Major airlines across Europe and Australia are pushing back against compensation laws for flight delays. Qantas and Airlines for Europe (A4E) argue that these regulations have not reduced delays and could lead to higher ticket prices for passengers.

Airlines Challenge EU261 Regulations

Under EU261, passengers can claim compensation if their flight is delayed by more than three hours, canceled within 14 days of departure, or overbooked. However, airlines like Lufthansa, Air France-KLM, and Norwegian—represented by A4E—say these rules are impractical. They propose limiting compensation to delays exceeding five hours.

A4E recently met with European Commission officials in Brussels to push for revisions, arguing that the existing rules are costly and ineffective.

Qantas Raises Concerns in Australia

In Australia, Qantas CEO Markus Svensson has voiced similar concerns. He told a parliamentary hearing on passenger rights that mandatory delay compensation would increase fares rather than improve airline performance.

“The cost gets passed on to consumers, which is not a good outcome,” Svensson said. He also warned that such schemes create a “side industry of ambulance chasers,” referring to legal firms that profit from compensation claims.

IATA and Airlines Warn of Higher Costs

The International Air Transport Association (IATA) has also opposed pay-for-delay rules worldwide. In December 2024, IATA criticised a proposed US compensation bill, stating that similar regulations in Europe and Canada had failed to reduce delays while adding $5 billion in annual costs for airlines.

Airlines argue that instead of improving reliability, these costs ultimately lead to higher ticket prices and reduced route availability.

Would Compensation Schemes Improve Passenger Rights?

While airlines oppose the policy, consumer advocates support compensation rules, saying they hold airlines accountable. A study cited by the Australian Lawyers Alliance found that EU261 reduced airline-induced delays and only slightly increased ticket prices—an impact some view as a fair trade-off for stronger passenger rights.

In Australia, the Coalition opposition party continues to push for a version of EU261 through its “Pay-on-Delay” bill. The debate remains heated, with both sides weighing the balance between passenger protection and airline costs.

Would a revised compensation scheme restore customer trust, or would it simply push up ticket prices? The answer may shape the future of air travel worldwide.