On 13 June 2024, the Court of Justice handed down its judgment in Case C‑385/23, Matkustaja A v Finnair Oyj, on the interpretation of Article 5(3) of Regulation (EC) No 261/2004. The request has been made in proceedings between Matkustaja A (“A”) and Finnair Oyj (“Finnair”) concerning the latter’s refusal to pay compensation to that passenger whose flight was cancelled.

A booked a flight with Finnair from Helsinki to Bangkok, which was to be operated by an aircraft entered into service a little over five months earlier. Shortly before take-off, however, the fuel gauge of that aircraft experienced a technical failure during refuelling, which was unknown before and due to a hidden design defect affecting all aircraft of the same type. Taking the view that the failure fundamentally impinged on flight safety, therefore, Finnair cancelled and operated it the following day, and so that flight reached its destination some 20 hours late.

As a result of Finnair’s refusal to pay the sum of EUR 600 as a compensation, A brought an action before the käräjäoikeus (District Court), which was upheld. The Court of second instance, however, upheld the appeal brought by Finnair, and so A filed a petition before the Korkein oikeus (Supreme Court of Finland; the “referring court”) which, in light of the need to interpret the relevant European legislation, decided to stay the proceedings and to ask to the Court of Justice whether Article 5(3) of Regulation No 261/2004 must be interpreted as meaning that the occurrence of an unexpected and unprecedented technical failure affecting a new aircraft model recently put into service, which results in the air carrier cancelling a flight, is covered by the concept of “extraordinary circumstances” within the meaning of that provision, where the manufacturer of that aircraft recognises, after the cancellation of that flight, that that failure was caused by a hidden design defect concerning all aircraft of the same type and impinging on flight safety.

According to the Court, despite the resolution of a technical problem caused by a breakdown, a failure to maintain an aircraft or the premature and unexpected failure of certain aircraft parts is considered to be inherent in the normal exercise of the activity of the air carrier, this does not occur in a situation where the manufacturer of the aircraft comprising the fleet of the air carrier concerned, or a competent authority, reveals that, despite already into service, they are affected by a hidden manufacturing defect impinging on flight safety. Moreover, although it is for the air carrier to ensure the maintenance and proper functioning of the aircraft it operates for business purposes, it is questionable whether, where a hidden design defect is revealed by the manufacturer of the aircraft in question or by the competent authority only after the cancellation of a flight, it actually falls within the remit of that carrier to identify and correct that defect, so that it cannot be considered to exercise control over the occurrence of the latter.

Marco Stillo