Canceled or delayed flight: The business of compensation hunters starts again

Strike at Ryanair, Lufthansa, Transavia… In the European skies, the summer was marked by cascading flight cancellations. If these disruptions have spoiled departures or return journeys for many holidaymakers, they have made some happy: The passenger compensation specialists see the files flowing at the end of the summer and offer them a long-awaited breath of fresh air.

At least a dozen companies share the market in Europe. They help victims of flight cancellations or delays to obtain the compensation set out in European regulations: from 250 to 600 euros depending on the distance of the flight. For this they charge a commission in case of success (and only in this case): generally around 30% of the amount, a percentage raised to 45 or even 50% if the case goes to court. This highly lucrative form of consumer defense thrives on a double deficiency: that of the airlines reluctant to pay these compensations, and that of the consumers who are unaware of their rights… or prefer to avoid the paperwork to claim them self!

These online platforms flirt with disgruntled passengers with social media ads and Google keyword shopping. They can boast of their in-depth knowledge of the rules. To hope to receive compensation, the flight must have been canceled less than fifteen days in advance or delayed for more than three hours, all for a reason attributable to the company.

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At Air Indemnité, an SME based in Boulogne-Billancourt (Hauts-de-Seine), activity is intense at the moment, confirms Jérémy Rozenberg, Development Director: “Summer always represents a peak for us: applications increase from mid-June, peaking between late August and mid-September.” For its part, Flightright, a platform born in Germany, claims to have received almost twice as many cases regarding flight departures from Paris-Charles de Gaulle between June and August 2022 than in the same period in 2019.

The pandemic has seriously shaken the platforms

Meanwhile, Covid had brought these platforms to a standstill or nearly so. The absence of air traffic, or the very sharp reduction, deprived them of new passengers to accompany in their strife. And for ongoing cases, with airlines on the brink and overcrowded courts, resolution times have skyrocketed. What accentuates the pressure on this activity usually already demanding in cash: these companies receive nothing as long as the company has not paid the compensation.

The shock was therefore serious. Air Help, the market leader in 30 countries, employed 800 people before the crisis. He has 300 left. “We haven’t received massive public subsidies unlike the airlines,” squeals Tomasz Pawliszyn, CEO of Air Help. The French Air Indemnité has also reduced its airframe (from 40 to 20 employees). Six months before the first incarceration, he had raised four million euros to finance his European expansion. Naturally, the project was put on hold with the pandemic. “It should be finished in the coming months,” says Jérémy Rozenberg. Even the UFC-Que Choisir association, which had launched its own service in 2014 (it was managed, as a subcontractor, by Air Indemnité, according to our information), quietly ended it in January 2021. The consumer association believed that processing times were too long.

Increase or limit compensation?

Today, when their activity hardly starts again, a new threat looms: a reform of the European Regulation 2004/261, which provides compensation to passengers. “It is not clear enough for both passengers and companies”, we point out at Airlines for Europe (A4E), the airline’s lobby in Brussels. In recent weeks, he has renewed pressure to limit these costly services: “We hope that the Czech Presidency of the Council of the European Union will restart discussions in the autumn.”

Airlines for Europe (A4E) wants to see the concept of “extraordinary circumstances”, which allows companies to escape compensation, but is not defined by European rules. The companies also point to the fixed compensation amount, which is not commensurate with the price of low-cost tickets. And thanks in passing the compensation hunters: “These agencies are very little regulated. They are above all third parties seeking to benefit from the compensation process of European Regulation 261.”

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In the camp opposite, we show our confidence in the maintenance of the rules that protect passengers… and their business! “Limiting consumer rights at a time when companies are raising ticket prices and offering lower quality of service is a lot for the European Commission to accept,” said Tomasz Pawliszyn at Air Help. The platforms sharpen their own arguments. In unison, they call for an increase in the compensation amount based on inflation. Their amount, set more than fifteen years ago, has not changed since.

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