CJEU Clarifies EU261: Airlines Liable for Refunding Hidden Booking Fees

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.

KLM Royal Dutch Airlines (KLM)

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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.

Key points of the CJEU ruling:

• Airlines must refund the entire amount paid by passengers for cancelled tickets, regardless of intermediary fees.

• An airline’s lack of knowledge regarding the amount of commission charged does not absolve it from refund responsibility.

• Excluding booking fees in refunds undermines the protective intent of passenger rights law and could discourage consumer use of travel intermediaries.

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.

In addition:

“airlines are facing a risk of double payment in cases where the airline transfers the refund to the intermediary in good time (within 7 days of the request), but the intermediary fails to pay the customer in a timely manner or at all. In an extreme example, one of A4E’s members transferred a large sum of refunds to a travel agent, which did not pay its customers for six months and eventually declared bankruptcy. In such cases, where reimbursement is delayed or missing, passengers may turn directly to the airline for a refund.”

Cancellation Obligations and Legal Uncertainties under EU Regulation 261/2004, as highlghted by the same publication include the following:

Similar Legal Precedents: Hidden Fees, Refunds, and Consumer Protection

Looking at aviation history, two cases of the recent times serve as precedents of sorts for the recent ruling by CJEU.

Air Canada ordered to pay CAD 10 million over hidden booking fees

In April 2025, Quebec Court of Appeal ordered Air Canada (AC) to pay CAD 10 million after finding that the airline used misleading price displays that failed to clearly disclose mandatory fees at the outset of the booking process. The court held that Air Canada breached Quebec’s Consumer Protection Act by advertising base fares that excluded unavoidable charges.

According to a report published in AeroTime, Judge Judith Harvie of the Quebec Court of Appeal stated that Air Canada had ” shown ignorance and laxity by assuming it was not subject to provincial law because it is federally regulated by the Canadian government“:

” Judge Harvie described the company’s actions as “serious, deliberate and affecting a large number of consumers,” adding that the airline had prioritized its own commercial interests over honesty. “An award of punitive damages is necessary to denounce this behavior,” she wrote in the ruling. “

Ryanair taken to court over misleading online booking practices

Ryanair (FR), the carrier that introduced paperless boarding, has faced legal action in Belgium over claims that its online booking process employed misleading consumer tactics, including artificial scarcity messages and pressure-based prompts.

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Consumer groups argued that statements such as “only a few seats left” and countdown timers distorted purchasing decisions and violated EU rules on unfair commercial practices. According to the Brussels Times,

” This practice – called ‘bait pricing’ or ‘drip pricing’ – is banned under EU Regulations on the operation of air services and Belgian law. However, Ryanair continues to display an initial price as “bait” for consumers, but optional fees are revealed as the booking progresses. This way, the company delays the disclosure of essential pricing information, distorts consumers’ price perceptions, and stops effective price comparison and competition between airlines. “

All in All

The CJEU’s ruling in Case C-45/24 sets a consequential precedent for air passenger rights in the EU, affirming that airlines are responsible for refunding all monies paid by passengers for cancelled flights — including hidden booking fees charged by online travel agents.

This is set to change the intermediary involvement, refunds, and airline liability in cancellation cases that was once highlighted by Airlines4Europe in the following way: