German Federal Court: No Compensation for IT Failures – What Airlines Need to Know

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A key precedent for the aviation industry: In two landmark decisions (January 15, 2019 – X ZR 15/18 & X ZR 85/18), the German Federal Court of Justice (Bundesgerichtshof) ruled that a prolonged system outage at an airport constitutes an extraordinary circumstance under Article 5(3) of EU Regulation 261/2004. Airlines are therefore not obliged to pay compensation if such a delay is caused by this type of external disruption.

This ruling adds an important layer to the interpretation of the term “extraordinary circumstances” – a central concept with high relevance for airlines, especially when operational disruptions are triggered by external infrastructure failures.

1. The Case at a Glance:

The case involved a full IT system failure at Terminal 7 of JFK Airport in New York. The outage lasted 13 hours and was caused by a strike at a telecommunications provider. As a result, the affected airline could only check in passengers manually and via remote coordination with staff in Washington, D.C. Several flights were delayed and connections missed.

Passengers filed for compensation under Article 7 of the Regulation (€600 each), but the claim was ultimately dismissed.

2. The Federal Court’s Ruling:

The German Federal Court of Justice confirmed the lower courts’ findings:

The IT system failure constituted an extraordinary circumstance that was beyond the airline’s control.
Responsibility for the operation and maintenance of airport infrastructure – including IT systems – lies with the airport operator, not the airline.
The airline had taken all reasonable measures to mitigate the effects of the disruption, including manual check-in procedures via alternative communication channels.

In addition, the Court clarified that alternative options suggested by the claimants – such as rebooking onto later connecting flights or arranging additional transport – were not relevant to the assessment of the delay of the initial flight segment, which was the basis for the compensation claim. The key legal question was whether the original delay could have been avoided if the airline had taken all reasonable measures. Since this was not the case, the airline was not liable for compensation under Article 7 of the Regulation.

3. Implications for Airlines:

This decision strengthens the position of carriers in cases involving infrastructure-related disruptions beyond their operational control.

However, it also sets out clear requirements for airlines when invoking extraordinary circumstances:

While the ruling adds a welcome layer of legal clarity, practical application remains challenging. Different courts across Europe continue to interpret “extraordinary circumstances” inconsistently – creating legal uncertainty and strategic complexity for carriers.

4. Our Assessment:

This ruling is a step in the right direction: Airlines should not be penalized for delays caused by events outside their operational control – such as airport IT infrastructure failures. Still, the lack of a clear, harmonized definition of “extraordinary circumstances” in EU law continues to create ambiguity.

Efforts to reform EU Regulation 261/2004 are therefore timely and necessary. A more precise legal framework would benefit not only carriers but also passengers and courts by reducing disputes and legal grey areas.

Our firm has been advising and representing airlines for years in all matters relating to EU Regulation 261/2004 – with legal precision, strategic insight, and a deep understanding of the operational realities of the aviation industry.