EU261 reform: Expanded passenger rights could ‘double’ airline costs
May 26, 2026
Plans to strengthen air passenger rights in the European Union could double the cost burden on airlines, industry group Airlines for Europe (A4E) has warned.
The existing EU 261 regime already costs carriers around €8bn a year, according to figures cited by the European Commission, but proposals being debated in Brussels – including easier access to compensation and extra baggage entitlements – would push that bill to €15bn annually.
Ourania Georgoutsakou, managing director of A4E, described the system as “an insurance policy that all passengers will pay for as part of their ticket price” and urged decision makers in the EU to take a more “pragmatic” approach.
Speaking at Routes Europe, hosted this year in the Italian city of Rimini, she argued that expanding compensation rights risked making flying more expensive and less accessible.
While the EU261 rules have increased costs for airlines, they are hugely popular with travellers who can use the regulations to claim compensation when a flight is more than three hours delayed.
What reforms to EU 261 are being proposed?
In October 2025, the European Parliament’s Transport Committee adopted its negotiating guidelines on EU261 reform. It includes maintaining the right to compensation after a three-hour delay, guaranteeing free cabin luggage, consisting of a personal item and crucially a small trolley bag, and banning fees for check-in, child seating and booking corrections.
The reforms would also require airlines to send a standard compensation form or activate alternative automatic communication channels within 48 hours of disruption, with passengers given one year to claim the compensation.
MEPs want the introduction of pre-filled forms for compensation and reimbursement requests, to simplify claims processing and help passengers and airlines avoid the use of claims agencies.
The reforms would also see a defined list of “extraordinary circumstances” based on existing CJEU EU261 case law created, which would include circumstances such as natural disasters, war, weather conditions or unforeseen labour disputes, but exclude airline staff strikes.
The most notable differences with the current rules are those relating to cabin baggage.
The stance of the committee and a majority of MEPs is also at odds with the European Council’s June 2025 agreement to raise the delay threshold to four or six hours.
What does the industry think of the proposals?
Georgoutsakou said that conversations around offering all passengers a second free carry-on bag, “translates into everybody’s obliged to pay for a second bag, no more choice of, ‘do I want to purchase it, yes or no.’
The A4E managing director also warned that any move to offer passengers the right to a form of automatic compensation would make the aviation sector an outlier.
Separately, the International Air Transport Association (IATA) has expressed strong concern that proposed reforms of the EU261 package would “entrench and worsen its flaws”.
There is no evidence passengers want these provisions, IATA said, citing its own passenger survey in May which showed 72% prefer to have the lowest fare and pay for additional services as required.
Featured image: tomispin | stock.adobe.com
