Today, the European Court of Justice published the judgment in Case C-385/23 Matkustaja vs. Finnair Oyj, in which the Court states that the occurrence of an unexpected and unprecedented technical failure affecting a new aircraft model recently put into service which results in the air carrier cancelling a flight is covered by the concept of ‘extraordinary circumstances’, within the meaning of that provision, where the manufacturer of that aircraft recognises, after that cancellation, that that failure was caused by a hidden design defect concerning all aircraft of the same type and impinging on flight safety.

• Main dispute and questions referred to preliminary ruling

The passenger A booked a flight with Finnair from Helsinki (Finland) to Bangkok (Thailand) scheduled for 25 March 2016. That flight was to be operated by an aircraft which had entered into service a little over five months earlier.

The fuel gauge of that aircraft experienced a technical failure during refuelling shortly before take-off. Taking the view that that failure fundamentally impinged on flight safety, Finnair cancelled the scheduled flight and did not operate the flight until the following day (26 March 2016), using a back-up aircraft. That flight reached its destination some 20 hours late.

Since the model of the aircraft initially earmarked for the flight was a recent one, the defect in question, which had not occurred before anywhere in the world, was unknown prior to that failure. Consequently, neither the aircraft manufacturer nor the aviation safety authority was aware of the defect prior to that incident and they had therefore been unable to report it.

Finnair immediately launched an investigation into the cause of the failure affecting the fuel gauge. Approximately 24 hours later, the failure was overcome by emptying the fuel tank and refilling it. The aircraft was then fit to fly again.

Since Finnair refused to pay the 600 EUR compensation, the passenger A brought an action before the District Court of Finland (käräjäoikeus). That court upheld A’s action, finding that the failure at issue in the main proceedings was indeed due to a design defect which was difficult to predict, but that that failure was inherent in the normal exercise of the activity of an air carrier.

Finnair decided to bring an appeal against that judgement before the Court of Appeal of Finland (hovioikeus), which stated that the failure affecting the fuel gauge had to be regarded as an ‘extraordinary circumstance’, since it was not inherent in the normal exercise of Finnair’s activity and since, by its nature or origin, it was beyond Finnair’s actual control.

Nonetheless, the passenger A brought an appeal before the Supreme Court of Finland (Korkein oikeus), which decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

(1)      Can an air carrier rely on extraordinary circumstances within the meaning of Article 5(3) of Regulation No 261/2004 on the ground that the aircraft manufacturer discovered the existence of a hidden design defect detrimental to flight safety and affecting the entire aircraft type, even though that discovery was not made until after the flight was delayed and cancelled?

(2)  If the first question is answered in the negative, and it falls to be examined whether the circumstances in question are the result of events which are inherent in the normal exercise of the activity of the air carrier concerned and are not beyond the actual control of that carrier on account of their nature or origin, is the case-law of the Court of Justice of the European Union on the premature failure of certain technical parts of an aircraft applicable in a case such as that here, in which, at the time when the flight was cancelled, neither the manufacturer nor the air carrier knew the nature of the defect in the new aircraft type at issue or how it could be rectified?

• Ruling of the Court of Justice

According to the Court of Justice, Article 5(3) of Regulation No 261/2004 must be interpreted as meaning that the occurrence of an unexpected and unprecedented technical failure affecting a new aircraft model recently put into service which results in the air carrier cancelling a flight is covered by the concept of ‘extraordinary circumstances’, within the meaning of that provision, where the manufacturer of that aircraft recognises, after that cancellation, that that failure was caused by a hidden design defect concerning all aircraft of the same type and impinging on flight safety.