Startup Digitizing the Claim Procedure for Flight Delays

Matthias Verbergt reported yesterday at The Wall Street Journal Online that, “A league of startup companies is industrializing the process of claiming compensation from airlines, helping stranded passengers turn the table on carriers and transforming delayed flights into a fast-growing stream of revenue.

“Launched in Denmark, AirHelp Ltd. offers to sift through your emails, check your booking information against effective takeoff and landing times for the past three years, and seek compensation you might not even know you were entitled to.

“The company promises to pick up all administrative and legal bills, and swiftly let customers know how much money they may collect—minus a cut of at least 25% it charges for fighting in their names.”

The Journal article noted that, “From lawyers to consumer-rights associations, compensation-claim intermediaries have been around for a long time but procedural costs typically exceeded potential rewards…[B]y digitizing the claim procedure, the likes of AirHelp, Flightright, EUclaim and Gate28 are transforming the business into a mass-service that could tilt the balance of power between airlines and passengers.

The business is rising exponentially. EUclaim says it has collected €58 million (about $64 million) since 2007, including more than €20 million this year alone. AirHelp says it recovered €57 million on behalf of 800,000 passengers in the first six months of the year, compared with €28 million for 400,000 passengers between its creation in 2013 and 2015.”

Yesterday’s Journal article added that, “Passenger rights got a boost in 2004, when the European Union spelled out payments airlines had to make for flight delays or cancellations. Such compensation kicks in as soon as delays exceed three hours and can run as high as €600 a flight, making the EU one of the most passenger-friendly skies when problems occur.

“Because non-EU carriers departing from the EU also are subject to the European compensation rule, claim companies actively are trying to reach plaintiffs not just in Europe but world-wide.”

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