Supreme Court rules against Iberia – No Show Policy Struck Down

The Spanish Supreme court today laid down a ruling against Iberia which could have massive wide ranging implications to not only all Spanish airlines but all airlines operating in and around the European Union. The results today are a huge win for the consumer and those of us who like to fly AND get great deals.

The Spanish equivalent of the Consumer Protection Bureau presented a case in court against many of the specific clauses in Iberia’s terms and conditions and contract of carriage. Among many of the clauses that the court has ruled abusive are the ones dealing with Iberia’s ability to modify reservations, especially involving connections, and more specifically, the airline’s no show policy. Typically, as I’m sure you know, when you miss one portion of the journey the other legs are subsequently forfeited.

The court has stated that the absence of a passenger on a specific flight does not increase the airline’s cost, in fact it decreases it, limiting their liability. The airline has charged a specific price for a ticket (and its various segments) and the passenger should have the right to use any or all of that ticket assuming that it does not cost the airline more (which logically it does not).

Iberia logo

Iberia logo

So… what’s the ruling?

According to Ultima Llamada, the text from the ruling reads as follows:

“La cláusula en cuestión supone un desequilibrio de derechos y obligaciones contrario a la buena fe, puesto que a un consumidor que cumplido con su obligación, que es únicamente el pago del precio, se le priva en todo caso del disfrute de la prestación contratada, que por razones que pueden ser de naturaleza muy diversa ha decidido o se ha visto impedido a disfrutar solo en parte”

For those not proficient in Spanish, it states that the passenger has complied with it’s only obligation, which is the payment of the price charged. Passengers are being deprived of their contracted services by the cancellation of those flights.

Iberia’s ability to change, at any time and for any reason, their terms and conditions, is too broad, and doesn’t fall in line with the EU’s regulations, which apply to only extenuating circumstances.

Wow.

If I’m interpreting this correctly, the court is literally saying that the passenger has paid $X for a flight, and if the airline decides to cancel a part of their ticket, THEY are the ones not complying with the services as promised, whether or not the passenger decides to take all the flights or not is up to the passengers.

Wide ranging implications

We wrote a big article that went viral last month about United Airlines threatening to take clients to collections for using hidden city ticketing, a process by which you can change your destination and potentially lower the price of said itinerary. Could this new ruling spell problems for United, since they operate flights to Spain and by extension the EU?

If this ruling does get out of Spain and make it to the EU in general, this could be a huge win for consumers like you and me. Often, airlines charge exorbitant amounts for one way tickets, and if this was a way to spend less for the same flight, it could spell a big win for us.

What’s your take?

Should airlines be able to cancel your ticket for a no show? What’s your legal take? Share in the comments below!

 

Author: Jon Nickel-D'Andrea

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9 Comments

  1. That would save me a hell of a lot of direct turn arounds both before flights as after. Yes I fly last legs too as I can work in the plane well. But not having to go to X first hell thats good. BUT I am afraid the real deals will be gone soon then. But at the otherhand.

    Let say A to B is 2000. But C A B is just 900. (Something i actually fly now). If you plan to get in in A amd fly AB amyway. What if that flight is delayed. Then the airline might route you C to B direct. You buy a ticket from C to B not persew via A.

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    • That’s the other part of what they are saying in the judgement. Iberia shouldn’t re route with different connections without the consent of the passenger.

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  2. “Often, airlines charge exorbitant amounts for one way tickets” That’s true but if this becomes EU law, what prevents FSC airlines from raising the fare to cover this cost or worse, make return ticket = 2 one-way ticket (which is what LCCs already do)? How is that beneficial for passengers?

    And how is this applicable to UA? Yes, UA flies to Spain but can you give example where there’s actual price arbitrage on United’s US-EU flights? I’m only aware such pricing arbitrage opportunity (i.e. hidden city ticketing price) on UA’s intra-US flights and not UA flights to/from EU. Furthermore, what is the basis of your assumption this decision will apply to UA flights to the EU (i.e. non-EU point of sale)? Even EU261 is limited in the sense that it only applies to non-EU airlines on flights from the EU and not their flights to the EU. Are you saying this decision is more expansive that EU261 in its reach/applicability to non-EU airlines?

    I think a more appropriate example would be BA fares ex-Scandinavia, no? Then again, with Brexit who knows whether those politicians will treat UK airlines as EU or non-EU airlines for purposes of EU261 or this decision …

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    • IF they’re not in the EU then they’re not in the EU 🙂

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  3. I think the ruling makes perfect sense but if it gets widespread the ticket prices will rise in general

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    • I doubt that would happen. I think it’s a small subset of people that will truly take advantage of this.

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  4. To begin with, this will only apply to tickets purchased in Spain, and ATM only with IB… so it won’t apply to an ORY-MAD-JFK…

    Second, it is not the first country… look at Italy! There’s already something going on there… and has had little impact.

    Anyway, interesting times ahead.

    Post a Reply
  5. “…. this could be a huge win for consumers like you and me. ”

    Yeah right.

    What you fail to grasp is that if airlines are banned from enforcing hidden city ticketing rules, then they’ll change their pricing structure to make gaming the system uneconomical while still conforming to the law. They’re not going to sit idly by and lose revenue as people booked on cheaper tickets to to the likes of Krakow, Dresden and Catania walk off at Paris, Amsterdam or Madrid. They’ll price those one stops to be at least as expensive (and likely more so) than the flights to the hubs. Or they may not offer through tickets at all. People like you trying to game the system still won’t be able to benefit from it. But millions will lose out by having to pay more, those being the innocent people that actually need to fly through hubs to/from those smaller cities. It’s going to be a huge loss for them, and all because of people like you and your ploys.

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    • The idea that ‘people like us and our ploys’ are the reason that ticket prices go up is not just naive but ludicrous. Prices rise because airlines (just like all other companies) are overly greedy, and the average consumer -namely you, in this case- are more than happy to overpay for a service that’s ever declining in quality. This is exactly what this ruling aims to do: preventing companies from gouging customers with their abusive terms and conditions. And while yes, this isn’t nearly sufficient to curb all of the airlines’ abusive behaviors, it is a step in the right direction.

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