The First Chamber of the Mexican Supreme Court of Justice (SCJ) confirmed that air carriers must compensate passengers if they are denied boarding due to overbooking of a flight.

In recent days, an extract of the judgement of the constitutional trial in review 401/2023 containing the above criterion was made public.

Due to overbooking of seats a passenger was denied boarding from a Paris-Barcelona flight that departed on September 14, 2017. From Barcelona the passenger was going to take a connecting flight to London and from London to Mexico City as his destination. By not being able to take the first flight, the passenger missed both the connecting flight and the final flight to Mexico City.

In his lawsuit, the passenger argued that by missing the connecting flight, he had to make not foreseen out-of-pocket expenses, he also asked for the payment of moral damages because of the distress he experienced.

From the very beginning, the passenger invoked the unconstitutionality of article 54 of the Aviation Act (AA). According to him, the passenger’s constitutional equality and non-discrimination rights were violated.

The Federal Tribunal (tribunal colegiado) that heard the constitutional lawsuit brought by the passenger, dismissed the claim. Subsequently, the passenger appealed the issued judgement and insisted on the unconstitutionality of article 54 of the AA.

Likewise, the passenger pointed out that given a child was involved in the contract of international air carriage, the principle of the superior interest of childhood should be privileged. The SCJ chose to hear this case due to the exceptional interest in human rights it entailed. In addition, there was no jurisprudence on the constitutionality of article 54 of the AA.

SCJ’s decision

Article 54 of the AA provided that in connecting flights, the air carrier shall compensate passengers for the damages caused to them and their checked baggage in transit, or for delay in the service of air carriage, provided that the connecting flight is part of the contract executed between the airline and the passenger.

The passenger argued that the article 54 gives unfair treatment to those who miss a connecting flight that is not a part of the contract entered into with the carrier.

In its decision, the SCJ concluded that article 54 of the AA does pursue a valid constitutional purpose because it seeks protection of the passenger. In addition, it is natural that the article provides that for the carrier to be obliged to compensate for the damages caused to passengers and checked baggage in connecting flights, said obligation should be subject to the fact that such connecting flight is part of the contract executed with the carrier and not with a different airline.

On the other hand, the SCJ added that from the facts described by the passenger in his complaint, it follows that the case should rather be analyzed under article 52 of the AA, because the airline obligation to compensate for the damages caused stem from a flight overbooked.

Article 52 of the AA established as follows:

“When tickets have been sold more than the available capacity of the aircraft and consequently denied boarding takes place, the airline shall at the passenger’s choice:

I.                     Refund the ticket or the amount that corresponds for the leg of the flight missed.

II.                   Offer with all the means available, substitute carriage in the first available flight and provide him, at least and with no charge, telephone communication to his destination point; meals in accordance with the wait time until boarding another flight; hotel accommodation at the airport or in the city when overnight if required, and in the latter case road transportation from and to the airport; or

III.                 Carry the passenger at the latter date that best fits his interest to the destination which denied boarding took place.

In regard to the paragraphs I and III above, the carrier shall also compensate the passenger at an amount equivalent to at least 25% of the ticket or the corresponding missed leg of the trip.”

The passenger chose the option II above because the airline provided him with boarding passes for a flight departing the following day and a voucher covering meals and hotel accommodation.

According to the SCJ, when the Federal Tribunal (tribunal colegiado) reviewed the passenger claim, it should have concluded that the applicable provision was the article 52 instead of 54 of the AA. Likewise, it should have resolved that the last paragraph (in bold letters) of such article 52 was unconstitutional.

This is because the affected passenger was underage, therefore the federal tribunal should have applied the principle of amendment to deficient pleadings provided by the Mexican law.

The last paragraph of article 52 of the AA is unconstitutional because unlike paragraphs I and III that acknowledge that a flight overbooked might cause damages to passengers other than missing the flight itself, therefore establishing compensation obligations for air carriers; on the other hand, paragraph II exempts the airline from the obligation to compensate the passenger for the damages caused by the flight overbooked.

Hence, according to the SCJ judgement such last paragraph prevents the passenger from receiving a fair compensation for the damages caused.

Remarks on the SCJ’s decision

The SCJ has adopted in recent judgements a protective position regarding consumer rights, hence its decision is not surprising. The court has pointed out that consumer protection is constitutional because it aims to reduce airline-passenger inequality during the consuming process.

However, the case at hand may be analyzed from different perspectives giving rise to valid arguments that could be defended before courts in Mexico.

Denied boarding due to overbooking may be confused with other terms acknowledged by the AA like flight delays which also impose a compensation duty by the airline.

For example, what would have occurred if the airline had offered the passenger a substitute flight to his destination within 3 hours of the flight’s scheduled departure instead of the next day? This is irrespective of the voucher for meals provided by the air carrier.

Would the passenger miss the flight due to overbooking as the SCJ concluded? or would there have been a delay in relation to the flight’s scheduled departure?

According to the Mexican law, the compensation rules for delays of less than 4 hours are less strict than those applicable to flight overbooking.

The then valid article 47 Bis paragraph V provided for as follows:

“In case of delay of the flight in relation with the scheduled hour of departure set in the ticket and the cause for such delay is attributable to the airline, the passenger shall be indemnified and/or compensated by the supplier of the service in accordance with the following basis:

a)       When the delay is of more than an hour and less than 4, the passenger shall be compensated according to the air carrier compensation policies.

Those policies shall include at least discounts for flights later to the agreed destination and/or meals and beverages, according to what is established by the air carrier and the principle of competitiveness.

If the delay is of more than 2 hours but less than 4, the discounts included in the compensation policies cannot be less than 7.5% of the ticket price…”

As mentioned above, the compensation for delays of less than 4 hours does not include -like in the case of overbooking a flight- the payment of an amount equivalent to at least 25% of the ticket price or the corresponding missed leg of the trip.

It should be noted that for the passenger to receive the above compensation for flight delays, the cause must be attributable to the air carrier.

Now, could overbooking a flight be regarded as a delay cause attributable to the airline? I think so.

If the delay attributable to the airline was of more than 4 hours, the Mexican law regards such a delay as flight cancellation, which basis for compensation is established in paragraph VI of the above-mentioned article 47 Bis.

The compensation duty by the airline fur such a delay is practically identical than the one analyzed by the SCJ for overbooking a flight as established in article 52 of the AA.

If a flight is cancelled or delayed for more than 4 hours, in both cases due to causes attributable to the airline, the constitutionality of paragraph VI of article 47 Bis may be challenged as well. This is because such provision contemplates the same compensation rules than the ones of article 52 of the AA analyzed by the SCJ.

With the difference that the air carrier could still plead in its defense that the flight cancellation was due to causes not attributable to the airline for it to be exempted from the obligation to compensate the passenger like in the case of a flight overbooked.

Subscribe to our newsletter to immediately receive the last news and recommendations on the field of business law in Mexico, by clicking on the following link