New Analysis: EU Flight Compensation Rules Cut Flight Delays by 70%

 As the EU debates changes to Regulation EC261, airlines and passengers remain divided. The Council of the EU wants to raise the compensation threshold from 3 to 4 hours for most flights (and 6 hours for long-haul), arguing it would make the system fairer and cheaper. Passenger advocates warn it would weaken one of Europe’s strongest consumer protections.

To inform the debate, economists Dr. Hinnerk Gnutzmann and Dr. Piotr Spiewanowski analysed flight data from Europe, the US, and beyond. Their new report, commissioned for the Association of Passenger Rights Advocates (APRA), reveals findings that challenge the airlines’ narrative.

We’ve broken down the key findings — and they tell a very different story from what some airlines would have you believe.

EU261 is Crucial for Flight Delay Prevention

According to the analysis Air Passenger Rights at the Crossroads from October 2025, flights covered by EC261 are up to 70% less likely to experience long delays (over 3 hours) compared to the United States, where the DOT passenger protection doesn’t cover such cases.

On short-haul routes, the regulation has led to a 66% reduction in serious delays (meaning delays with more than 3 hours), and same-day cancellations are more than 20% lower in the EU than across the Atlantic. Overall, EU passengers are about 5% more likely to arrive on time, meaning millions of smoother journeys every year.

These improvements come at an exceptionally low cost.
The authors find that EC261 effectively gives airlines a choice: either invest in preventing disruptions or pay compensation. The data shows most choose prevention — because it’s cheaper. This reliability gain is achieved at a cost of no more than €1.73 per passenger, making EC261 one of the most efficient consumer protection mechanisms in the transport sector.

Passengers See Compensation as their Top Right

A key argument of the opposition is that passengers don't value compensation. According to airline organizations like Airlines for Europe and IATA, travellers prefer their right to care or re-routing/assistance.

“Most passengers would prefer to arrive ‘better late than never’ but the current thresholds (e.g. 3 hours for flights up to 1500km) encourage cancellations rather than schedule recovery”, IATA stated in their position.

But new data from the European Court of Auditors (ECA, 2018), quoted in the analysis, paints a different picture.

In an EU-wide survey of 10,350 passengers across ten countries, travelers were asked to select the three rights they consider most important when flying. The results were strikingly close:

• 41.7% chose the right to rerouting
  
  
• 39.6% chose the right to compensation
  
  
• 36.1% chose the right to care (meals, accommodation, etc.)
  
  

This means compensation is virtually as important to passengers as rerouting — and far from being a “secondary” right.

The authors of the report point out that the often-cited Steer (2020) study — used by the EU Council to justify its reform proposal — never actually surveyed passengers directly. It relied on interviews with “stakeholders,” mainly from the industry.

By contrast, the ECA’s survey represents what passengers actually think. 

EC261 Does Not Lead to More Cancellations

Another argument pushed by the Council of the EU is that EC261 supposedly “encourages airlines to cancel flights rather than operate them with long delays.” The new report finds no evidence of that.

The researchers compared same-day cancellation rates between Europe and the United States. Across 2023–2024 flight data, only 0.56% of intra-EU flights were cancelled on the same day, compared with 0.72% of domestic flights in the United States.

That’s a 20% lower cancellation rate in Europe, where EC261 applies.

SkyRefund’s data shows that even now, without the reform, most claims are related to delays — specifically for flights delayed by more than three hours, which account for around 60% of all cases.

If there was merit in this reasoning, the amount of passengers claiming compensation for cancelled flights would be higher than for delays.

The reason behind this is that the regulation is designed so that cancellations aren’t a cheaper option for airlines.

Under EC261, airlines must still:

• Pay compensation and provide care when flights are cancelled,
  
  
• Rebook passengers (often on nearly full flights, which is expensive)
  
  
• Absorb the loss of ticket and ancillary revenue from the cancelled service.
  
  

The models suggesting otherwise, such as in Steer (2020), which is used from Airlines for Europe, rely on unrealistic assumptions, like 90% load factors and still managing to reroute three-quarters of passengers within two hours.
They also ignore key costs like crew repositioning, lost revenue, and schedule disruption, says the analysis by the economists.

The authors stress that even if EC261’s compensation rules were hypothetically removed, the “cancellation is cheaper” outcome in those models would still appear — purely because of flawed inputs, not because of the regulation itself.

The Cost to Airlines is Not Huge

Airlines have long argued that EC261 is too costly to maintain, warning that the compensation scheme adds significant financial pressure and threatens ticket prices.

However, the new analysis suggests these concerns are largely overstated.

According to the study, the average expected cost of compensation under EC261 ranges from €0.53 to €1.61 per passenger, depending on the flight distance — a modest figure considering the clear improvements in punctuality and reliability.

These figures already include conservative assumptions: around 25% of long delays fall under “extraordinary circumstances”, so no compensation is owed, and up to 75% of eligible passengers actually file a claim. Even then, the overall financial impact remains modest, and is often lower than airlines’ marketing or distribution costs.

The researchers also compared EU-regulated routes with flights outside the EC261 framework. They found that the likelihood of a delay exceeding three hours is about three times higher on non-EU routes (1.96% vs. 0.64%).

This suggests that rather than being a burden, EC261 provides a strong incentive for airlines to prevent delays — a strategy that is both operationally efficient and financially sensible.

If airlines operating outside the EU were to cover such delays themselves, the estimated cost per passenger would be about €2.57, whereas under EC261 the average cost is only €0.84.

According to the authors, this reflects a clear “revealed preference” — airlines tend to invest in preventing delays because it’s simply more cost-effective than paying compensation afterwards.

What’s Next

In the coming months, the European Parliament, Council, and Commission will negotiate the final reform of EC261. The key question is whether the Council can push through higher delay thresholds or if Parliament will defend current passenger protections.

While most experts agree that the regulation could benefit from clearer language and updated compensation levels, its core principles remain widely supported. As Tsvetelina Botseva, Legal Counsel at SkyRefund, explains:

“Best of all, it gives one clear standard across Europe, building trust and pushing airlines to plan better, while still excusing them in truly unavoidable cases such as severe weather or airspace closures.”

Her words capture what the new analysis confirms: EC261 has proven effective, balanced, and fair — a framework that encourages better planning and punctuality while protecting passengers when things go wrong.

What Does SkyRefund Do?

 As a flight compensation company, member of the Association of Passenger Rights Advocates (APRA), SkyRefund closely follows every step of the reform process. We continue to advocate for greater transparency and fairness in passenger rights — because any change to EC261 should be based on evidence, not assumptions.

Our mission is to provide clear, accurate information about passenger rights and to help travellers worldwide understand their rights and easily claim compensation.