Brussels wins battle over stranded air passenger directive

"The regulation on compensation and assistance for air passengers is valid," the ECJ said in Tuesday's ruling, which also dismissed the low fare air carriers' stance that compensation sums were discriminatory against them.

Compensation sums under the regulation range from a minimum of €250 and up to €600, while low fare airline tickets can cost less than a tenth of the minimum sum on the scale.

"The amount of compensation does not appear excessive and essentially amounts to an update of the level of compensation laid down by a previous regulation, taking account of inflation," the court said.

At the cancellation of a flight the airline must offer passengers a choice between reimbursement of the ticket cost or re-booking them on a flight to their final destination. And, should the plane be delayed by more than five hours, passengers must be reimbursed.

By introducing the regulation last February, the commission hoped to stamp out the airlines' common practice of intentionally overbooking flights, leading to boarding being denied for passengers who turn up late to the boarding desk, despite holding valid tickets.

Regulation mixes apples and oranges

ELFA secretary general Jan Skeels told EUobserver that the commission's original aim with the regulation was noble, but carried out wrongly.

"The commission should have increased the penalty for airlines that overbook on a systematic basis," she said, explaining that airlines estimate the average amount of passengers that do not turn up to certain flights, and intentionally overbook to make sure seats are filled.

However, Ms Skeels said that by mixing overbooking with flight cancellation and delays, the commission is shooting above its target, as 85 percent of cancellations or delays are due to factors outside airlines' control.

Airlines argue that they cannot be held responsible for delays and cancellations caused by bad weather, saturated air traffic, security demands or strikes. They estimate that the total cost to the industry of this regulation will top €600 million annually.

Airlines will try political path

IATA said that since the airline industry with Tuesday's ECJ ruling had emptied the legal possibilities of overhauling the law, they would shift their focus to a political approach, in order to persuade the commission to review its air transport policy as a whole.

"Europe needs better regulation. We will appeal to common sense," IATA spokesperson Tony Concil told EUobserver, arguing that the regulation does not only go against global air industry standards, but is also not beneficial for passengers.

"The industry looses approximately €600 million a year with this regulation and the industry will have to recuperate that money somehow."

EU transport commissioner, Jacques Barrot, on Tuesday called the result "very good news for European citizens."

"The European court now confirms EU legislation giving [passengers] certain rights when their flight is overbooked, delayed or cancelled."

MEP Philip Bradbourn, conservative transport spokesman in the European Parliament also praised the outcome of the court case.

"This is good news for air passengers. Finally there is no doubt as to the liability of airlines for unwarranted delays...Responsible airlines have been providing compensation on a voluntary basis for years - this judgment now means that the cowboys in the airline industry will be forced to change their ways," he said.