Who pays when travel plans go wrong? EU passenger rights overhaul redraws responsibilities
The new rules strengthen airline obligations around delays, rerouting, and passenger assistance, potentially reshaping aspects of travel disruption claims handling
A long-awaited overhaul of European air passenger rights aims to strengthen airlines’ obligations during disruption and clarify who is responsible when travel plans go wrong.
Following 13 years of negotiations, the European Parliament and the Council of the European Union have reached a political agreement on revisions to Regulation 261 on air passenger rights and airline liability rules.
The reforms, which are expected to receive final approval before taking effect from 2027, represent the first major update to the framework in more than two decades.
While much of the public attention has focused on free cabin baggage, family seating, and enhanced protections for passengers with disabilities, the most significant developments for the travel insurance sector relate to compensation, assistance, and rerouting obligations.
For insurers and claims handlers, one of the key outcomes is that the EU has largely preserved the existing compensation framework. Passengers will continue to be entitled to compensation when flights arrive more than three hours late, with compensation levels remaining broadly unchanged at €250, €400, or €600 depending on flight distance.
The decision is notable because airline groups had pushed for wider reforms to the compensation regime, arguing that the current framework imposes high costs while doing little to address the underlying causes of delays and cancellations.
Instead, lawmakers opted to retain a system under which airlines remain primarily responsible for many disruption-related losses.
A divided response
Industry reaction to the agreement has been mixed.
The International Air Transport Association (IATA) has criticised lawmakers for failing to address what it sees as fundamental shortcomings in the current system.
“After 13 years of discussion, the opportunity to improve Europe’s competitiveness and the passenger experience by addressing the flaws of EU261 was lost,” said Willie Walsh, IATA’s Director General.
Airlines for Europe (A4E), which represents many of the region’s largest carriers, described the agreement as a “missed opportunity for a balanced reform” and argued that maintaining the current delay and compensation rules would not reduce or prevent delays and cancellations, many of which are outside airlines’ control.
Consumer groups and lawmakers, however, have welcomed the agreement, arguing that it preserves important protections while making rights easier to exercise.
Roberta Metsola, President of the European Parliament, said the agreement would “strengthen the rights of air passengers across Europe”, citing easier compensation claims, stronger protections for families and passengers with disabilities, fairer baggage rules, and the retention of compensation rights after delays of three hours or more.
The European Consumer Organisation (BEUC) similarly welcomed the outcome, noting that passengers would continue to benefit from strong compensation rights and that airlines would be required to provide clearer information about how claims can be submitted.
The organisation also pointed to the clarification of “extraordinary circumstances”, arguing that the revised framework should provide greater certainty for both passengers and airlines regarding when compensation is owed.
What the changes mean for claims handling
The revised framework is unlikely to fundamentally alter travel insurance coverage. However, it could influence claims handling processes and recovery opportunities by creating clearer boundaries between airline liability and insurance responsibility.
This may be particularly relevant for insurers handling claims arising from missed connections, cancellations, overnight accommodation costs, and alternative travel arrangements, where overlapping obligations between airlines and insurers have historically created complexity.
The agreement also prohibits so-called ‘no-show’ clauses, which can result in passengers losing the remainder of a multi-leg itinerary after missing an earlier flight segment. Consumer groups have long argued that the practice creates avoidable disruption and additional costs for travellers.
Additional protections have also been introduced for passengers with disabilities, reduced mobility, medical needs, pregnant travellers, and unaccompanied minors. These include enhanced rights to assistance and rerouting, priority treatment during disruption, and stronger protections for mobility equipment.
For assistance companies managing vulnerable travellers, the changes may help establish clearer expectations around the support airlines are required to provide before insurers or assistance providers become involved.
The reforms now await formal approval before becoming law. While the changes are unlikely to transform the travel insurance market overnight, they do signal a broader shift towards clearer accountability across the travel ecosystem.