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European Parliament Approves Sweeping Overhaul Of Air Passenger Rights

The European Parliament has backed a major overhaul of EU air passenger rights, approving new rules that strengthen compensation, speed up refunds and improve transparency around airline pricing and claims.

Lawmakers approved the revised framework on Tuesday by 646 votes to 12, with three abstentions. The legislation updates passenger rights first introduced in 2004 and aims to address long-standing gaps between passenger protections and airline obligations.

Clearer Rules For Delays And Cancellations

Passengers will continue to be entitled to a refund or re-routing if their flight is cancelled, while compensation will remain available for delays exceeding three hours or cases of denied boarding.

Compensation will continue to depend on flight distance:

  • €250 for flights of up to 1,500 kilometres;
  • €400 for EU flights over 1,500 kilometres and other flights between 1,500 and 3,500 kilometres;
  • €600 for longer-haul flights.

Airlines will be allowed to reduce compensation by 50% on long-haul journeys if they provide alternative transport that limits the arrival delay to no more than four hours.

Exemptions will apply only in extraordinary circumstances beyond an airline’s control, such as severe weather, natural disasters, armed conflict, unruly passengers or strikes affecting airports or air traffic services.

Faster Refunds And Better Assistance

Even when disruption is caused by extraordinary circumstances, airlines will still be required to provide meals, refreshments and, where necessary, accommodation for up to three nights.

Passengers choosing a refund instead of re-routing will benefit from a simplified process. Airlines must provide clear instructions on how to claim within four days after the journey ends, while refunds or compensation decisions must be issued within 30 days. Travellers will have up to nine months to submit a claim.

Greater Transparency For Travellers

The revised rules introduce several consumer-friendly changes aimed at improving transparency during the booking process.

Passengers will be able to use the return leg of a ticket even if they did not travel on the outbound flight. A small personal item will remain free of charge, while airlines will be required to display all mandatory charges, including cabin baggage fees, from the start of the booking process.

The legislation also bans fees for correcting spelling mistakes in passengers’ names and requires airlines to provide digital boarding passes without forcing customers to create an account or download a dedicated app.

New Protections For Families

The package also expands protections for passengers with disabilities or reduced mobility. Travellers who miss a flight because airport assistance failed will remain entitled to compensation and re-routing.

Children under 14 must be seated next to the accompanying adult at no additional cost. The same protection will apply to pregnant women and passengers with reduced mobility.

Virginijus Sinkevičius, vice-chair of Parliament’s Committee on Transport and Tourism, said the reforms preserve existing passenger rights while extending protections to groups that need them most.

Rapporteur Andrey Novakov described the vote as the end of more than 13 years of negotiations, saying the new rules would provide greater legal certainty for both passengers and airlines.

Next Steps

The legislation must now receive formal approval from the Council before becoming law. Once published in the Official Journal of the European Union, it will enter into force 20 days later, with member states and airlines given one year to implement the new rules.

Mercedes-Benz Posts Higher Profit Despite China Slowdown

Mercedes-Benz reported stronger-than-expected second-quarter results, lifting its shares on Tuesday despite mounting pressure from Chinese automakers and a weaker outlook for sales and revenue.

The earnings provided a boost for Europe’s auto sector, where manufacturers continue to grapple with tariffs, softer demand and intensifying competition from Chinese rivals. Volkswagen, Mercedes-Benz and BMW have all accelerated restructuring efforts in response.

Cost Discipline Lifts Quarterly Profit

Mercedes-Benz shares rose as much as 5.9% following the results before trimming gains to trade 3.5% higher by 1118 GMT. The company reaffirmed its profit margin guidance for its core passenger car business after reporting an adjusted return on sales of 4.0% for the second quarter, above market expectations and within its 3% to 5% target range.

“In an environment where some automakers are ringing alarm bells on their competitive positioning, Mercedes delivered a clear and confident message,” Morningstar analyst Rella Suskin said.

Second-quarter operating profit increased 22% to €1.5 billion ($1.7 billion), despite a 3% decline in revenue. Lower administrative and research and development costs, together with strong performances from the financial services and vans divisions, supported earnings, while the results also included a €131 million gain related to the planned sale of leasing subsidiary Athlon.

China Remains The Key Pressure Point

Despite stronger profitability, Mercedes continues to face a challenging market environment. Sales in China fell 30% during the second quarter, prompting the company to abandon earlier expectations for stable car sales and group revenue. It now expects both to decline slightly from a year earlier.

BMW also lowered its outlook in June following a deeper-than-expected slowdown in China, highlighting the pressure facing Germany’s premium carmakers. At the same time, Mercedes said Chinese manufacturers are increasingly expanding into European markets, although Chief Executive Ola Kaellenius said their focus remains on higher-volume segments rather than the premium market.

“But that is not a reason to sit back and be relaxed,” he said.

Manufacturing Shift Continues

Mercedes is also reshaping its manufacturing footprint. The company said its German factories will undergo a more aggressive push toward leaner production, although it declined to provide further details while talks with labour representatives continue. Production is also being expanded in lower-cost Eastern European locations, including Hungary, where the company is increasing capacity at its Kecskemet plant, as well as in Poland.

Chief Financial Officer Harald Wilhelm said the full-year margin for the passenger car division is expected to come in at the lower end of the company’s guidance range, reflecting a higher share of electric vehicle sales in Europe, which remain more expensive to produce and continue to weigh on profitability.

“We must continue to work flat out to reduce costs so that we can remain competitive on the prices of our products,” Kaellenius said.

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