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As of 1 January 2017, the Peoples’ Republic of China (the PRC) enacted the “Provisions on the Management of Flight Regularity" regulation (in Chinese: 航班正常管理规定) (the Regulation) with the intention of addressing passenger protection in the domestic aviation market.
Domestic and foreign airlines operating flights originating from the PRC or with an agreed stopping place in the PRC (the Regulated Airlines) are covered by the Regulation. The impact of the Regulation varies between different Regulated Airlines.
There are additional measures to address other stakeholders in the aviation industry such as airports and other service providers but for the purposes of this article, we focus on Regulated Airlines.
The Regulation focuses upon: (i) “delayed” flights defined as flights whose actual departure is later than fifteen (15) minutes after the scheduled departure time; and (ii) “cancelled” flights defined as scheduled flights which are not operated due to a delay or an anticipated delay.
The principle behind the Regulation is that Regulated Airlines should, in accordance with the applicable general conditions of carriage, provide greater passenger support than they have been offering previously. The level of passenger protection varies depending upon the reasons behind the delay or cancellation.
Where the cause of the delay or cancellation can be attributed to a Regulated Airline, that Regulated Airline is required to provide passengers with meals and/or accommodation at the airline’s cost. However, where cause of the delay or cancellation cannot be attributed to the Regulated Airline, for example, where it is caused by adverse weather, unforeseeable events or security concerns, the Regulated Airline only has to assist with arrangements for meals and/or accommodation with the costs borne by the relevant passenger.
In respect of domestic flights within the PRC, the Regulated Airline is required to provide passengers with meals and/or accommodation, irrespective of the cause and at the Regulated Airline’s cost, where:
In addition to the obligations set out above, the Regulation also requires a Regulated Airline to:
Any Regulated Airline which fails to meet the requirements or acts in breach of the Regulation may be given a warning and/or face a fine up to RMB100,000 (approximately US$15,000).
The Regulation does not: (i) provide clear rules on passenger compensation, specifying, for instance, any monetary awards; (ii) cover how a passenger would make a compensation claim; (iii) specify who determines whether an event that causes a delay or cancellation is attributable to the carrier; or (iv) clarify what constitutes a “domestic flight/carriage”.
Before 2017, several guides were published in China with regard to passenger compensation, including monetary awards for flight delays. The “Service and Compensation Standards of the Flight Carrier for Anomalies in Aviation Transportation Service Quality (Trial)” (in Chinese: 航空运输服务质量不正常航班承运人服务和补偿规范（试行）) (the Compensation Standards) published by China Aviation Transportation Association (CATA) in 2010 recommended a cash compensation of RMB200 (approximately US$30) or compensation in the form of a credit, discount or air miles to the value of RMB300 (approximately US$45) for flight delays between four (4) and eight (8) hours. Despite not being mandatory, the Compensation Standards have been adopted and applied widely by airlines in China. The four (4) hour threshold is criticized for being relatively high and, similarly, the suggested compensation is criticised for being low. The Civil Aviation Administration of China (CAAC) has refrained from creating regulation on passenger compensation, deciding to leave the decision with airlines.
The new Regulation is the first in this area and this is likely to be just the start. Following its introduction, a series of new administrative rules were enacted covering implementation. The “Working Procedures for Confirming the Reason for a Flight Delay or Cancellation” (in Chinese: 航班延误取消原因确认工作程序) enacted on 1 January 2017 provides that the Operation Monitor Centre of the CAAC will be the authority for verifying the reasons for delays or cancellations of flights within PRC. Also, an official website and a hotline were both launched by the CAAC for the public to use to establish the reasons for flight delays and cancellations. The new “Methods of Managing Consumer Complaints for Public Aviation Transportation Service” (in Chinese: 公共航空运输服务消费者投诉管理办法) enacted on 1 January 2017 provides that the CAAC, the Consumer Centre of the CAAC and the CATA will oversee and consider all claims raised by passengers against the Regulated Airlines and their agents for ground service, sales and the airport management agencies.
While the PRC still appears to be some distance away from the passenger protection measures found in Europe and North America, the Regulation clearly illustrates a desire by the authorities in the PRC for carriers to offer better service to their passengers and compensation if they cannot. For international airlines, the requirements of the Regulation will come as little surprise and are likely to follow similar practices already adopted. However, the Regulation is likely to signal a change in approach from PRC-based Regulated Airlines as they adapt to the measures required. It remains to be seen how future legislation will develop to build upon the Regulation but it is a clear indication of the PRC’s desire to improve passenger protection.
Regarding passenger protection measures in Europe, this Legalflyer edition also includes a review of a recent bird strike case which has helped to provide guidance on when a flight delay can be considered to be the result of extraordinary circumstances.
Implications for cryptocurrency trading, smart contracts and AI
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