The International Air Transport Association, the global trade body representing more than 300 airlines, says proposed amendments to the European Union’s passenger-rights law will increase operating costs and push fares higher across global markets.
The warning targets the European Parliament’s plan to revise EU261, the regulation governing compensation for flight delays and cancellations.
IATA said the Parliament’s position abandons reforms supported by European governments earlier in the year. In June, the European Council proposed new compensation thresholds: four hours for short-haul flights within Europe and nine hours for long-haul routes connecting Europe to other regions. IATA said these thresholds would reduce unnecessary cancellations and align with passenger preference for arriving late rather than being off-loaded entirely.
The association argued that the Parliament intends to scrap those adjustments while adding new obligations, including a guaranteed right for passengers to carry one cabin bag free of charge. IATA said its May global passenger survey shows limited demand for such a rule. According to the data, 72 percent prefer the lowest fare with optional paid services, and 97 percent reported satisfaction with their most recent flight. Eurocontrol figures cited by IATA show that less than 1 percent of European flights are delayed beyond three hours, meaning the current framework forces the majority to pay for a scheme benefitting a very small minority.
IATA’s Director General, Willie Walsh, said the Parliament’s proposals would increase costs across the European air transport system and, by extension, for international passengers flying into or through the region. He described the new measures as a “reverse Robin Hood,” shifting financial burdens onto travellers who do not benefit from compensation awards. He said the Parliament is introducing rules that passengers have not requested and do not want to fund, warning that the approach interferes with airline operations without improving service quality.
IATA linked the debate to Europe’s weakening aviation competitiveness. Its economic data shows that connectivity growth between 2014 and 2024 slowed to 2.2 percent annually in France, 2.9 percent in the Netherlands, and 0.4 percent in Germany. The association said proper reform of EU261 is essential to reverse this trend.
Beyond EU261, IATA called for broader changes. It urged governments to remove passenger taxes that undermine route expansion, noting Sweden’s repeal of its passenger tax and Germany’s announced phase-out. It also called for revisions to the EU Emissions Trading Scheme and the ReFuelEU Green Deal, arguing that fuel producers must be incentivised to supply affordable Sustainable Aviation Fuel. Airlines currently face a $2.9 billion cost penalty for using SAF instead of conventional jet fuel, in addition to ETS charges.
