BA flying into hefty bill for new EU law on compensation

BRITISH Airways is facing a "substantial" bill for "badly drafted" European Union (EU) regulations coming into force this week, which demand that airlines compensate passengers for flight delays and cancellations. From 17 February, passengers all over Europe will be able to demand compensation of up to E600 ($768, £414) if a flight of more than 3,500km is cancelled or overbooked, no matter what the reason. Plans for the new rules were first revealed by The Business three years ago. The International Air Transport Association (IATA) has estimated its members are facing a yearly bill of E1.5bn in compensation payouts. Regional carriers could be knocked sideways by the requirement that they pay out for journeys that started on other continents. BA director of government and industry affairs Andrew Cahn said: "A good piece of legislation has been turned into a bad piece by bad drafting. Cancellations affect airlines all the time because of factors outside their control such as weather and air traffic control. The cost to the airline will be substantial." Cahn says fully implementing the regulations will be a challenge but will obey the law. The Department for Transport has told airlines they must comply. BA is hoping the EU will change its mind on the controversial rules but carriers may have to wait until the autumn, when legal challenges will be heard by the European Court of Justice.