Varano v Air Canada

Under Regulation 261, connecting flights booked as a single journey are treated as one unit when assessing delay at the final destination. This applies where the journey starts in the EU, even if the delay occurs on a later flight outside the EU operated by a non-Community carrier.

The carrier incurs a contingent liability when it operates the flight departing from the EU. The liability crystallises if the passenger reaches the final destination at least three hours late. The territoriality principle does not prevent the Regulation from using the delay on the later flight to quantify the compensation.

The claimant booked a single journey with Air Canada from London Heathrow to Austin via Toronto. Air Canada was a non-Community carrier. The first flight was on time, but the second flight, operated wholly outside the EU, was delayed and the claimant arrived at Austin five hours and 49 minutes late.

The claimant sought compensation under Article 7 of Regulation 261. Air Canada argued that the Regulation did not apply because the carrier was non-Community and the causative delay occurred outside the EU. The central issue was whether delay on the second connecting flight had to be taken into account.

1. Applicable law. Following Lipton v BA City Flyer Ltd [2021] EWCA Civ 454, the claim fell to be determined under Regulation 261 as amended by the Air Passenger Rights and Air Travel Organisers’ Licensing (Amendment) (EU Exit) Regulations 2019. The amendments made no substantive difference to the issues in this case. The court was bound by relevant retained CJEU case law and the Court of Appeal’s decision in Gahan v Emirates [2017] EWCA Civ 1530.
2. Single booking and final destination. The claimant’s two flights were booked as a single journey. Under Sturgeon v Condor Flugdienst GmbH [2010] Bus LR 1206, Air France SA v Folkerts [2013] All ER (EC) 1133, Wegener v Royal Air Maroc SA [2018] Bus LR 1366 and CS v České aerolinie a s [2019] Bus LR 1893, connecting flights covered by a single booking constitute one unit for compensation purposes. The relevant delay was therefore the delay on arrival at Austin.
3. Territoriality. Regulation 261 was engaged because the journey began at Heathrow. Following the analysis in Gahan, the Regulation imposes a contingent liability on a non-Community carrier when it operates the flight departing from the EU. It is immaterial that the delay was caused outside the jurisdiction. The use of the later flight’s delay quantified a liability imposed within the jurisdiction and did not offend the territoriality principle.
4. Air Canada’s argument that the relevant reasoning in Gahan was obiter was rejected. The Court of Appeal had addressed the relevant arguments and stated the approach to the interpretation of Regulation 261. The subsequent decisions in Wegener and České aerolinie were consistent with that approach.
5. The claimant arrived more than five hours late at the final destination. She was therefore entitled to compensation. Judgment was entered for the claimant in the sum of £520, being the amount provided by the amended Regulation.

The judgment records that the claim was issued in the County Court, where the claimant’s application for summary judgment was unsuccessful. The defendant then obtained an order transferring the claim to the High Court. The present judgment determined the substantive claim at first instance.