Ryanair to challenge law on compensation after ash losses

Reform: Michael O'Leary said the EU law was disproportionate
12 April 2012

Michael O'Leary refused to soften his stance on compensation for passengers whose flights were grounded by the volcanic ash cloud as he admitted it cost Ryanair more than £40 million.

The budget airline's chief executive said he was gearing up for a legal challenge against "unfair" EU regulations which forced carriers to cover the costs of refreshments and accommodation for passengers who could not get home.

Mr O'Leary said the firm planned to use the top 20 "most ludicrous" claims as part of a test case in the courts - he said one customer stranded in the Canary Isles, hoping to return to Dublin, put in a claim for 3,000 (£2,500) for a luxury apartment.

He said blamed the "incompetence" of the Met Office for the "mythical" cloud which has left his business with a bill of around 50 million (£42.3 million) so far.

"There was no ash cloud," he said today. "It was mythical. We've not been able to find it. It's become evident the airspace closure was completely unnecessary."

After initially refusing to compensate customers beyond a refund for their ticket, Mr O'Leary agreed to foot the bill, but he added that he was determined to challenge the EU 261 regulation so his airline would not suffer again.

He said: "The EU 261 regulations are absurd and completely disproportionate. We're happy to compensate when it is our screw-up, but when it's an act of God, we don't think the airlines should have to pay out.

"We suggest reform of the EU 261 must be introduced. I can live with the penalty of paying 50 million if we get this absurd regulation changed."

Mr O'Leary said Ryanair would have to present the case to a district court before forcing it through to the European courts within the next 12 months.

Ryanair has completed 90% of flight refunds and about 10% of reimbursement claims.

The Met Office has defended its forecasting against claims that the ash cloud did not exist. A Met Office spokesman said: "There was ash over the UK. Our forecasts are updated regularly and are based on a number of factors, including observations from space and inputs from our colleagues in Iceland."

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