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Can consumer rights improve on-time performance? Evidence from European Air Passenger Rights

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  • Gnutzmann, Hinnerk
  • Śpiewanowski, Piotr

Abstract

Under EU Air Passenger Rights legislation (“EC261”), carriers must provide assistance and cash compensation to passengers in case of long delay. We study whether the regulation reduces flight delay. EC261 applies uniformly to flights departing from the EU, but covers only EU carriers on EU-bound flights. Exploiting this variation, we find that regulated flights are 5% more likely to arrive on time, and mean arrival delay is reduced by almost four minutes. The effect is strongest on routes with little competition, and for legacy carriers. Thus, consumer rights can improve quality when incentives from competition are weak.

Suggested Citation

  • Gnutzmann, Hinnerk & Śpiewanowski, Piotr, 2023. "Can consumer rights improve on-time performance? Evidence from European Air Passenger Rights," Transport Policy, Elsevier, vol. 136(C), pages 155-168.
    • Handle: RePEc:eee:trapol:v:136:y:2023:i:c:p:155-168
    DOI: 10.1016/j.tranpol.2023.03.017
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    References listed on IDEAS

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    More about this item

    Keywords

    Consumer protection; Flight delays; Service quality; Regulation; EC261/2004;
    All these keywords.

    JEL classification:

    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation

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