Airline industry warns EU261 reform could double costs and threaten airfare affordability

Joint Industry Position – October 2025

European airlines are sounding the alarm over what they describe as “gold-plated” reform plans for EU Regulation 261/2004 — the bloc’s air passenger rights law — warning that proposed changes by the European Parliament could more than double annual compensation costs from €8 billion to over €15 billion, pushing up ticket prices for all travellers.

Airlines argue that the Parliament’s proposals would undermine affordability — passengers’ top priority amid the ongoing cost-of-living crisis — and threaten the competitiveness of Europe’s aviation sector.

“The original intent of revising EU261 was to strike a fair balance between passenger protection and airlines’ ability to offer affordable, reliable connectivity. The current proposals do the opposite,” the industry statement says.

Key Industry Concerns

• Rising Costs: Per-passenger EU261 costs could rise from €5 to €10 per flight segment, burdening airlines already facing higher environmental and operating expenses.

• Administrative Red Tape: EU261 already costs airlines about €1.5 billion annually in administrative overheads. New automated compensation and claim form requirements would “only increase bureaucracy and confusion.”

• Operational Strain: Proposals limiting airlines’ flexibility in rerouting, pricing, and baggage policies could “cripple operational efficiency and consumer choice.”

• Competitiveness Threat: Compared to EU rail passengers, who receive around €300–500 million annually in compensation, airlines face a “grossly disproportionate” regime.

Industry Priorities for a Balanced EU261

1. Facilitating Journey Recovery

   • Raise delay thresholds to allow flights to operate “better late than not at all” — recommending 5-hour and 9-hour limits instead of the Parliament’s 3-hour rule.

   • Define a clear, non-exhaustive list of “extraordinary circumstances” (e.g. severe weather, air traffic control strikes) to reduce legal ambiguity and prevent excessive compensation claims.

   • Maintain airlines’ ability to manage rerouting on their own networks, opposing rules forcing carriers to rebook passengers on rival airlines or alternative transport modes.

2. Ensuring Affordability

   • Protect pricing freedoms, including the right to charge for optional services like cabin baggage, meals, and seat selection.

   • Oppose proposals for mandatory free large cabin bags and “no-show” rule changes that could undermine low-fare models.

3. Reducing Red Tape

   • Simplify claim procedures rather than automate them, ensuring compensation remains claim-based rather than automatic.

   • Avoid measures that could trigger “the next 20 years of CJEU cases,” noting more than 80 court rulings have already been issued on EU261 disputes.

Focus on What Passengers Really Want

Citing multiple surveys, airlines stress that passengers’ main priorities are:

• Clear, timely information during disruptions

• Care and assistance appropriate to the delay

• Reaching their destination as soon as possible

Compensation, they note, “does not feature among the top passenger priorities” and is effectively “a redistribution mechanism” paid for by all travellers.

Conclusion

The aviation sector urges EU policymakers to recalibrate EU261 reforms around affordability, legal clarity, and operational realism — warning that excessive regulation risks eroding Europe’s Single Aviation Market success story.

“Good intentions do not guarantee good outcomes,” the statement concludes. “Unless rebalanced, EU261 reform could make flying in Europe less affordable and less connected — hurting consumers, economies, and competitiveness alike.”