The Aviation Law Review: Austria
Austria is a central European landlocked country with a population of around 8.8 million inhabitants, and it has been a member of the European Community, the predecessor of the European Union, since 1995. Following the enlargement of the European Union in 2004 and 2007, Austria is now situated in the centre of the Union and constitutes the link to its neighbouring countries in the east. Germany is its most important trading partner by far; there are close economic, legal and social connections, not least because of the common language. However, it must be considered that there are substantial differences in their judicial practice, especially regarding the jurisdiction in aviation law, despite the partial applicability of European law.
Domestic passenger and goods transport forms only a minor part of the aviation sector; nevertheless, it is of particular significance owing to its close connection to Austria's neighbouring countries and other countries of the European Union. Furthermore, Vienna International Airport (VIE) serves as an important hub to the Middle East. Austria has six commercial airports with steadily increasing traffic figures, which are located in Vienna, Salzburg, Innsbruck, Graz, Linz and Klagenfurt. The largest and most important airport by far is the VIE, with 31,7 million passengers and 283,806 tonnes of cargo volume (air cargo and trucking) in 2019. It is situated 16km south-east of Vienna and can be reached in 16 minutes by the City Airport Train, which was put into service in 2003. In addition, the Slovakian capital Bratislava is only 49km away and can be reached easily by public transport. Finally, according to various statistics, VIE has one of the best punctuality records of airports in Europe, and is part of the leading group worldwide.2
The largest airline in Austria is Austrian Airlines (AUA), which has a fleet of 84 aircraft. It is a member of Star Alliance and a subsidiary of the German Lufthansa Group. The Austrian Aviation Act (LFG)3 is the central statutory provision at national level. Numerous other statutes and ordinances supplement this legal regime. In addition, Austria is a signatory to all principal international agreements in the aviation sector, such as the Chicago Convention (ratified on 26 September 1948), the Tokyo Convention (ratified on 8 May 1974) and the Montreal Convention (ratified on 28 June 2004). Austria is not party to the Rome Convention, the Geneva Convention or the Cape Town Convention. All European legal provisions are applicable because Austria is a member of the European Union, and the primacy of application of EU law is guaranteed. However, directives, in contrast to regulations, must be implemented by national law and, therefore, are not self-executing.
Legal framework for liability
In terms of liability in the aviation sector, international agreements and European provisions assume considerable importance in practice because of the primacy of application of these provisions and their extensive harmonisation of the applicable law. Nonetheless, decisive differences in the jurisdiction of the contracting states are common. The reasons for this are, on the one hand, the different interpretation of the law, and on the other, specific procedural provisions. In addition, national statutes such as the LFG and the Aviation Security Act4 also provide (additional) liability and penal provisions. Furthermore, the general damages provisions of the Austrian Civil Code (ABGB) are subsidiarily applicable. Other important laws regulating aviation matters are the Airport Charges Act, the Act on Airport Ground Handling, the Federal Act on International Air Services (BGzLV) and the Air Transport Levy Act. In addition, there are several national regulations such as the Civil Aviation Personnel Licensing Regulation, the Rules of the Air (LVR) and the Air Operator Certificate Regulation (AOCV).
The supreme civil aviation authority in Austria is the Ministry for Transport, Innovation and Technology. The competent authority for operational, technical and licensing matters is the Austro Control GmbH, a state-owned entity.
i International carriage
As mentioned above, Austria is party to numerous bilateral and multilateral agreements regarding the aviation sector. In terms of liability, the Montreal Convention is of significant importance. It only applies to international transport, which is why the national liability provisions remain applicable, albeit their legal scope is severely restricted. The national Austrian provisions simulate or refer to those of the Montreal Convention (see subsection ii). In compliance with the limits of liability, the obligation to register complaints in a timely manner and other restrictions, the Montreal Convention provides liability in respect of damage to passengers and baggage. It replaced the Warsaw Convention, which is only applicable if one of the disputing parties has not ratified the Montreal Convention. In addition, Regulation (EC) No. 2027/97 is applicable, which integrates the Montreal Convention into European law and provides partially supplementary provisions. Austria is also party to the Chicago and Tokyo Conventions. In the event of delays, denied boarding and cancellation, Regulation (EC) No. 261/2004 lays down claims for liquidated damages.
ii Internal and other non-convention carriage
The provisions on liability and its extent in Chapter 10 LFG largely resemble those of the Montreal Convention. For example, the owner's liability for damaged baggage and cargo or in the event of death or injury of the passenger or third parties caused by an accident is regulated in Article 148 ff LFG. When there are several owners of an aircraft, all of them have joint liability, but the limits of Article 151 LFG, which are staggered in accordance to the maximum takeoff mass, still apply. Also in accordance with the Montreal Convention, the liability of the carrier is limited to 1,131 special drawing rights in the event of damaged baggage. Furthermore, the general damages provisions of the Civil Code are subsidiarily applicable. Several provisions of the ABGB were explicitly integrated into the LFG. For example, Article 161 LFG regarding the liability for contributory negligence refers to Article 1304 ABGB. However, in accordance with the reservation contained in Article 146/1 LFG, the LFG is only applicable where neither European nor international law can be applied.
iii General aviation regulation
Gratuitous carriage of passengers or goods not performed by a licensed carrier is not subject to the liability provisions of the Montreal Convention or European law. However, the provisions of the LFG on liability, as shown in subsection ii, are applied in these cases because they establish liability of the owner regardless of whether the carriage was gratuitous or performed by a licensed carrier.
iv Passenger rights
European law mainly regulates passenger rights in Austria. In particular, the Montreal Convention and Regulation (EC) No. 261/2004 on Passenger Rights are of decisive importance. This Regulation under certain circumstances entitles the passenger to claim compensation in the event of cancellation or delays. In these procedures, special attention must be paid to the local jurisdiction. In numerous cases, the plaintiff refers to the consumer jurisdiction of Article 17 ff of Regulation (EU) No. 1215/2012 but, according to Article 17/3 of Regulation (EU) No. 1215/2012, it does not apply to transport contracts other than package travel contracts. Concerning claims for compensation the place of jurisdiction is usually not determined by the consumer's residence because the carrier is usually only obliged to transport services. In accordance with the Package Travel Directive, Austrian courts have explicitly found that a flight might not be qualified as package travel, even when it takes place during night hours and includes catering.5 Because of the stated reasons, the place of jurisdiction is usually the place of performance of the obligation in question, provided the carrier does not have an establishment that is registered in the Austrian commercial register. Therefore, the legal venue for all these disputes is the court of the district where the airport of arrival or department is situated. Those provisions on international jurisdiction result in the consequence that almost all claims that are based on the Regulation on Passenger Rights are concentrated in only a few courts. The competent court of first instance for the VIE is the District Court of Schwechat if the value of dispute does not exceed €15,000. This centralisation offers the advantage that the deciding judges are highly experienced in passenger rights. The Austrian courts have developed clear judicial practices for most legal questions.
For instance, the courts pay particular attention to the measures that could reasonably be required. This tendency results from one of the few rulings of the Supreme Court (court of last instance) about the Passenger Rights Regulation.6 Article 5/3 of Regulation (EC) No. 261/2004 explicitly provides that the obligation to prove that all reasonable measures have been taken refers solely to the extraordinary circumstances that caused the cancellation. Thus, the operating air carrier must only take the reasonable measures that are appropriate to avoid those extraordinary circumstances. The German Federal Court of Justice, for instance, has followed this approach.7 Nevertheless, in Austria this question of law is answered to the contrary and to the disadvantage of the air carrier. The carrier must prove that all reasonable measures had been taken to minimise delays as much as possible. Hence, proof of all reasonable measures taken is also required when there is no possibility of influencing the extraordinary circumstances, for example, in the event of closures of the airspace. In these cases, carriers must offer reasonable re-routing or substitute transportation, or prove why this was not reasonable or possible in the particular case.
Article 7/2 of Regulation (EC) No. 261/2004 provides the reduction of compensation by 50 per cent when a delay does not exceed a distance-related time limit. The District Court of Schwechat – in whose jurisdiction the VIE is situated, as mentioned above – ruled that this reduction does not apply eo ipso, but must be claimed explicitly by the carrier.8 This means that the initially claimed full sum may adversely affect process costs. For this reason, carriers and their legal representatives should examine the potential reduction under Article 7/2 of the Passenger Rights Regulation in any case. The submission to the court should then include a reference to the 50 per cent reduction and its applicability. This ensures that the court will apply this principle even if the claim is granted.
Provided the proof of extraordinary circumstances succeeds and probable cause shows that the delay or cancellation could not have been avoided, even if all reasonable measures had been taken, the claim for compensation principally will be denied. In particular, the proof of regulatory airspace restrictions and capacity limitations usually lead to a relief of liability. Furthermore, several procedural particularities should be noted. Unlike in other European countries, oral proceedings are held in each case. Both the plaintiff and the defendant must attend the hearing and submit all decision-supporting information by the end of the oral procedures before the court of first instance to avoid adverse procedural consequences. Supplements at a later stage are only allowed in specific cases and only to a limited extent. In practice, a credible and conclusive witness testimony is hugely significant. Written statements of witnesses, however, are not allowed. Usually, the amount in dispute based on Regulation (EC) No. 261/2004 is comparatively small, which means that an appeal against the ruling of the first instance is strictly limited and the focus should be on the proceedings at first instance.
Article 5 of the Passenger Rights Regulation not only provides that there is no compensation in the event of extraordinary circumstances, but also if information has been given in a timely manner and there has been an offer to reroute. The relevant time frames are regulated in Article 5/1(c) of Regulation (EC) No. 261/2004. In Austria and Germany, the operating carrier is solely accountable for informing the passengers on time. The information of a travel agency or the contracting carrier only justifies a relief of liability when the information was transmitted to the passengers within the statutory time frames. In general, the affected passengers should be informed by the operating carrier directly to avoid defaults.
Another significant ruling of the Supreme Court dealt with the sequential use of flight coupons by a passenger.9 The legal dispute at hand was based on the circumstance that carriers sometimes offer a flight connection that consists of several flight stages for a cheaper price than the individual flights. The general terms and conditions of carriage of the defending carrier contained a clause that provided an obligation of the consumer to pay an extra charge if he or she only uses one of the flight stages and the flight itself would have been more expensive than the booked flight travel. The Supreme Court considered that such clauses are only valid where the consumer originally intended to use only one of the several flights of a combined offer and, therefore, consciously tried to circumvent the tariff system. Clauses that also burden consumers who initially wanted to use the actual combined offer, but decided otherwise later – for example, because of delay of a feeder flight or a change in the itinerary – are grossly discriminatory and, therefore, void.
In this context, clauses of general terms and conditions of carriage are void in accordance with Article 879/3 ABGB when they grossly discriminate against one party. The Supreme Court has clarified the standards by which the clauses are measured in numerous rulings.10 This jurisdiction was developed by an actual decision of the Commercial Court of Vienna, which dealt with the legitimacy of certain clauses in the general terms and conditions of carriage. In summary, the Court has ruled that clauses in conditions of carriage that allow the refund of taxes and fees in the event of cancellation only upon the payment of a fee are inadmissible. Another particularity of the Austrian legal system is the frequent claims for damages as a result of loss of holiday enjoyment. Loss of holiday enjoyment constitutes non-material damage, which means that no direct pecuniary damage occurs in the sphere of the aggrieved party. According to Austrian tort law, compensation for non-material damage may only be granted in explicitly statutory exceptions. With regard to the loss of holiday enjoyment, Article 12/2 of the Package Travel Act (PRG) explicitly entitles compensation in cases where the non-conformity with the contract is considerable. The PRG entered into force on 1 July 2018 and replaced Articles 31b-31f of the Consumer Protection Act (KSchG). Similarly to the PRG, the KSchG stipulates in Article 31e/3 that loss of holiday enjoyment is to be compensated. According to the legal provisions (and partly court decisions), this entitlement may only be applicable to package tours that were organised by a travel agency. Therefore, air carriers are not liable for loss of holiday enjoyment according to Article 31/3 KSchG11 or Article 12/2 PRG.12
The provisions of the KSchG are applicable to contracts concluded before 1 July 2018.
v Other legislation
In general, there are no competition law or environmental law provisions that are specifically applicable to corporations in the aviation sector. Both the Austrian Competition Act and the provisions on economic crime comply with the European prerequisites. The Act on Airport Ground Handling, which regulates the market, is also relevant. Potential ground-handling services must fulfil a variety of requirements and complete an extensive detailed statutory selection procedure. The number of ground-handling services per airport is restricted to two in each of the essential areas, such as baggage handling, ramp handling, mail and freight-handling services. Regarding the noise emissions of the airport, the Protection Against Environmental Noise Act applies. The statutory provisions are regularly specified by binding national regulations such as the Regulation on Civil Airports and the Civil Aircraft and Aeronautical Equipment Regulation.
Licensing of operations
i Licensed activities
The LFG stipulates that all carriers require a licence. The Act defines an air carrier as any undertaking transporting passengers or goods by aircraft for commercial purposes and explicitly refers to Regulation (EC) No. 2407/92 on licensing of air carriers and Regulation (EC) No. 1008/2008 on common rules for the operation of air services in the European Community. For example, a licence is also required for commercial circular flights. If an equivalent licence of another Member State of the European Union is available, a separate licence application must not be submitted. In general, there are two kinds of licensing procedure. For passenger, mail or freight transport by a sailplane, free balloon or an ultralight aeroplane, an application for a licence according to Article 104 ff LFG must be submitted to the Austrian Ministry for Transport, Innovation and Technology.13 In all other cases of commercial services in the aviation sector, an application for a licence according to Regulation (EC) No. 1008/2008 must be submitted to the Ministry for Transport, Innovation and Technology.14 Austro Control GmbH is responsible for issuing the air operator certificate (AOC), and thereby implementing the Ordinance on Air Operator Certificate 2008. Austro Control GmbH is a public, commercial enterprise that performs sovereign tasks and is subject to instruction from the Minister for Transport, Innovation and Technology.
ii Ownership rules
The legal framework on ownership is largely orientated to Regulation (EC) No. 1008/2008. In addition, Article 16 LFG states that the Austro Control GmbH keeps an aircraft register. Further implementations are provided by the Civil Aircraft and Aeronautical Equipment Regulation. However, the register only records the operator; the ownership is irrelevant in this context.
iii Foreign carriers
The AOC of a Member State of the European Union also entitles the operation of aircraft on Austrian territory. Numerous bilateral agreements have been concluded with third countries resulting in the recognition of their AOCs. The Act on International Air Services (BGzLV) provides the requirements under which operation and overfly rights are granted to air carriers from third countries.
In Austria, safety requirements are usually standardised by legal instruments of the European Union. However, in addition to numerous references to European provisions, the LFG also
contains regulations on the implementation and organisation of security measures. The aim is to prevent offences against the safety of civil aircraft. Special safety measures are directly stated in the LFG.
In addition, Article 136 LFG sets out the obligation to report accidents and incidents to Austro Control GmbH. In this way, accidents and incidents are to be recorded and investigated in order to increase safety in air traffic. The following persons are obliged to report such incidents:
- operators of civil aircraft;
- civil aerodrome operators;
- organs of the public security service;
- responsible pilots;
- persons who develop, manufacture, maintain or modify civil aircraft or their equipment construction or components;
- persons who sign a re-examination certificate or a release certificate for a civil aircraft or its equipment, construction or components;
- persons entrusted with the performance of the duties of the air traffic service;
- persons performing a function related to the installation, modification, maintenance, repair, overhaul, flight inspection or control of air traffic; and
- persons performing aerodrome operations on an aerodrome, including refuelling, services, preparation of mass and gravity, and loading, de-icing and towing of aircraft.
Austro Control GmbH is obliged to forward notifications received without delay to the Federal Security Investigation Offices. Incidents that did not result in an accident are still subject to the reporting obligation. The Civil Aviation Notification Regulation determines the notifiable events and specifies the reporting procedures. Other reporting requirements, such as the Civil Aircraft and Aeronautical Equipment Regulation and the AOCV, may also be subject to reporting requirements. These shall remain unaffected by the obligation to report as stated in the LFG.
In the area of insurance law, European standards are of central importance. In principle, the insurance level is based on Regulation (EC) No. 785/2004. The LFG provides specific provisions, and insurance amounts for airlines, which are not subject to the Regulation. These vary depending on the aircraft operated. Austro Control GmbH is the competent authority in insurance matters. The insurer or the insured party must immediately notify terminations or interruptions of the insurance to the authority. An insurance certificate must be issued by the insurer and must be carried in the aircraft.
Competition law regulates competition between air carriers. Austrian national competition law is mainly set out in the Act Against Unfair Competition and the Competition Act. In addition to the national legal framework, European competition law is applicable – Regulations (EC) Nos. 1/2003 and 139/2004 are relevant in this context. Regulation (EC) No. 411/2004 relates specifically to the aviation sector and extends the applicability of European competition law to air transport between the European Union and third countries.
The applicable competition rules are applied by the regular national and European competition authorities. In Austria, the independent Federal Competition Agency (BWB) is the competent authority. Besides enforcement of the competition provisions, this authority is also responsible for merger control. In addition to the BWB, there is the federal antitrust prosecutor who is directly controlled by the Federal Minister of Justice.
The Competition Act applies to all types of merger transactions. The respective relevant markets are the flight routes. To determine whether a transaction has an effect on competition, the relevant markets are compared.
In the context of competition and commercial law, the protection of intellectual property is also very important. In Austria, trademarks can be registered under the Trademark Act in the Trademark Register. However, there is also protection for unregistered marks and labels if the existence and use is proven. Patents can be registered in the Patent Register. The Patent Act and the Model Protection Act are applicable.
The provisions of the Montreal Convention standardise the provisions for the loss of physical integrity or the death of passengers. Damages claims are fulfilled if the conduct is attributable to the air carrier, the air carrier was unlawful and culpable, and was causally responsible for the death. Liability is independent from other claims under national regulations. Damages compensating for shock and grief in connection with the death of close relatives are generally only awarded if the impairment is causing a disease. Such damages are attributed by the Supreme Court only in the case of gross negligence on the part of the injuring party.15 However, damage to property occurring in the sphere of the surviving dependants must be compensated (e.g., funeral expenses and possible maintenance obligations).
Establishing liability and settlement
In the air transport sector, most policyholders and insurers prefer an extrajudicial resolution of disputes. According to the applicable legislation in Austria, there are no restrictions, and the involved have the freedom to choose a preferred dispute resolution.
Especially in cases of long-term contractual agreements, there will be a possibility to conclude an arbitration clause. Merely contract components or agreements that are the result of an imbalance of power or that violate statutory provisions or public morality rights for other reasons are not permitted.
Even though dispute settlement proceedings do not have the same importance in central Europe as in the Anglo-Saxon legal system, there have been some major improvements in this area in recent years.
In the entrepreneurial area especially, many actors recognise the benefits of an extrajudicial or even consensual dispute resolution. This increasing acceptance can also be seen in the private domain. In 2003, a legal framework for mediation procedures concerning civil claims was implemented through the Civil Law Mediation Act. These amenities are hardly regulated in the public sector.
The jurisdiction of the Austrian courts is determined by the value of the dispute. District courts are competent in the first instance for disputes with a value of up to €15,000. If the value exceeds this threshold, the regional courts, which otherwise act as an instance of appeal, decide in the first instance. However, judges are encouraged to support the parties in reaching an amicable solution.
The Agency for Passenger Rights (APF) was established for the extrajudicial enforcement of passenger rights. It is a conciliation and enforcement agency for rail, bus, air and ship traffic. Under Article 139a LFG, air carriers are obliged to participate in a conciliation procedure and provide all the necessary information documents for reviewing a situation. The deadlines laid down in the procedural guidelines of the APF must be adhered to. If a carrier fails to meet its obligations towards the arbitration body, administrative penalties are to be expected. However, the air carrier is not obliged, under any circumstances, to accept a solution proposed by the conciliation body. If conciliation cannot be reached in an APF conciliation procedure, the passenger is entitled to appeal.
ii Carriers' liability towards passengers and third parties
The liability of the air carrier is primarily regulated by the provisions of the Montreal Convention, which provide maximum liability limits. The air carrier is primarily held accountable. This does not mean, however, that the air carrier has to bear the damage definitively. The Montreal Convention does not affect a potential claim for recourse by the airline against third parties and is, in principle, governed by Austrian law. A recourse claim may be considered, for example, if the damage is caused by several persons who are liable in solidarity with the injured party. If the injured party only takes action against the airline, the airline has to pay the full amount, but may recover the corresponding shares of damages from the other injuring parties.
Special legal conditions exist for the recourse of the air carrier as an employer to its employees as direct victims. The Employee Liability Act provides compensation for damage inflicted by an employer to the employee or a third party in the performance of his or her work. Compared to the provisions of the ABGB, the liability of the employer for added damages is substantially restricted. In the case of excusable mistakes (the slightest degree of negligence), the liability of the employer is completely omitted. In other cases of negligence, the right of recourse may be reduced by the court according to the Employee Liability Act. However, if an employee is injured while performing his or her work, the employer is liable for the impairment of the employee's physical integrity only in the event of intent (employer's liability privilege).
When European or international law provisions are not applicable, the national liability rules apply. Liability against third parties is regulated in Article 148 ff LFG, whereby the maximum liability amounts of Article 151 LFG have to be observed. These provisions are broadly similar to those of the Montreal Convention. The injured party loses the claims declared under Article 148 if he or she fails to report the accident within three months of obtaining knowledge of the damage and the operator of the aircraft. The loss of rights does not occur if the complaint has been omitted owing to a circumstance for which the injured party is not responsible or if the operator of the aircraft became aware of the accident within the time limit in another way.
In addition, the general provisions of the ABGB are to be taken into consideration.
iii Product liability
The European Product Liability Directive16 was implemented in Austria by the Product Liability Act. It establishes that if a person is killed or injured as a result of the defect of a product, the manufacturer or importer is obliged to reimburse the damage. The manufacturer or importer is only liable for damages caused by defective products. A product must be qualified as faulty if it does not offer the security that a person is entitled to expect under all circumstances. The Product Liability Act establishes a fault-independent liability. In the case of material damage, liability is excluded provided the damage occurs in the property of an entrepreneur and concerns an item that has been used predominantly in the company. In addition, the liability provisions of the ABGB apply.
Damages claims can be made under national law. Immaterial damage can only be replaced if this is explicitly stipulated by law. For example, the compensation for pain is stated in Article 1325 ABGB. According to the prevailing jurisprudence, both physical and mental pain may be compensated, with higher demands being placed on compensation for mental damage. In practice, the pain is calculated on a daily basis, differentiating between mild, moderate and severe pain. For a day of light pain, approximately €100 will be awarded, though legal practice varies with different courts. For a day with severe pain, up to approximately €350 will be awarded depending on the jurisdiction. According to recent jurisprudence, more claims for damages are also increasingly attributed to psychological damage, such as damage caused by shock or grief. Liability for such damage exists only in cases of gross negligence or intent, according to the case law of the Supreme Court. In contrast, healing costs and losses of earnings are already compensable for slight negligence.
The Austrian law on compensation for damages is complex and includes numerous special provisions. For example, for contractual claims, a reversed burden proof is in place. According to Article 1298 ABGB, the injured party must prove that he or she did not act culpably. In the Consumer Protection Act, special provisions for the liability claims of consumers against companies are standardised.
As in many other countries, there has been a rapid increase in the use of unmanned aerial vehicles in Austria, and there have been repeated incidents involving drones in the vicinity of VIE. Even though collisions and other accidents have been avoided so far, the airport operator is considering installing a drone defence system. In this context, it should be noted that the operation of drones in the no-fly zones around airports is absolutely inadmissible and can lead to criminal consequences.
Apart from the aforementioned no-fly zones, drone flights up to a maximum flight altitude of 150 metres are generally permitted without special permission. The applicable provisions can be found in the fourth section of the LFG and the Aviation Regulation. The regulations regarding unmanned aerial vehicles entered into force with the amendment of the LFG in 2014 and corresponds to the intention of the legislature to create a specific legal framework for the increasing number of deployed drones and the associated risks. The LFG differentiates between certain classes of unmanned aerial vehicles whose approval criteria differ. The classification depends, on the one hand, on the area of operation and, on the other, on the operating mass of the aircraft.
There is no institution for voluntary reporting in Austria. However, air carriers and other persons and companies active in the aviation sector are legally obliged to report. Article 136 LFG provides a reporting obligation to Austro Control GmbH for accidents as well as for incidents that have not resulted in an accident. There are no special provisions for the protection of whistleblowers. See Section IV.
The year in review
The Austrian courts rendered a variety of significant decisions in the past year regarding the Passenger Rights Regulation. As the trend of recent years has already shown, the decisions of the courts can all be characterised as rather consumer-friendly.
Of practical importance is the new line of jurisprudence of the Supreme Court on jurisdiction in matters of air passenger rights, which has been confirmed by several judgments. For the sake of understanding, it should be noted in advance that the provisions of European law on jurisdiction do not apply to air carriers from third countries that do not have a registered office in the European Union. Subsidiary national rules of jurisdiction are therefore applicable in these cases, which only permit an action at the place of arrival or departure if this has been expressly agreed. Based on this legal situation, numerous lawsuits have been dismissed in recent years due to lack of jurisdiction of Austrian courts. However, according to Section 28 of the Jurisdiction Code, the Austrian Supreme Court has the possibility to determine an Austrian court as competent if this is necessary for the effective enforcement of the law. The Supreme Court has now decided that the principle of effective application of Union law always implies the obligation to designate a competent court if no other jurisdictional element is fulfilled and the claimants residing in Austria base their claim on Union law provisions.17
The Regional Court Korneuburg has issued a clarification of the examination steps regarding compensation claims in accordance with the Regulation on Air Passenger Rights, which is quite positive for legal practitioners.18 Accordingly, the following steps are to be adhered to regard to the reasonable measures in the event of delays or cancellations:
- measures to avoid the extraordinary circumstances themselves;
- measures to avoid a resulting cancellation (or a long delay); and
- measures to avoid the undesirable consequences of the cancellation (or long delay) for the individual passenger.
In addition, the ECJ has also made a number of clarifications that should be mentioned in this overview. With regard to a request for a preliminary ruling submitted by the Regional Court Korneuburg, the ECJ ruled that, in principle, there is no obligation to pay compensation in the event of a rerouting to an alternative airport located close to the scheduled final destination.19 Another preliminary ruling initiated by the Austrian courts led to the ECJ's ruling on the definition of the term accident in the Montreal Convention. In this context, the ECJ stated that a hard landing that complies with the technical guidelines is not to be regarded as an accident within the meaning of the Montreal Convention.20 Finally, the ECJ also clarified that intra-company strikes cannot constitute extraordinary circumstances within the meaning of the Regulation on Air Passenger Rights.21
In addition, due to numerous flight cancellations, the reimbursement of ticket costs was of central importance last year. The European Commission reacted fast and issued interpretative guidelines in March 2020,22 which are not legally binding but are nevertheless of great importance. The guidelines clarify that pandemic-related delays or cancellations are generally caused by extraordinary circumstances and therefore there is no entitlement to compensation. With regard to the reimbursement of ticket costs, it was once more emphasised that passengers have a right of choice. Vouchers therefore do not have to be accepted by passengers, but they can request a refund in the currency of the original payment.
The effects of the covid-19 pandemic hit the travel industry particularly hard. Airlines have been forced to ground almost all their planes due to a European travel ban, which is why governments have provided financial aid to state-owned airlines. This is particularly true for Austrian Airlines, which had 7,000 employees, 83 aircraft, 14.7 million passengers and an annual turnover of €2.2 billion before the covid-19 pandemic. However, on 19 March 2020, Austrian suspended its scheduled flights because of the covid-19 outbreak. Austria has therefore decided to convert some aircraft and use them temporarily as freighters. Flight operations have of course been resumed in the meantime, but VIE recorded a passenger decline of around 75 per cent for the year 2020. Due to this decline in the number of passengers, the planned construction of a third runway at VIE, which was described in detail in previous editions of The Aviation Law Review, has not been pursued any further for the time being, despite the legally binding permit. In this regard, the question could arise in the future as to what extent outdated permits can be renewed if the project is to be realised after a few years.
In the meantime, air traffic has adapted to the changed conditions so that regular flight operations are possible despite comprehensive hygiene concepts and additional legal requirements. Nevertheless, the desire to travel is still limited, and foreign tourists are currently hardly visiting Vienna or other parts of Austria given the extensive restrictions on public life.
Recent developments in particular give reason for hope. On the one hand, progress in vaccination is steadily advancing, and on the other, seasonal conditions are also contributing to a reduction in the number of infections. Vienna in particular can be considered a pioneer in the fight against the pandemic, providing free PCR testing to the entire population. In addition, numerous legal restrictions ceased to apply on 19 May 2021, and travel restrictions – especially to other EU countries – have been eased. Therefore, there is hope that the aviation sector will see a sustained recovery from summer 2021 onwards.
Not all airlines have yet relaunched their flights to Austria, and it is to be expected that this reduction in flights will create good chances for new companies to establish their services on the Austrian market.
1 Dieter Altenburger is a partner and Georg Schwarzmann is an associate at Jarolim Partner Rechtsanwälte GmbH.
2 OAG Punctuality League 2016.
3 Austrian Aviation Act of 2 December 1957 (LFG).
4 Austrian Civil Code of 2011.
5 District Court Salzburg 13 April 2017, 31 C 39/17a.
6 Supreme Court 17 December 2012, 4 Ob 164/12.
7 BGH 24 September 2013, XZR 129/12.
8 District Court Schwechat 1 March 2017, 4 C 744/16v.
9 Supreme Court 17 December 2012, 4 Ob 164/12i.
10 Supreme Court 13 April 1983, 1 Ob 581/83; 20 July 2016, 6 Ob 120/15p; 23 February 2017, 2 Ob 29/16b.
11 Supreme Court 10 October 2002, 6 Ob 11/02i.
12 There are no court decisions re Article 12/2 PRG to date.
13 Article 102/1 LFG.
14 Article 102/2 LFG.
15 Welser, Bürgerliches Recht, page 340.
16 Council Directive on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products (85/374/EEC).
17 Supreme Court 9 February 2021, 4 Nc 32/20y.
18 Regional Court Korneuburg 3 September 2020, 22 R 152/20p.
19 ECJ 22 April 2021, C-826/19, Austrian Airlines.
20 ECJ 12 May 2021, C-70/20, Altenrhein Luftfahrt GmbH.
21 ECJ 23 March 2021, C-28/20, SAS.
22 Interpretative Guidelines on EU passenger rights regulations in the context of the developing situation with Covid-19.