The Court of Justice of the European Union (CJEU) has delivered a definitive ruling requiring airlines to refund the total amount paid by passengers for cancelled flights — expressly including hidden booking fees charged by online travel agencies, Flight Delayed reported. The judgment stems from a legal dispute between KLM Royal Dutch Airlines (KLM) and passengers who purchased tickets through an intermediary and were denied a full refund of booking commissions after their flights were cancelled.
In affirming that airlines bear responsibility for reimbursing the entire ticket price regardless of whether intermediary fees were directly collected by the airline, the CJEU ruled that passengers are entitled to a complete refund of their paid funds — including service or commission charges levied by third-party online travel agencies — where flights are cancelled.
Cancellation, Partial Refund, and Legal Escalation
In early 2020, two passengers booked a return itinerary through Opodo, a commercial travel platform originally established by a consortium of airlines including KLM, which is one of the airlines whose extra legroom seats have heavily increased. After a flight from Vienna to Lima was cancelled due to COVID-19 travel restrictions, the passengers sought a full refund of the €2,053 they had paid. KLM processed a partial refund of €1,958 but excluded the €95 booking fee charged by the intermediary.
KLM’s defence was that it had no knowledge of, nor control over, the amount of commission charged by Opodo. Austrian consumer authorities and judicial bodies rejected this defence, asserting that an airline cannot plausibly disclaim awareness of commercial practices by an authorized agent. The dispute ultimately reached the CJEU for interpretation.
EU Law and Airline Refund Obligations
According to Airlines for Europe, Under Regulation (EC) No 261/2004, airlines remain responsible for ensuring that passengers are properly informed, even when schedule changes or cancellations are notified well in advance—typically two weeks or more before departure—if intermediaries fail to relay that information to customers in a timely manner. In such cases, airlines may still be compelled to provide compensation, a framework that many carriers argue creates an inequitable allocation of liability.
Airlines for Europe (A4E) has also warned that carriers could face the risk of paying refunds twice when tickets are booked through intermediaries. If an airline transfers the refund to a travel agent or other intermediary within the required timeframe but the intermediary fails to pass the money to the passenger, the traveller may still approach the airline directly for reimbursement.
A4E highlighted an example in which one of its member airlines transferred a substantial amount of refund money to a travel agent that reportedly took six months to pay customers before eventually entering bankruptcy proceedings. The association argues that airlines should not be financially responsible for intermediaries that fail to pass on refunds after receiving the money.
Cancellation Obligations and Legal Uncertainties under EU Regulation 261/2004, as highlghted by the same publication include the following:
| Area | Provision under EU261 | Identified problem | Policy concern raised |
|---|---|---|---|
| Passenger notification | Airlines are responsible for informing passengers of cancellations and schedule changes, even when notice is given two weeks or more before departure. | If intermediaries fail to pass on information, airlines remain liable. | Airlines bear responsibility without control over intermediary communication. |
| Compensation liability | Airlines may be required to pay compensation if passengers are not informed on time. | Liability applies even when airlines acted in good faith and within timelines. | Creates an imbalance between legal responsibility and operational control. |
| Extraordinary circumstances | The regulation does not clearly define “extraordinary circumstances.” | Courts, rather than legislators, have expanded the scope through case law. | Legal uncertainty and inconsistent application across jurisdictions. |
| Legal certainty | EU261 relies heavily on judicial interpretation. | Different national rulings create complexity and compliance burdens. | Need for legislative clarification rather than continued jurisprudential expansion. |
| Service quality reporting (cancellations) | Airlines may be required to publish cancellation statistics and reasons. | Data may be misleading due to route-specific and external factors. | Risk of misinterpretation by consumers and enforcement bodies. |
All in All
The CJEU’s ruling in Case C-45/24 has important implications for EU air passenger rights, particularly when flights are booked through online travel agencies. The court clarified that, when a passenger’s flight is cancelled, the airline’s reimbursement obligation can extend to amounts paid as part of the ticket purchase even when those amounts were retained by an intermediary, depending on how the booking charge was structured.
The ruling could therefore affect how airlines, online travel agencies and other intermediaries handle cancellations and refunds. Airlines4Europe (A4E) had previously raised concerns about the division of responsibilities between carriers and intermediaries, particularly where airlines issue refunds to agents but passengers subsequently seek payment directly from the carrier.
The main issues identified by A4E included:
| Area | Issue identified by A4E | Potential impact on airlines | A4E’s proposed approach |
|---|---|---|---|
| Passenger contact details | Intermediaries may use their own contact information when making bookings. | Airlines may be unable to contact passengers directly about cancellations or re-routing. | Require intermediaries to provide passenger contact details to airlines. |
| Refund execution | Airlines may transfer refunds to intermediaries within the required timeframe. | An intermediary could delay or fail to pass the refund to the passenger, potentially exposing the airline to a second claim. | Introduce enforcement measures and sanctions for intermediaries that fail to transfer refunds. |
| Refund liability | Passengers may approach airlines when an intermediary has not passed on a refund. | Airlines could face uncertainty over whether they remain liable after paying the intermediary. | Establish clearer limits on airline liability once the carrier has complied with its refund obligation. |
| Intermediary fees | Travel agencies may add commissions, mark-ups or service charges to bookings. | Airlines could face claims for amounts they did not receive. | Clarify how intermediary fees are treated when calculating an airline’s reimbursement obligation. |
| Unauthorised ticket sales | Some intermediaries may sell tickets without an airline’s direct approval. | Airlines may have limited visibility over bookings while still facing passenger-rights obligations. | Require greater disclosure of the intermediary’s commercial relationship with the airline. |
| Enforcement | National enforcement bodies primarily oversee airlines. | Intermediaries may face less direct regulatory scrutiny. | Extend appropriate enforcement mechanisms to intermediaries. |
.jpg){kind=link}
