IATA warns EU261 reform is moving “in the wrong direction”

 

The International Air Transport Association (IATA) has expressed deep concern that proposed amendments to the EU261 passenger rights regulation by the European Parliament risk worsening long-standing issues rather than fixing them. According to IATA, the Parliament’s approach would increase costs for passengers and airlines while failing to address the regulation’s core weaknesses.

For years, EU261 has faced criticism for driving up costs without meaningfully improving the travel experience. In June, European governments took steps toward a more balanced framework by proposing changes to safeguard connectivity and maintain the competitiveness of European aviation. A key element of this reform was raising the delay thresholds for compensation—from the current three hours to four hours for short-haul flights and nine hours for long-haul flights. The intention was to reduce incentives for airlines to cancel delayed flights and better align compensation rules with passengers’ preference to arrive late rather than face cancellations.

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However, the European Parliament is now seeking to reverse these changes and add several new provisions, such as requiring airlines to offer free cabin baggage. IATA highlights that there is no evidence passengers are asking for such measures, nor that they are willing to pay the higher fares these rules would inevitably create. A recent IATA passenger survey found that 72% of travellers prefer the lowest fare and opt for additional services only when needed, while 97% reported being satisfied with their most recent flight experience.

IATA also points to Eurocontrol data showing that fewer than 1% of flights are delayed beyond three hours. “This means that 99% of passengers are paying for a compensation scheme which only 1% benefit from,” the association notes, arguing that reforms should therefore aim for greater efficiency and better value for money.

“A reverse Robin Hood”

IATA’s Director General Willie Walsh offered a strong critique of the Parliament’s approach, saying the proposed provisions amount to a “reverse Robin Hood”: “Everyone knows there’s no such thing as a free lunch. Similarly, there is no such thing as a ‘free’ bag or ‘free’ compensation thresholds. The EU Parliament’s new provisions to EU261 work as a ‘reverse Robin Hood’, putting further costs on to the 99% of passengers who don’t benefit from it,” Walsh said.

He added: “Given the choice, passengers would prefer to pay for a less gold-plated compensation scheme in exchange for lower fares. MEPs are meddling in business and operational issues they don’t understand. It’s essential the Parliament’s proposals are modified, and the Council position is upheld.”

Walsh stressed that the best way to ensure strong customer service is through competition and choice in a healthy aviation market. A properly reformed EU261, he said, could form the basis of a meaningful competitiveness strategy for European aviation and demonstrate that policymakers are taking seriously the lessons of last year’s Draghi report, which urged fewer and smarter EU regulations.

Connectivity concerns grow

IATA warns that the urgency for reform is increasing as connectivity growth slows across major European markets. Between 2014 and 2024, air connectivity grew on average by only 2.2% per year in France, 2.9% in the Netherlands and just 0.4% in Germany. The association argues that governments should take all possible measures to enhance aviation competitiveness.

Beyond correcting EU261, IATA calls for additional steps, including:

• Removing passenger taxes, which reduce connectivity and discourage route expansion. Sweden has already eliminated its passenger tax, and Germany has stated its intention to do the same.
• Revising the ReFuelEU Aviation Regulation and the EU Emissions Trading Scheme, ensuring that fuel producers are incentivized to deliver affordable Sustainable Aviation Fuel (SAF). Currently, airlines pay a USD 2.9 billion premium for SAF over traditional jet fuel, in addition to ETS obligations.

These rising costs, IATA warns, threaten the viability of new routes and added frequencies, ultimately limiting consumer choice.

For travel and aviation professionals, the debate around EU261 reform reflects broader tensions between consumer protection, market competitiveness and operational realities. The coming months will be crucial as EU institutions negotiate the final shape of the regulation – and its long-term impact on Europe’s air transport landscape.