The battle over the reform of European air passenger rights reached a new milestone on Tuesday 2 June. Two weeks after joining 34 regional airlines in a bid to persuade Brussels to suspend the revision of Regulation EU261, Luxair is back on the offensive, backed by economic arguments.

The Luxembourg-based company supports a study published by the European Regions Airline Association (Era), which estimates that the proposed changes could undermine the entire European regional aviation sector. According to this analysis carried out by the consultancy firm Oxera, the annual cost of the current compensation scheme already amounts to €8.1bn for the sector. The proposals put forward by the European Parliament could push this bill to over €15bn.

For regional airlines, the debate goes far beyond the issue of compensation paid to passengers. They fear a knock-on effect on their business model, which is already under pressure from rising operating costs and often slim margins. The study highlights fare increases, reduced frequencies and even the discontinuation of certain routes, particularly in the most vulnerable markets.

A standoff that is far from over

Era advocates a vision of regional aviation as both an economic infrastructure and a commercial activity. The association estimates that this sector generates €228bn in gross value added and supports 4.8 million jobs in Europe. Beyond the figures, it highlights its role in providing access to healthcare, education, employment, tourism and public services in many outlying regions.

Passenger protection must go hand in hand with ensuring access to air travel.

Gilles Feith, CEO, Luxair

For Luxair, the issue has a direct impact on Luxembourg. The airline highlights its role as a bridge between the Grand Duchy, the Greater Region, major European cities and international hubs. In a country whose economy relies heavily on its international connections, any reduction in air connectivity could have repercussions far beyond the transport sector.

“Luxair is a responsible airline and we fully support fair and equitable passenger rights. But protecting passengers must go hand in hand with ensuring access to air travel,” says its CEO, Gilles Feith, in the press release. The executive warns that regulations making regional routes less viable would ultimately penalise passengers themselves as well as the regions they serve.

In Brussels, the standoff is far from over. Advocates for stronger passenger rights believe that airlines still have considerable room for manoeuvre. Regional carriers, for their part, are trying to convince policymakers that regulations designed for large groups and low-cost airlines could have unintended consequences for the most vulnerable players in the market. Behind the technical debate on compensation lies a broader question: to what extent is Europe prepared to protect passengers without undermining the connectivity of its regions most dependent on air travel?