The Civil Aviation Authority v Ryanair DAC (Rev1)

Under Article 5(3) of Regulation (EC) 261/2004, “extraordinary circumstances” are construed narrowly and from the passenger’s perspective. The operative question is whether the event is inherent in the normal activities of the air carrier or external to them. The inquiry is conceptual and ordinarily requires only cursory, broad-brush fact-finding. Industrial negotiations and strikes by the carrier’s own employees, including strikes organised through unions and prompted by unreasonable demands, remain internal to the carrier’s normal activities. Temporary loss of practical control does not alter that conclusion. Such strikes therefore do not constitute extraordinary circumstances merely because they cause cancellations at short notice or expose the carrier to substantial compensation liability.

The Civil Aviation Authority brought enforcement proceedings under Part 8 of the Enterprise Act 2002 concerning cancellations of Ryanair flights caused by pilot and cabin-crew strikes in several European countries in 2018. The passengers were prima facie entitled to compensation under Article 5(1)(c) of Regulation (EC) 261/2004.

Ryanair relied on Article 5(3), contending that the strikes were extraordinary circumstances because they resulted from union demands, negotiations breaking down and employees withdrawing their labour. The parties agreed that the reasonable-measures requirement was satisfied. The central issue was whether the strikes were extraordinary circumstances.

1. The enforcement order was made. The strikes did not constitute extraordinary circumstances, so Ryanair was obliged to pay compensation under Article 5(1)(c) of Regulation (EC) 261/2004.
2. The Regulation pursues a high level of passenger protection. The derogation in Article 5(3) must therefore be construed strictly. The question is whether the event is inherent in the normal exercise of the carrier’s activity and within its actual control, understood in the wider sense of falling within the ambit of its ordinary business activities, rather than in the narrow sense of something the carrier can immediately prevent or control.
3. Foreseeability and fault are not decisive. Technical problems arising in ordinary operations may remain internal even if unexpected, while events external to the carrier, such as bird strikes or airport-related incidents, may be extraordinary even where the carrier has contingency arrangements for them.
4. The procedure is intended to be summary. Fact-finding should be limited to identifying whether the event is internal or external to the carrier’s normal activities. It should not become a detailed inquiry into which party was at fault for negotiations breaking down, or into the reasonableness of the parties’ negotiating positions.
5. Negotiation of employees’ terms and conditions, including robust or unreasonable bargaining positions, breakdown of negotiations and withdrawal of labour, forms part of the normal activities of an air carrier. Union involvement does not make the event external where the union acts on behalf of, and with the endorsement of, the carrier’s employees. A different conclusion might arise for genuinely external activity, such as secondary picketing unrelated to the carrier’s own employees.
6. The court reached the same conclusion as the Grand Chamber in Airhelp Limited v Scandinavian Airlines System SAS, without relying on it. The observation in that decision concerning strikes arising from demands only public authorities could satisfy was treated as obiter and was immaterial to the present case.