unlawful due to a deliberate obstruction of competition in contravention of the Act Against Unfair Competition. The court's decision is appropriate considering the high number of consumers reached by online portals.
The Federal Court of Justice recently clarified the liability of airlines with respect to passenger rights and information obligations when a flight is operated under a wet lease. EU Regulation 261/2004 defines an 'operating air carrier' as an air carrier that performs or intends to perform a flight under a contract with a passenger or on behalf of another person having a contract with that passenger. The Federal Court of Justice held that in case of a wet lease, the lessee must be regarded as the operating air carrier.
The Federal Supreme Court recently issued a decision regarding the right to a refund of the ticket price following the cancellation of non-refundable tariffs. The decision highlights that a passenger can waive his or her right to cancel a ticket so long as that passenger makes an informed decision. This secures an air carrier's flexibility in offering a wide range of different ticket prices and ensures lively competition.
In Germany, a carrier is, in general, value added tax (VAT) liable along the domestic part of the flight route. However, it is possible for the carrier to apply for VAT remission according to the VAT Act. If the carrier is a German entity, the remission applies without further requirements other than an invoice without VAT. In contrast, if the carrier is a foreign entity, the tax relief must be mutual (ie, the state of the registered office of the foreign carrier must grant tax relief to German carriers as well).
The State of Hesse has decided to implement the use of drones. For this purpose, the police acquired four drones to help with their work in the region starting in February 2018. In order to operate the drones, each of the eight future drone pilots must complete a two-week workshop containing theoretical and practical modules. The drones will be used at accident sites and crime scenes in particular.
The Federal Constitutional Court recently rejected four constitutional complaints for adjudication against a decision concerning Berlin-Schoenefeld Airport. Following a deviation from the airport's originally envisaged flight routes, the plaintiffs had sought an annulment of the original plan approval order. The court held that the difference between the planning procedures for the airport expansion and the determination of the flight routes raised no constitutional concerns.
A recent Erding Local Court case called into question the distance that must be taken into consideration when calculating compensation according to Article 7(1) of EU Regulation 261/2004. The court interpreted Article 7 in line with settled case law and held that only the disrupted flights that had affected the overall delay of the passenger should be included in the calculation of the distance. Therefore, where a reservation consists of several flights, these are to be considered separately.
In a recent case, the Cologne Regional Court ruled that if the flight in question was delayed due to a Eurocontrol rescheduling of its airway slot, passengers had no right to compensation pursuant to EU Regulation 261/2004, irrespective of whether the rescheduling was based on reasons which, when considered individually, would result in extraordinary circumstances.
A recent non-binding referendum asked Berlin citizens whether they should demand that the Senate give up its closure intentions and take all measures necessary to ensure the indefinite operation of Berlin Tegel Airport. The vote indicates that approximately 56% of Berliners voted 'yes' and support keeping Tegel open. Local politics must now find a way to deal with Berlin's wish to maintain two airports.
The Dusseldorf Local Court recently decided that passengers do not have a right to compensation if, according to the meaning of Articles 7(2) and 8 of EU Regulation 261/2004, an alternative flight is cancelled. The court argued that the regulation differentiates between a 'flight' as subject of the transportation contract and an 'alternative flight' as a measure of assistance. Consequently, the cancellation or delay of an alternative flight gives no right to compensation.
The Berlin Regional Court recently upheld the application of a private German association for the advancement of consumer rights, which claimed that a German air carrier's online booking system had violated EU Regulation 1008/2008. Following the dismissal of the appeal brought by the carrier before the Berlin Upper Regional Court, the airline lodged a remedy of review before the Federal Court of Justice, which stayed the proceedings and referred the case to the European Court of Justice for a preliminary ruling.
Parliament recently passed an act incorporating the EU Payment Services Directive into German law. In line with the development of cashless currency being among the most frequently used payment methods, the act was passed to facilitate the use of electronic payment methods. To achieve a level playing field for all market participants, the act will also have a considerable impact on the aviation industry. Nowadays, online bookings via credit card are airlines' daily business.
The International Air Transportation Association (IATA) Dangerous Goods Regulations – the only standard recognised by airlines – contain the globally applicable provisions for shipping dangerous goods by air. A violation of the regulations might lead to criminal proceedings and infringements are a notifiable fact to be reported to the competent authority. In order to assist shippers in understanding the complete requirements, IATA has prepared the Lithium Battery Shipping Guidelines.
According to the amended Air Traffic Act, drones are recognised as aircraft. However, only unmanned aerial systems (UAS) that are not used for hobby or recreational purposes qualify as aircraft. Authorisation to fly will be granted if operation of the UAS does not present a risk to air safety or order and if rules on data protection and privacy are not violated. The main prerequisite for obtaining a flight permit is the coverage of the respective risks by liability insurance.
The plaintiff in a recent case claimed reimbursement from Munich Airport, claiming that it had caused him to miss his flight due to a slow security check. The Erding Local Court held that airport staff must proactively open further lanes in security and urge passengers who are in danger of missing their flights to move along the queue. However, the court also noted that the plaintiff should have left the queue and drawn attention to the approaching boarding time as soon as he risked missing his flight.
The use of drones, whether for private or commercial use, is a rapidly developing trend. The use of unmanned airspace causes potential risks, but other legally critical aspects relating to privacy, security and the environment must also be considered. The government recently introduced a draft regulation to create sufficient regulations to deal with these risks by amending the existing fragmented provisions and establishing rules to liberalise the commercial use of drones.
As of February 1 2017 companies and entrepreneurs, including air carriers, must comply with new information duties with regard to alternative dispute resolution (ADR). While ADR participation is voluntary, a peculiarity applies for air carriers. According to the Air Traffic Act, airlines are obliged to participate in ADR. If an air carrier does not voluntarily join the private conciliation body, it must participate in the government ADR process.
The European Court of Justice (ECJ) recently decided on the interpretation of EU Regulation 261/2004 and the calculation of a reimbursement owed to a passenger who was downgraded on a flight from first class to business class. The ECJ decided that the regulation must be interpreted as meaning that where a passenger is downgraded on a flight, the price for determining reimbursement is the price of the flight on which the passenger was downgraded.
The Berlin Regional Court recently decided a case in which the plaintiff claimed compensation for damages that were said to have occurred during air transport. The plaintiff had filed a legal action at his home court in Hamburg, but the matter was referred to a Frankfurt court because Frankfurt Airport was involved. However, the Frankfurt court was also not competent to hear the case. The Berlin Regional Court received the case after the expiration of the two-year limitation period under the Montreal Convention.
The Frankfurt Local Court recently decided that an airline may restrict the validity of ticket vouchers given as a goodwill gesture. Following a delayed arrival, the defendant offered the plaintiff a free round-trip ticket voucher valid for one year. The plaintiff was unable make use of the voucher within the year, so requested that it be extended. The defendant refused. As the voucher's time limit was part of the agreement, the plaintiff was unable to claim damages from lack of use.
According to a recent Frankfurt Local Court decision, a property irregularity report filed in the case of delayed baggage does not suffice as a timely notice of complaint, as set out in the Montreal Convention. The court ruled that a property irregularity report informs the airline only about missing baggage, and not about the expected claim for damages.
The Federal Labour Court recently confirmed earlier judgments denying compensation to a third party as a consequence of a strike. Through this latest decision, the court has strengthened its jurisdiction by denying compensation to third parties affected by unlawful strikes. In addition, the court has clarified that a strike becomes unlawful in total even if only a part of its goals violate the industrial peace obligation.
A number of projects and applications for drone use in transportation and delivery are underway, including by Deutsche Post DHL, which recently completed a three-month test period using a parcelcopter for business-to-customer and customer-to-customer parcel delivery. Plans are also underway to create specialised ground-based drones, and survey results have shown that approximately 13% of customers have a specific interest in drone delivery.
Air carriers that grant free or discounted flights to employees provide a monetary benefit that is subject to wage tax. The tax basis for these staff flights is the usual final price reduced by the regular discount granted at the place of issue. The supreme tax authorities recently issued new averages for air mileage for 2016 to 2018. The averages apply if no restrictions exist in the reservation status.
The Frankfurt Local Court recently decided that a passenger's claim for compensation pursuant to EU Regulation 261/2004 requires an accepted reservation by the airline. Passengers have no right to compensation if the airline has not accepted the reservation and the travel agency has issued incorrect booking confirmation. The burden of proof regarding the airline's booking acceptance rests with the passenger.
Due to the fast-growing number of drone operations, the minister of transport recently announced the revision of the rules governing the use of civil drones in Germany. According to the minister, such use is not sufficiently regulated. The envisaged rules aim to reduce hazards in the airspace and on the ground, while new legislation is being drafted for commercial and private drone use.
The Landshut Regional Court recently dealt with the issue of calculating distance relevant to the amount of compensation pursuant to EU Regulation 261/2004. The court ruled that the decisive factor in determining compensation is the immediate distance between the point of departure of the delayed flight and the passenger's final destination. Possible flight routes to and from transit airports should not be considered.
The Federal Fiscal Court ruled on the taxation of pilots resident in Germany working for an Austrian carrier on board aircraft that are operated internationally. The court had to decide whether, and if so in what proportion, the salary of a pilot living in Germany must be taxed under the double taxation agreement between Austria and Germany based on either the exemption method or the imputation method.
Commercial passenger flights departing from German airports have been taxed since the implementation of the Air Traffic Tax Act in 2011. The tax is set according to the flight destination and the number of passengers transported. According to the legislature, the act is supposed to create incentives for environmentally friendly behaviour. The Federal Fiscal Court recently confirmed that the tax is in line with the Constitution and EU law.
It has been widely debated whether an air carrier is legally allowed to claim full payment of the ticket price from a passenger as early as at the time of the flight booking. The Federal Court of Justice recently decided on three cases brought by a consumer association against two domestic carriers. It held that a pre-payment clause would not present an unreasonable disadvantage to the passenger and would not be contrary to the fundamental principles of law.
The Dusseldorf Regional Court recently ruled that if a flight is delayed due to severe weather conditions and a connecting flight is missed as a result, passengers have no right to compensation because the extraordinary circumstances defence applies. The court does not regard the frequency of severe weather conditions as a decisive factor with regard to extraordinary circumstances.
Berlin's new international airport is likely to face further delays due to the insolvency of Dutch engineering group Royal Imtech's German division and problems with the construction of the new roof, which led to an immediate halt in building. Even though construction has resumed, rumours remain that further postponement of the start date for airport operations in mid-2017 will be required due to ongoing difficulties.
The Federal Labour Court recently denied compensation to a third party as a consequence of a strike. The court dismissed a complaint from four airlines against a strike which had been initiated by the trade union due to cancelled, delayed or redirected flights. The court clarified that in the case of an unlawful strike against an employer, the trade union can be held liable for damages caused. Further developments are anticipated.
Germany has recently transposed the EU Energy Efficiency Directive into national law. Affected airlines must undergo an energy audit by December 5 2015. For airlines operating flights to and from Germany, fuel consumption must be taken into account. Airlines which fail to carry out or perform an energy audit (or which do not conduct it properly, completely or in time) may be fined up to €50,000.
The Minimum Wage Act lacks an answer to the question of whether it applies to foreign airline personnel who are not based in Germany. The wording suggests that crews are entitled to the German minimum wage when deboarding and boarding passengers, but the act does not apply in certain cases. The act remains open for interpretation and case law has yet to be established.
The Frankfurt Regional Court recently dismissed a claim on grounds of inadmissibility. The German plaintiff booked flights with a non-European airline with a local office in Frankfurt via the German-language pages of the airline's international website. The court clarified that the German version of an international website does not create the impression that a contract has been necessarily concluded with the local office.
The Hamburg Local Court has recently ruled on a case where passengers missed a connecting flight outside the European Union because the feeder flight from Germany to the airline's hub outside the European Union was delayed. The court stated that it makes no sense to treat cases in which a community carrier operates both flights differently from those in which the operating carrier for both flights is not a community carrier.
The Constitutional Court's first senate recently heard a case on the constitutionality of the Air Traffic Tax Act. The purpose of the air traffic tax is to generate €1 billion of revenue annually to create a steering effect towards more environmentally friendly behaviour in the aviation industry. The court admitted that the tax presents a financial burden to airlines. However, this is not enough to regard the act as unconstitutional.
The Federal Court of Justice recently deemed two clauses in the terms and conditions of a tour operator regarding flight time changes to be invalid. The court found the clauses to be unreasonable to the traveller. However, it did not determine what a valid clause would look like or what a reasonable timeframe for amendments to flight times would be.
In a recent case, the Federal Court argued that EU Regulation 1008/2008 does not specify an exact time when the final price of air services must be indicated when booking on a computerised booking system. The regulation aims to enable consumers to effectively compare prices of different air carriers. The provision is meant to guarantee information and transparency and strengthen consumer protection.
The Energy Tax Law provides that fuel supplied to commercial aircraft may be granted tax-exempt status. However, Germany is the only EU country in which exemption is not automatically granted to all commercial flights. Instead, customs permits are expressly required. Recent audits of EU air carriers have shown that airline accounts departments are often unaware of the need to apply for an exemption from the tax.
The Federal Court of Justice recently deemed two clauses in the general terms and conditions of a tour operator regarding flight time changes to be invalid. The defendant tour operator's terms and conditions stipulated that the determination of flight times rested with the tour operator issuing the travel documents. The court deemed the clauses invalid, as they put passengers at an unfair disadvantage.
The European Commission has issued new proposals in relation to the planned harmonisation of regulations governing flight duty hours and resting times. German pilots' union Cockpit believes that the decision will jeopardise safety in favour of monetary interests. Cockpit has protested against the adjustment of flying times and has indicated that it is considering taking legal action in this regard.
The Kassel Higher Administrative Court recently announced its ruling on claims filed by local government authorities and inhabitants of South and Rhine Hessen affected by the decision in favour of a southerly bypass. The court ruled that independent operation of the southerly bypass by means of a radio navigation system was not feasible and there was no evidence that it would become feasible in the foreseeable future.
The Federal Court of Justice has held that passengers of a delayed feeder flight which falls within the scope of Article 3 of EU Regulation 261/2004 are entitled to compensation if the delay causes them to miss their connecting flight and results in them reaching their final destination with a delay of three hours or more. This applies regardless of whether the connecting flight falls within the scope of the regulation or was delayed.
Pilots' union Cockpit recently lodged a petition with Parliament regarding the abolition of air traffic tax. The tax has led to significant distortion of competition, to the detriment of German airlines and airports. The petition has been successful, and as a result Parliament's Petition Committee may schedule a public debate on the petition.
The Landshut Regional Court recently ruled that each segment of a flight involving a scheduled stopover had to be regarded separately for the purposes of determining the applicability of EU Regulation 261/2004. The decision is important for third country (non-EU) air carriers which offer flights from EU countries via a hub outside the European Union to the rest of the world.
There has been a string of successful decisions in Germany regarding the requirement for delayed departure within the meaning of Article 6 of EU Regulation 261/2004 in order to seek compensation under the regulation further to the European Court of Justice (ECJ) decision in Sturgeon. A recent ECJ ruling in a case referred to it by the German Federal Court of Justice has thus come as something of a blow.
The Federal Court of Justice recently held that passengers were not entitled to compensation if the delay occurred on a connecting flight departing outside EU territory. The court stated that the meaning of the term 'flight' could not be determined by national air law, but was defined autonomously by EU Regulation 261/2004.
The federal state of Bavaria recently brought forward a motion aiming to abolish the Air Traffic Tax Act by Autumn 2013. The motion was approved by the Federal Council; as a result, the government has been requested to initiate a legislative procedure regarding the abolishment of the act.
According to a recent decision of the Cologne Regional Labour Court, a provision in a works agreement stating that male pilots were obliged to wear a uniform cap in the public areas of the airport premises was not deemed discriminatory under the General Act on Equal Treatment. The court left it unclear whether the relevant provisions were to be interpreted narrowly or broadly.
The Federal Finance Court has ruled that the mineral oil tax exemption may be granted to air carriers only. However, it did not address the potential overlap of the EU Energy Taxation Directive and the EU Emissions Trading Scheme. As the exemption from the scheme for commercial air carriers does not apply to non-commercial operators (ie, undertakings with corporate aircraft), such operators will be charged twice.
The Federal Court of Justice has ruled that if an airline's flight schedule cannot be operated in full or to a significant extent due to a strike, passengers have no right to compensation pursuant to EU Regulation 261/2004 because the 'extraordinary circumstances' defence applies. However, the airline must take reasonable measures to minimise the effects of a strike.
Attempts are frequently made to shift all responsibility in connection with transport arrangements onto the forwarder/carrier. Thanks to a recent Darmstadt Regional Court judgment, clarity has now been established: a consignor is not entitled to shirk these responsibilities or to assert claims against the air freight forwarder should import approval be denied.
The Federal Cabinet has adopted draft legislation on the introduction of conciliation bodies for airline passengers, with the aim of allowing passengers to make claims against airlines in a fast, cheap and straightforward manner. However, the plans would be yet another setback for the industry, particularly because airlines would have to bear the costs.
In an opinion requested by the Cologne Local Court and a UK court, the advocate general of the European Court of Justice (ECJ) has confirmed the ECJ's much-debated Sturgeon decision, which held that passengers whose flights are delayed, and who reach their final destination three hours or more after the arrival time originally scheduled by the air carrier, may rely on the right to compensation pursuant to EU Regulation 261/2004.
In response to an inquiry initiated by Alliance 90/The Green Party, the government has revealed the latest statistics on the number of administrative fine proceedings and penalty notices imposed by the Federal Aviation Office (LBA). In 2011 the LBA initiated more proceedings than ever before; particularly significant is the increase for German air carriers. The number of penalty notices has also increased drastically.
The Nürtingen local court recently confirmed that, in relation to claims for compensation brought pursuant to EU Regulation 261/2004, a delay can have the same legal consequences as a cancellation only in cases where delays occurred both on departure and on arrival.
The Federal Administrative Court has announced its long-awaited decision on the night curfew at Frankfurt International Airport. The court mainly affirmed the first instance ruling by prohibiting exceptions to the night curfew during the core night hours of 11:00pm to 5:00am. While the court's ruling ends the long-running conflict, the economic consequences for Frankfurt and the Rhine-Main region could be severe.
Three airlines have filed lawsuits against the German union of air traffic controllers for damages related to allegedly unlawful strike threats. Never before has such a lawsuit been filed in Germany, which is based on the argument that an illegal threat to strike has caused financial losses to third parties. A condemnation of the union would have a significant impact on future decisions of German unions to strike.
The forthcoming air traffic tax cuts represent a good opportunity to even out the playing field for German airports and passengers. However, in light of the imminent inclusion of aviation in the European Emissions Trading Scheme, the German legislature would be well advised to consider abandoning the tax all together.
According to a recent European Court of Justice, the provision in the standard collective agreement for German air carriers which requires that pilots be retired from working as crew members automatically when they reach the age of 60 constitutes undue age discrimination and violates the EU Equality Directive. The court therefore held that the relevant provision in the collective agreement was invalid.
In recent months many flights have been cancelled due to freezing temperatures and the fact that aircraft could not be de-iced by ground-handling operators because they had run out of de-icing fluid. This raises the question of whether carriers can claim compensation from ground-handling companies in order to cover the cost of expected compensatory claims from passengers, and for loss of profit.
A recent ruling by the Regional Court of Frankfurt confirmed that only the recipient of goods is entitled to file a complaint to the carrier. Under Article 31 of the Montreal Convention, a complaint filed by a shipper on behalf of the recipient is not considered sufficient as it removes the direct contact between carrier and recipient and leads to unnecessary delay in verifying the claim.
Parliament has passed the Accompanying Budget Act 2011, which not only comprises multi-faceted plans to cut public spending, but also introduces the Air Travel Tax Act. It is likely that several German carriers will challenge their tax assessments under the act, because the financial repercussions will be unacceptable.
The government has introduced its recently announced plans for an air travel tax. The new law, which is currently subject to the approval of Parliament and the Federal Council, will enter into force at the beginning of 2011. However, flights booked for that year are already taxable. The involvement of the courts in disputes arising from the new tax seems highly likely.
From 2011 airlines will be charged a levy of €13 per passenger for European travel and €26 per passenger for intercontinental travel. The plan has already proved controversial, as the new air travel tax will be imposed on airlines still struggling to return to profitability after the financial downturn and the losses from the Icelandic ash cloud. Moreover, the tax arguably violates Article 15 of the Chicago Convention.
The Berlin-Brandenburg Labour Court recently ruled that the Works Constitution Act did not give the flight crew of a German-based airline the directly enforceable right to elect its own works council. The court held that the crew would have been in such a position only if a collective bargaining agreement had been reached with a trade union explicitly providing for such a co-determination scheme.
The Darmstadt Regional Court has ruled on carriers' liability under the Montreal Convention. The court dealt with the question of whether a plaintiff is entitled to claim compensation for lawyers' fees and interest if the carrier offered compensation based on the convention after the incident but before the claimant had filed legal action.
To the dismay of the airline industry, the Supreme Court has confirmed a preliminary ruling of the European Court of Justice on the distinction between flight delays and cancellations. The courts also allowed the so-called 'extraordinary circumstances' defence – hitherto applicable only to cancelled flights – to be applied to delayed flights.
The Cologne Upper Regional Court has ruled that the trend among passengers of so-called 'non-sequential use of coupons' or 'cross-border selling' undermines airlines' tariff structures and is not permitted. It is hoped that the decision will establish a precedent for the Federal Supreme Court, which will likely be obliged to look into 'smart-ticketing' practices in the near future.
The Data Collection Ordinance 2020 has become effective. The Emissions Trading Authority has issued advice to aircraft operators on the new ordinance and its consequences. The ordinance forms the legal basis for the submission of emissions monitoring plans. Furthermore, the deadline for aircraft operators to submit their monitoring plans has been extended again.
The Federal Labour Court recently asked the European Court of Justice to rule on whether the stipulation of a fixed retirement age of 60 for pilots as one of the terms of a collective employment agreement constitutes a violation of the EU Employment Directive.
The Federal Court of Justice has ruled on the scope of application of the EU Denied Boarding Regulation regarding compensation to passengers in the event of a missed connecting flight. The decision distinguished between instances of denied boarding and cases where a passenger has arrived to check in for a flight after the gate has closed due to a previous delayed flight.
From 2012 aviation will be included in the EU Emissions Trading Scheme. Although this date may seem distant, carriers offering services to or within the European Union must act now. The German Emissions Trading Authority has requested that carriers involved submit documents detailing the procedures they plan to use to monitor emissions and gather tonne-kilometre data in August 2009.
The European Aviation Safety Agency has published a report entitled "The Scientific and Medical Evaluation of Flight-Time Limitations". Some stakeholders have reacted to the report with dismay: their criticism focuses on "a serious lack of substantive scientific and medical content" in the report and claims that the report "comes to conclusions which are oblivious to the evidence of decades of safe operation".
The European Commission recently opened investigation proceedings concerning the granting of aid to Flughafen Frankfurt-Hahn GmbH and low-cost carrier Ryanair. On January 17 2009 the European Commission’s invitation to submit comments pursuant to Article 88(2) of the EC Treaty was published, and interested parties have been invited to submit their comments within one month of this date.
Under Article 22, Section 3 of the Montreal Convention, in the event of the destruction, loss or damage of cargo or a delay in its delivery, the liability of the carrier is limited. In a recent case the Federal Court of Justice ruled on the amount the carrier is entitled to claim for compensation in the case of a lost shipment and specified the requirements for such claims.
The Federal Labour Court recently ruled that the outsourcing of a Polish carrier's handling services to a local airline company was not considered to result in a transfer of business pursuant to Section 613(a) of the German Civil Code, as the airline company performed these services using its own operating facilities.
The Federal Court of Justice has ruled on the question of whether a passenger who had booked a 14-day all-inclusive tour could, in the event of a delayed flight, claim compensation from the organizing tour operator under EU Regulation 261/2004. The decision strengthens the notion that the regulation is not applicable where national laws already provide sufficient protection to passengers.
After the Spanair crash in Madrid, the debate resumed as to whether passengers whose aircraft is stranded on the tarmac have the right to return to the gate once the doors have closed and the aircraft has pushed back. In this context the question arises as to whether the captain of an aircraft has legitimate powers to deny deboarding and, if so, how the limits of such powers can be determined.
Air passengers expect to be allowed to check in a reasonable amount of luggage free of charge, regardless of the price of their ticket. A German appeals court has confirmed that where a flight is advertised at a certain price "including taxes and fees", but an additional tariff will be levied for each item of hold baggage, the airline must refer to these additional costs in its advertisements.
The European Commission has opened investigations into state subsidies allegedly paid to Flughafen Frankfurt-Hahn GmbH and into agreements with the low-cost carrier Ryanair. The investigations focus on capital increases from 2002 and 2004 and a profit and loss transfer agreement between the airport and its parent company Fraport AG.
Shipping & Transport
How should the weight of a shipment containing damaged goods but usable pallets be calculated, considering that this would form the basis for liability? According to a recent Federal Court of Justice decision, if the pallets are still usable, only the net weight of the goods counts. The court held that it is necessary to look closely at what has been damaged, as the fate of some items is not necessarily the fate of others.
Daimler, MAN, Volvo/Renault, DAF, Iveco and Scania are facing billion-dollar damages claims from carriers for illegal price fixing. To date, more than 7,000 transport companies from 26 countries have filed over 300 claims in excess of €1 billion in the German courts. However, the spillover effects on the transport sector remain unclear. A recent Dortmund Regional Court decision provides much-needed clarity in this regard.
A hard Brexit would increase liability risk for EU carriers and freight forwarders, and disputing parties would need to overcome a number of factual and legal hurdles. Before undertaking cross-border transports, carriers are well advised to make clear agreements with senders in order to clarify that customs clearance delays are expected for an unforeseeable duration and request instructions from senders in accordance with the Convention on the Contract for the International Carriage of Goods by Road.
The German Freight Forwarders' Standard Terms and Conditions (ADSp) are a joint body of recommendations for shipping industry associations and freight forwarders. However, given that there are (at least) three versions – namely, ADSp 2003, ADSp 2016 and ADSp 2017 – many companies struggle to clearly identify the ADSp on which they should base their services.
A recent Bremen Regional Court decision serves as a stark reminder to carriers that all contractual obligations, particularly those relating to security instructions, must be fulfilled and that any carrier found to have breached these obligations could face unrestricted liability in the event of damages. Carriers should carefully assess the feasibility of implementing any listed safety instructions before accepting transport contracts.
The Koblenz Higher Regional Court recently confirmed that tour operators cannot be held liable by cruise passengers for gym injuries sustained during large swells. The decision re-emphasises the fact that ships shift constantly at sea and that all passengers should therefore take appropriate care while on board – particularly during large swells – as failure to do so may deny them the ability to claim damages if an accident occurs.
The Verden Regional Court recently sentenced a forwarder to pay full compensation plus interest calculated at nine percentage points above the basic lending rate under the Civil Code. Upholding the forwarder's appeal, the Celle Higher Regional Court held that the interest rate should be reduced to five percentage points above the basic lending rate, which is more in line with interest claims under the Convention on the Contract for the International Carriage of Goods by Road.
While settling claims out of court to avoid losing customers is becoming standard practice in the shipping and transport industry, such payments should not be made prematurely – particularly if the carrier's responsibility for the damage is unclear. In most cases, the opposing party interprets such goodwill payments as an acknowledgement of debt at a later stage in the proceedings. Therefore, carriers are advised to draw up a brief compensation declaration to avoid having to compensate twice.
In its capacity as a court for inland navigation, the Mannheim District Court recently settled a dispute between an inland waterway carrier and a sender. The sender had instructed the carrier on short notice and despite the express statement by the carrier that its vessel was not yet available. According to the court's interpretation of the transport contract, the flexibility agreed in respect of loading readiness was to be understood as an exemption of liability for late delivery.
The Federal Court of Justice recently clarified a number of issues under the Budapest Convention on the Contract for the Carriage of Goods by Inland Waterway – most importantly, the determination (calculation) of the limitation per weight of goods. According to the court, only the weight specified in the transport document can be invoked; if no weight is mentioned in the transport document, the carrier must rely on the limitation per package.
The German Freight Forwarders' Standard Terms and Conditions (ADSp) 2017 are designed to protect forwarders and close any potential liability risk gaps, particularly for organisations involved in air transport. In order to clarify the issue of whether the ADSp 2003 applied only to transport that was governed by German law, the updated ADSp stipulate that they do not apply to international transport.
The Munich Higher Regional Court recently confirmed that 'delivery' under the Commercial Code essentially means the procurement of direct possession. While the physical seizure of transported goods by a consignee is unnecessary, the goods must be made available to the consignee in such a way that it can, without further obstacles, seize control of the goods. The court also clarified how to classify the unloading of valuable goods in front of an unattended warehouse without an agreement or instructions.
The Berlin Administrative Court recently considered the action of an environmental association admissible but unfounded. The association had sought a declaration that introducing long trucks or 'gigaliners' to regular operation and extending the trial operation of certain extra-long trucks was illegal. While this judgment strengthens the road transport route, given that the operation of extra-long trucks is limited by the density of the cargo, the use of gigaliners might not affect competition with rail transport.
The Federal Court of Justice recently ruled on two risk exclusion clauses in transport insurance policies that are especially relevant for the export and import industries. While the decision has resolved some of the legal uncertainty surrounding transport insurance, it will likely apply to all types of insurance. As far as risk exclusion clauses are concerned, the court has made it clear that exclusion clauses should be interpreted restrictively.