The General Authority of Civil Aviation of the Kingdom of Saudi Arabia (the GACA) has approved the new Executive Regulations for Consumers' Rights Protection (the Regulations) which will come into force on 6 June 2017.
The new Regulations have a potentially broad application for the international airline industry. They will require revisions to the practices and procedures of airlines flying out of Saudi Arabia and potentially those which are part of code-share or interline agreements involving a flight sector into or out of Saudi Arabia.
The Regulations apply to:
- National and foreign airlines departing from airports within Saudi Arabia (domestic and international)
- National airlines arriving into Saudi Arabia (unless the passenger is compensated according to the regulations of the country of departure).
Whilst the Regulations are only directly applicable to national airlines arriving into Saudi Arabia, arriving foreign airlines may also be implicated because under the new Regulations, carriage performed by a number of consecutive sectors under an alliance or code share or commercial arrangement will be considered one undivided flight.
Potential liability under the new Regulations considerably exceeds the compensation levels available under the previous regime. In the event of overbooking, downgrading, delay or flight cancellation, airlines may be required to:
- Refund the ticket (or the unused portion); and
- Pay the passenger between 50% to 100% of the refund amount as additional compensation; and
- Provide care and assistance (including the cost of extending the passenger's hotel accommodation).
Carriage of disabled passengers
The Regulations require airlines to provide suitable facilities, care and assistance for disabled passengers. Failure to do so will result in payment of additional compensation to the passenger of 200% of the ticket value.
For lost or damaged baggage, the new Regulations provide that an airline shall indemnify the passenger:
- Between 350 and 1131 Special Drawing Rights (SDRs) (with no evidence of damage required)
Upon receipt of the delayed luggage, the airline shall pay the passenger:
- 20 SDRs for each day of delay to a maximum of 100 SDRs for domestic flights
- 40 SDRs for each day of delay to a maximum of 200 SDRs for international flights.
The new Regulations provide airlines with an exemption from providing compensation in cases of force majeure, which is any exceptional occurrence that cannot be avoided by taking all reasonable measures necessary to avoid the damage or if it is impossible for the airline to take such reasonable measures
However, force majeure excludes technical defect, failure of the aircraft, operational conditions or scheduling caused by the negligence of the airline or its agents.
Other recent passenger rights regulations in the Middle East, such as Oman and Egypt have set out broad examples of events which will deny a passenger's right to compensation. The European Court of Justice has also recently ruled on the meaning of "extraordinary circumstances" (following a collision between an aircraft and a bird – Peska v Travel Service ) http://www.kennedyslaw.com/casereview/ecj-rules-bird-strikes-extraordinary-circumstances/. Unfortunately, these Regulations provide no further guidance as to the extent of application of the force majeure exception.
Procedures, complaints and time limits
An airline operating into or within Saudi Arabia is required to publish its compensation policies and procedures applicable to the Regulations:
- On its website
- At the sale offices
- At the luggage collection points within airports.
Payment is to be made within 10 days of the airline acknowledging the passenger's right to compensation. If no acknowledgement is provided, the passenger must submit his or her complaint to the GACA within 60 days of the initial breach. If the airline then fails to respond to the GACAs notification within 15 days, the airline shall be deemed to have accepted that the complaint is valid and authentic.
In the event the airline is deemed in breach of the Regulations, it is liable to be fined by the GACA up to 50,000 Saudi Riyals (approximately US$13,300).
Airlines are required to be entirely transparent and must not provide misleading information when advertising prices and services. The advertised prices must be the total price and the airline cannot add any other additional fees unless expressly stated in the advertisement. This appears to be targeting the practice of drip or component pricing which airlines have been sanctioned for in other jurisdictions.
Given the broad scope of the Regulations; brokers, underwriters
and airlines whose operations either directly or indirectly touch
upon Saudi Arabia should appraise themselves with these changes.
Consideration should also be given to implementation of appropriate
procedures, advertising practices and risk transfer under
code-share and interline agreements and third party contracts with
aviation services providers.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.