STAFF NEWS & ANALYSIS
Why the EU's New Bill of Rights for Airline Passengers Won't Fly
By Staff News & Analysis - March 13, 2013

EU unveils new air passenger rights … New rights for airline passengers have been unveiled by the European Commission. They include rerouting travellers with rival carriers if a flight is delayed for more than 12 hours. The rules also clarify what are considered exceptional circumstances for compensation. For example, mechanical failures on board the aircraft do not count, but natural disasters and traffic control strikes do. The Commission says the new rules, which are not likely to become law until 2014, will give a lot more certainty to airlines and passengers. "It is very important that passenger rights do not just exist on paper," said EU transport commissioner Siim Kallas. "We all need to be able to rely on them when it matters most – when things go wrong." – BBC

Dominant Social Theme: The EU is looking out for YOU.

Free-Market Analysis: The European Union is trying to make it easier for people to fly. But as we can see from another article in this issue, the EU and supporters use the implacable authority of government and the threat of force and monetary manipulation to support an ongoing expansion.

At this point in its life cycle, Western regulatory democracy is increasingly intrusive – and thus those who have industriously created it are determined to offer what they consider to be its benefits. The European Union itself is acquiring economic and political powers at a rapid clip and therefore illustrating its positives is more important than ever.

It also true that the EU has little to celebrate these days. With its Southern flank mired in depression and its two main backers – Germany and France – struggling with domestic dissatisfaction, Eurocrats want citizens to perceive Brussels as a friendly activist. Here's more from the BBC article:

He added: "We know that the real priority for stranded passengers is just to get home. So our focus is on information, care and effective rerouting."

During the Icelandic ash cloud crisis in 2010, when no flights could take off in Europe for several days, there was much confusion about how much responsibility the airlines should carry for the welfare of its passengers.

Some airlines were initially very reluctant to cover passengers' costs, but threats from the European authorities brought them into line.

Ryanair recently lost a case in the European Court of Justice against a passenger who had a seven-day wait for a Faro-Dublin flight. She had spent nearly 1,130 euros (£968) on a hotel, food and transport. The court ruled that Ryanair should have fully compensated her.

There have also been some concessions to industry. Under the planned measures, airlines will have to pay for a maximum of three nights' hotel accommodation – although this does not apply to passengers with reduced mobility, unaccompanied children or pregnant women.

The article refers to the Icelandic "ash cloud" that grounded flights for days but does not remind readers that there were many – including experienced pilots – who believed the grounding was unnecessary and reflected Brussels's uncontrollable urge to operate a "Nanny" state.

The biggest question surrounding this bill of rights – also not dealt with in the article – is why it is necessary at all. Over and over, politicians find it fashionable to issue various lists of "rights" that governments and industry will supposedly guarantee. This is a bit like two wolves and a lamb discussing what's for dinner, however.

The only guarantor of "rights" in the marketplace is competition, what Adam Smith called the Invisible Hand. The trouble with regulatory democracy is that it substitutes state coercion for competition. It makes it clear to competitors that they have to move in a kind of regulatory lockstep that precludes them from offering significant innovations.

When entities that compete are constrained from providing necessary solutions via regulatory concerns, then the customer receives approximately the same kind of treatment from all, and inevitably this treatment degrades over time due to lack of competition.

When industry services become virtually intolerable, regulators will often step in these days with a "bill of rights" that allows government to pose as a solutions provider and consumer protector.

After Thoughts

Unfortunately, it is regulatory democracy that creates the problem in the first place and a declaration of rights cannot fix the problem. Only competition can.

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