IATA unhappy with EU’s regulatory changes surrounding passenger compensation

IATA said that passengers do not want to trade one free piece of hand luggage for higher fares.

Photo: IATA

The International Air Transport Association (IATA) has issued a statement that it opposes the proposed reforms by the European Parliament (EP), which would make the passenger rights, colloquially known as ‘EU261,’ even worse in the eyes of the association.

In a statement on November 18, IATA stated that the EP’s proposed changes to the bloc’s passenger rights regulations will only “entrench and worsen its flaws, which have ensured ever-rising costs to consumers and airlines, while failing to tackle the main concerns of passengers.”

While the association pointed out that in June, European governments had attempted to change EU261 regulations in a way “that would safeguard connectivity and preserve the competitiveness” of Europe, the EP threw a spanner in the works.

“The [EP] is seeking not just to eliminate these threshold improvements, but add numerous additional measures, such as the ability to bring a cabin bag for free,” it said, adding that evidence showed that passengers would not favor these changes, and they are unwilling to pay higher fares as a result.

Willie Walsh, the Director General (DG) of IATA, added that there is “no such thing as a free lunch,” like there is no such thing as a ‘free’ bag or ‘free’ compensation thresholds. The EP’s proposed changes would act as a ‘reverse Robin Hood,’ Walsh continued.

“They are imposing things people have not asked for, and do not want to pay for unless they choose to. Given the choice, passengers would prefer to pay for a less gold-plated compensation scheme in exchange for lower fares.”

Walsh concluded that members of the EP (MEPs) “are meddling in business and operational issues they do not understand,” with IATA adding that the need for action has become even more urgent since “European air connectivity growth has slowed in some of the most important markets.”

The association proposed two changes, namely removing passenger taxes, which “damage connectivity,” something that some governments, like in Sweden and Germany, have recognized, and making changes to the EU’s ReFuelEU rules.

According to IATA, the recent Sustainable Transport Investment Plan (STIP) was “a step in the right direction.”

The European Commission (EC) unveiled the plan on November 5, which is a roadmap “to rapidly accelerate the energy transition of aviation and waterborne transport sectors.” According to the EC, to meet its own ReFuelEU Aviation and FuelEU Maritim Regulations fuel targets, around 20 million tonnes of sustainable alternative fuels (SAF) will be needed by 2035, which calls for an estimated €100 billion ($115.9 billion) investment to drive production.

As such, STIP ensures “regulatory stability,” and “sends a clear signal to investors that its targets are stable, and that it will support the sector throughout the transition.” Under the plan, the EU should mobilize at least €2.9 billion ($3.3 billion) by 2027 to remove investment barriers, support the production of hydrogen, research and innovation (R&I) projects, and synthetic aviation fuel and maritime fuel projects.

Nevertheless, IATA’s ire with the EU stemmed from the fact that on October 13, the EU Transport and Tourism Committee (TRAN) published the committee’s members’ “red lines for air passenger rights changes.”

TRAN’s statement read that the committee’s MEPs “stand firmly behind the current rules and want to maintain air travellers’ rights to be reimbursed or re-routed, and to claim compensation” during flight disruptions.

MEPs disagreed with the European Council’s push to increase the delay deadline from four to six hours, keep the three-hour flight delay deadline regardless of the flight’s distance, and that the distance would only matter for the total claimable compensation, which ranges from €300 ($347.95) to €600 ($695.89).

“The MEPs support the introduction of a common form for compensation and reimbursement requests,” and want to either come up with a pre-filled form or automatic communication channels that would activate within 48 hours following disruptions.

TRAN’s members also proposed that exceptions that would exempt airlines from paying compensation include “natural disasters, war, weather conditions, or unforeseen labour disputes (excluding strikes by airline staff).”

Their negotiation position also included the right to carry a free personal item and a small hand luggage on board an aircraft for free, and the end to check-in fees, which includes, for example, passengers paying to change a spelling error in their name.

Negotiations have been going on with the Danish Council presidency since October 15, and negotiators have three months to reach a deal. A one-month extension is possible, TRAN noted.

According to the EP, January 19, 2026, should be the indicative plenary sitting and the second reading of the proposed rules date.