EU261 reform: Evolution, not revolution

A political agreement has been reached, but there is limited change for airlines.

After a decade of discussions on reforming Regulation (EC) No 261/2004 (EU261), the European Commission has announced that a political agreement has been reached on revised EU air passenger rights. Below is our summary of this very significant development and what it is likely to mean for airlines operating to, from and within the EU.

The (long) debate over air passenger rights

Reform of EU261 has been on the European agenda for many years. As we explained earlier this year in our lookahead for aviation law and regulation in 2026, appetite for reform has increased in recent months. While many in the industry have consistently argued that EU261 has swung the balance too far in favour of consumers, with unforeseen and far-reaching consequences for airlines and passengers, the direction of travel has largely pointed towards an increased regulatory burden on carriers.

In October 2025, the European Parliament Transport Committee adopted negotiating guidelines to cover potential revisions to the regulation. These were re-confirmed by a vote of the European Parliament in January 2026. The agreed guidelines covered not just the perennial issue of delay compensation but other hot topics as well, including the right of passengers to carry free cabin luggage.

As of 15 June 2026, the European Parliament and Council of the EU have at last reached a political agreement on reform of EU261. While the finer details of the agreement are not yet available, it is clear from the Commission’s announcement that airlines’ hopes for a more balanced package of regulations are likely to be frustrated.

The reform does not amount to a fundamental rewrite of EU261. In many respects, the changes represent a codification and clarification of existing case law and practice. The reforms also introduce more prescriptive requirements around claims handling, including obligations to acknowledge and respond to claims within defined timeframes.

What will change?

• Cabin luggage: Airlines will be required to include a standard cabin bag within the advertised base fare (in addition to a personal item), although it is expected that carriers may continue to offer discounted fares for passengers travelling with minimal baggage.
• Family seating: Airlines must seat an adult accompanying a child under the age of 14 in an adjacent seat without additional charge.
• Information rights: Airlines must inform passengers of their rights and how to claim compensation within 96 hours of the flight disruption.
• Accessibility: Disabled passengers and passengers with reduced mobility will benefit from increased (but unspecified) protections during disruption and in respect of mobility equipment.
• No show ban: Airlines will no longer be permitted to deny boarding to “no-shows” on the inbound leg of their journey.

In addition, the reform package will introduce a standardised list of “extraordinary circumstances”, aimed at providing greater clarity to passengers and airlines alike. This has been a contentious area throughout the life of EU261 and has been the subject of extensive litigation before both national courts and the CJEU. While greater certainty is to be welcomed, it remains to be seen whether the new list will be exhaustive or capable of evolution. It can, however, be assumed that it will not seek to row back on the established body of case law in this area.

What will stay the same?

Not everything is set to change under the reforms. The Commission has announced that the compensation thresholds and amounts of compensation payable under EU261 will remain as they are now. For delays of over 3 hours, these are currently as follows:

• Flights <1,500km - €250
• Flights between 1,500km and 3,500km - €400
• Flights >3,500km - €600

While news that the amounts of compensation will not increase is positive, this will be cold comfort for carriers disproportionately affected by the existing fixed compensation amounts. In many cases, these amounts may be many multiples of the price of the original ticket. The EU’s decision not to move towards a more equitable model (for example, a percentage based on the ticket price) is likely to be seen as another missed opportunity for improvement.

What does the reform mean for airlines and passengers?

At first glance, the package might appear to be good news for consumers.  It promises increased certainty and clarity over passenger protection rights and pricing, and it offers improved protections for PRMs. However, these “improvements” come at the expense of pricing flexibility, which has consistently been shown to be a high priority for European consumers, and the necessity of including cabin baggage within a ticket price may lead to higher air fares overall.

The increased costs of regulatory compliance arising from the changes are also likely to be significant and may have a seriously detrimental impact on the financial health of an industry that has been pushed to the brink by another “black swan” event in recent months. In those circumstances, it is inevitable that, ultimately, any increased costs will be borne by the consumer.

Another unintended consequence of the proposed reform may be increased delays. Some carriers already face constraints on the volume of cabin baggage that can be accommodated on board relative to the number of seats and, if passengers have a guaranteed right to bring carry-on luggage, those airlines may be required to transfer excess items to the hold. This is likely to increase turnaround times, causing delays and, again, increasing costs for airlines as a result of aircraft being on the tarmac for longer.

EU261 has fostered a significant flight claims culture in Europe with various claims management companies setting up shop to manage volume claims on behalf of consumers. This has in part has driven the high number of references made to the CJEU on aspects of the regulation, particularly in relation to ‘extraordinary circumstances’. While greater clarity may reduce some areas of dispute concerning flight claims, it is unlikely to eliminate litigation entirely. Instead, disputes may shift towards interpretation of the new list and compliance with procedural obligations. Airlines should not expect any material reduction in their EU261 case load.

What about airlines and passengers in the UK?

The European Commission has confirmed that the scope of EU261 will remain unchanged. The Regulation will continue to apply to all flights departing from the EU, as well as flights to the EU operated by EU carriers (including flights originating in the UK).

In theory, this development presents an opportunity for the UK to diverge from EU law, something that the UK Government has previously considered as part of the Department for Transport’s consultation on passenger rights reform in 2023. In practice, however, divergence is likely to be limited. Given the operational complexity of offering different regimes to EU and UK passengers, and given also that the majority of airlines operating in the UK also operate extensively within the EU, it is likely that the UK Government and UK-based airlines will align with the EU reforms in practice for the time being at least.

What happens next?

The formal wording of the revised regulation has not yet been published. Once the text appears in the Official Journal, the new rules will apply after a period of 12 months. At that point, we will have a much clearer idea of just how significant the reforms enacted by the EU will be.

This article was written by Chloe Challinor, Patrick Bettle and Beata Kolodziej.

If you would like any further information or advice on how the changes affect you or your organisation, please contact Chloe Challinor, Patrick Bettle or your usual contact in the Burges Salmon aviation team.