OGH: Compensation in the case of an overbooked flight

Mar 25, 2022 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (Oberster Gerichtshof, OGH) has ruled that a compensation payment pursuant to Art 7 of the Air Passenger Rights Regulation is to be applied as a benefit against further material and immaterial damages resulting from a denied boarding.

In the case at hand, the plaintiffs had booked a flight from Vienna to Naples for a short holiday. Because the outward flight was overbooked, the plaintiffs were denied boarding. As a replacement flight, the airline offered a flight on the next day. However, the plaintiffs were not interested in this because it would have reduced their stay from two and a half days to only one full day. As a result, they received the ticket costs and a compensation payment of EUR 250 each.

One of the two had paid for a hotel and a rental car for the shared holiday. These costs were not reimbursed. They therefore claimed hotel and car rental costs as frustrated expenses and demanded compensation.

Before the OGH, it was disputed whether the compensation payment was to be considered as a benefit according to the Air Passenger Rights Regulation and whether the claim for damages was therefore reduced by the corresponding amount.

According to the European Court of Justice (ECJ), compensation is to be assessed according to national law. The plaintiffs claimed that the compensation payment only covered immaterial damages and that there was therefore no congruence between the compensation payment and the frustrated travel expenses.

According to the OGH, this is not the case. According to the now prevailing doctrine, compensation payments are to be offset against both material and immaterial claims for damages if they result from the same reason for liability, such as denied boarding. This should prevent possible overcompensation of the passenger. The German Federal Supreme Court took a similar view. In addition, Section 12 para 5 Package Travel Act (Pauschalreisegesetz) also provides that compensation payments are to be offset against contractual claims for compensation against the air transport operator.

According to the OGH, however, a shared trip does not make a shared frustrated expense if reimbursement, cost sharing or shared holiday budget are not intended.

Therefore, only the compensation payment of one passenger was to be considered as a benefit.

OGH 4 Ob 177/21i (16.12.2021)