Airlines

Refunds, cancellations, overbooking: when the airline pays

All the details of the new reform on passenger rights. The reaction of the airlines and low-cost carriers

by Mara Monti

20 June 2026

5' min read

Translated by AI

Versione italiana

Key points

Passenger rights reform
When does EU Regulation 261/2004 apply
Financial compensation and support
Flight cancellations

5' min read

Translated by AI

Versione italiana

Missing a flight due to bureaucratic delays at border controls linked to the new Entry/Exit System (EES) does not fall within the scope of Regulation (EC) No 261/2004 on air passengers’ rights. In such cases, neither a refund of the ticket nor financial compensation is provided for. This is because border checks fall within the remit of the border authorities and, in such cases, there is generally no entitlement to financial compensation or a refund of the ticket price

Passengers are, however, entitled to a refund of their ticket in various circumstances set out in the European Regulation. In particular, this applies when a flight is cancelled and the passenger decides not to accept an alternative solution offered by the airline. The right to a refund also applies in cases of denied boarding due to overbooking and when the delay exceeds five hours.

Passenger rights reform

This issue forms part of the review of European legislation on passengers’ rights following 13 years of discussion. The political agreement reached between the European Parliament and the Council of the European Union must now go through the formal approval process before the new provisions come into force, which is scheduled for 2027.

The revision of the regulation has been criticised by IATA, the airline association, which had called for a change to the current compensation threshold, pointing out that airlines already pay 8 billion a year in refunds worldwide in response to claims from 1 per cent of passengers. Moreover, IATA points out, it is in the airlines’ interest to get passengers to their destinations and to be punctual, and this regulation does not alter the previous wording, which places the burden of refunds solely on the airlines, even when they are not directly responsible, according to the Association.

One of the most hotly debated issues, in fact, concerns the minimum delay threshold required to be eligible for financial compensation. The airlines and some Member States had proposed raising this to four or even six hours. The political agreement reached, however, retains the three-hour delay as the benchmark for entitlement to compensation.

The scheme continues to provide for compensation of up to 600 euros in the event of flight cancellation, denied boarding or significant delays attributable to the airline.

When does EU Regulation 261/2004 apply?

The Regulation applies to all flights departing from an airport in the European Union, as well as from Iceland, Norway and Switzerland, regardless of the airline’s nationality.

For flights arriving in the European Union, however, protection is guaranteed only if the operating carrier is based in the EU. This therefore excludes flights operated by non-European airlines bound for European airports, with the exception of UK carriers, to which EU rules still apply despite Brexit.

To be eligible for the protections provided for in the regulation, you must check in by the deadline set by the airline. Otherwise, you will lose your right to any compensation.

Financial compensation and support

The amount of compensation varies depending on the flight distance:

* 250 euros for journeys of up to 1,500 kilometres;

* 400 euros for flights between 1,500 and 3,500 kilometres;

* 600 euros for journeys of more than 3,500 kilometres.

In addition to financial compensation, airlines are required to provide assistance to passengers whilst they await an alternative solution. The measures provided for include meals and drinks, two free communications and, if necessary, hotel accommodation with transport to and from the airport.

If the airline does not provide assistance, the passenger may make their own arrangements and subsequently claim reimbursement of the costs incurred, keeping all documentation and receipts.

In the event of delays of more than five hours, passengers may cancel their journey and receive a full refund of the ticket price.

Flight cancellation

When a flight is cancelled, passengers may choose between a refund of the ticket price and alternative transport to their final destination under comparable conditions.

If the cancellation is notified less than 14 days before departure and no suitable alternative is offered, you may be entitled to compensation of up to 600 euros, depending on the distance of the journey.

Even a significant bringing forward of the departure time may be treated as a cancellation and entitle passengers to the same forms of protection provided for under the European Regulation.

Overbooking and denied boarding

In the event of overbooking, passengers with a confirmed booking who turn up on time for check-in are entitled to choose between a refund of their ticket and rebooking onto another flight. They may also be entitled to financial compensation of up to 600 euros, in addition to the assistance provided for under European legislation. The important thing, according to Flightright, the European passenger rights platform, advises that all documentation relating to expenses incurred should be kept and submitted.

If the alternative flight departs the following day, the airline must also provide overnight accommodation and transport to and from the hotel. The regulation also sets out in more detail the extraordinary circumstances that exempt airlines from paying compensation.

Hand luggage and price transparency

Among the most significant changes introduced by the reform are the rules on fare transparency. Airlines will be required to state the total cost of the journey more clearly, including the main ancillary services, such as those relating to cabin baggage.

The proposal to make hand luggage free of charge has, however, been shelved. The aim of the reform is rather to enable consumers to make an immediate and transparent comparison between the various offers available on the market.

A decision that has drawn criticism from low-cost airlines. The real concern, however, does not seem to be the loss of flexibility for passengers, but rather the possibility that they might be able to compare the actual cost of the journey more easily. A flight advertised at rock-bottom prices, in fact, once you add in hand luggage, seat selection and other ancillary services, could turn out to be much less value for money than the initial price suggests.

More support for families and people with disabilities

The new rules also stipulate that children under the age of 14 may sit next to an accompanying adult at no extra cost.

Protections for people with disabilities or reduced mobility, and for their carers, are also being strengthened, with the aim of making air travel more accessible and inclusive.

Finally, the practice of so-called ‘no-shows’ is to be brought to an end: airlines will no longer be able to automatically cancel a return flight if a passenger has not taken the outbound leg. This change, which consumer organisations have been calling for for some time, is set to have a tangible impact on travellers’ rights.