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The European Court of Justice Thursday ordered Irish airline Ryanair to compensate passengers whose travel plans were thrown into chaos by the 2010 eruption of an Icelandic volcano, in a ruling with implications for the entire industry.
The airline immediately warned that ticket prices even for budget travellers will rise to offset costs from any future extreme events that the company previously considered to be "acts of God" for which it was not financially responsible.
"Today’s decision will materially increase the cost of flying across Europe and consumer airfares will increase as airlines will be obliged to recover the cost of these claims from their customers," Ryanair said in a statement.
The company insisted that "defective European regulation does not allow us to recover such costs from the governments or unions who are responsible for over 95 percent of flight delays in Europe."
The Luxembourg-based court was ruling on a case brought by an Irish citizen that has implications for travellers on all carriers in European Union airspace should unforseen events wreak havoc with schedules in the future.
The judges said that when flights are cancelled in "extraordinary" circumstances such as the eruption, which sent a giant ash cloud floating across Western Europe and beyond, even low-cost airlines had an "obligation" to lodge and feed passengers before they could finish their journey.
Denise McDonagh brought the case to a Dublin court after her flight from Faro, Portugal to Dublin was cancelled. She had a five-day wait before flights between Ireland and the rest of the continent were re-established and a seven-day delay before she got home.
The volcanic eruption in April 2010 caused the planet's biggest airspace shutdown since World War II, with more than 100,000 flights cancelled and eight million passengers stranded.
In an experience familiar to many passengers, Ryanair refused to cover any of McDonagh's expenses during the delay, but the judges ordered the company to pay her almost 1,330 euros ($1,800) to cover costs incurred during the week in limbo.
Irish judges had asked the EU's top court to rule on whether the volcanic eruption constituted "extraordinary" circumstances, and the court said there was no category of "particularly extraordinary" events that would allow carriers to be exonerated from their obligations.
Further, the judges said that there should be no time limit on claims for such compensation, exposing Ryanair especially to a substantial bill -- the other big airlines are understood to have mostly dealt with their own backlogs of compensation claims from travellers.
Ryanair complained in its statement that "when governments closed large swathes of European airspace unnecessarily in response to non-existent 'ash clouds' over Ireland, the UK and continental Europe in 2010, the travel insurance companies escaped liability by claiming it was an 'Act of God'."
The term "act of God" is a legal expression for events outside of human control, such natural disasters, for which no one can be held responsible.
Thursday's ruling, Ryanair argued, "now makes the airlines the insurer of last resort even when in the majority of cases ... these delays are entirely beyond an airline’s control."
Ryanair did not indicate in its statement how many passengers could now come forward and lodge claims for compensation for expenses incurred due to the eruption.