Consumer Rights Improve Service Quality: Evidence from EU Air Passenger Rights. College of Europe Policy Brief #13.18, October 2018

Gnutzmann, Hinnerk and Śpiewanowski, Piotr (2018) Consumer Rights Improve Service Quality: Evidence from EU Air Passenger Rights. College of Europe Policy Brief #13.18, October 2018. [Policy Paper]

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Abstract

> Flight delay is a widespread quality problem in the airline industry, with the average flight being delayed by more than 10 minutes. > The problem is addressed by the Air Passenger Rights Regulation (“EC261”) on flight delay, a flagship EU consumer protection policy. > Under the regulation, airlines are liable for providing care as well as substantial cash compensation for passengers in case of long delays. > These provisions provide incentives for airlines to improve service quality, substantially reducing the likelihood of flights being delayed. > The key to success is enforcement. In case of airline delay, this has been achieved partly through the market: The regulation created incentives for claim agencies to emerge. > As illustrated by the case of air passenger rights, consumer rights policy thus not only provides insurance, but can also improve service quality.

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