The Unification of Certain Rules Relating To International Carriage by Air 1929 (Warsaw Convention) and the Montreal Convention 1999 (Montreal Convention) govern liability for damage suffered by airline passengers, baggage and cargo.
As such, they have diminished the relevance of common law rules to most international carriage by air.
The Warsaw Convention was the first international code relating to liability of air carriers in respect of loss, injury and damage sustained in the course of, or arising out of, international carriage by air. As Lord Hope stated in Sidhu v British Airways Plc  A.C. 430 at 453 the Convention was intended to be “uniform and to be exclusive of any resort to the rules of domestic law”.
Successive amendments led to modified versions of the Warsaw Convention, which were consolidated in the Montreal Convention.
The Warsaw Convention and the Montreal Convention have the force of law in the United Kingdom in relation to any carriage to which they apply by virtue of s.1(1) of the Carriage by Air Act 1961, except in relation to Community carriers.
A Community carrier is an air carrier with a valid operating licence granted by an EU member state. The Montreal Convention governs the liability of Community carriers in respect of passengers and their baggage, irrespective of where the carriage began or ended (Regulation 2027/97 on air carrier liability in the event of accidents, as amended by Regulation 889/2002 amending Regulation 2027/97 on air carrier liability in the event of accidents (Text with EEA relevance).
Where the carriage is not performed by a Community carrier, which of the Conventions, if any, applies turns on the definition of “international carriage”. Although the wording of the definition varies, “international carriage” means any carriage in which, according to the agreement or contract between the parties, the place of departure and the place of destination, whether or not there is a break in the carriage or a transhipment, are situated either within the territories of two parties to the relevant Convention, or within the territory of a single party if there is an agreed stopping place within the territory of another state, even though that state is not a party. It is therefore necessary to identify the places of departure and destination (which, in the case of a return trip, will be the same), and to determine to which, if any, of the Conventions the state in which each of those places is situated is a party.
If none of the Conventions is applicable, the liability of the air carrier is governed by the common law. In cases of non-international carriage by air within the United Kingdom (save in relation to Community carriers), a modified form of the Montreal Convention applies by virtue of the Carriage by Air Acts (Application of Provisions) Order 2004/1899.
The Conventions do not purport to deal with all matters of international carriage by air but are exclusive on what they do cover. This is known as the “exclusivity principle”. As Lord Hope said of the Warsaw Convention in Sidhu v British Airways Plc  A.C. 430: “It was not designed to provide remedies against the carrier to enable all losses to be compensated. It was designed instead to define those situations in which compensation was to be available. So it set out the limits of liability and the conditions under which claims to establish that liability, if disputed, were to be made. A balance was struck, in the interests of certainty and uniformity. I can see no escape from the conclusion that, where the Convention has not provided a remedy, no remedy is available.”
The exclusivity principle also applies to the Montreal Convention, art.29 of which provides as follows: “In the carriage of passengers, baggage and cargo, any action for damages, however founded, whether under this Convention or in contract or in tort or otherwise, can only be brought subject to the conditions and such limits of liability as are set out in this Convention without prejudice to the question as to who are the persons who have the right to bring suit and what are their respective rights. In any such action, punitive, exemplary or any other non-compensatory damages shall not be recoverable.”
Nevertheless, even where one of the Conventions applies to a particular case of carriage, not all claims against the carrier will be governed by its conditions and limits. It is important to distinguish between the temporal and material scope of the exclusivity principle. The temporal scope stretches only so far. The Conventions regulate matters which arise well before a passenger even arrives at the embarkation airport, such as the issuing of tickets (art.3 of the Montreal Convention) and mandatory insurance (art.50). But it is not the case that if a carrier cancels a flight after issuing tickets or fails to insure itself in accordance with art.50 a claim for damages would be governed by the Montreal Convention. Such a claim would instead fall to be determined under common law rules.
The temporal question for the purposes of the exclusivity principle is whether the particular loss, damage, or injury which gives rise to a damages claim was sustained in the course of carriage by air or not. The precise temporal scope of “course of carriage by air” is always a fact-sensitive enquiry. Its scope will differ according to context. For example, in cases of death or personal injury, the period covered by art.17 of the Montreal Convention begins with embarkation, includes the entire period of physical presence on the aircraft and ends when disembarkation at the destination is complete. An injury which occurs prior to embarkation or after disembarkation is therefore governed by the common law, rather than the Montreal Convention.
The material scope of the exclusivity principle is much broader. It extends to any action for damages, whether the claim is brought under the contract of carriage, at common law or otherwise. However, the exclusivity principle does not preclude the Court from granting declaratory relief, or ordering an air carrier to pay fixed compensation under an EU Regulation (as opposed to damages assessed on an individual basis).
In Stott v Thomas Cook Tour Operators Ltd  UKSC 15;  2 W.L.R. 521, the Supreme Court held that a claim for damages arising out of discrimination was excluded by the Montreal Convention. There is no exception for fundamental rights.
In cases where the Warsaw or the Montreal Convention applies, the liability of the air carrier is governed by the conditions of, and limits to, liability set out in the relevant treaty.
Chapter III of the Montreal Convention is headed, “Liability of the carrier and the extent of compensation for damage”. Liability for death or bodily injury is dealt with in art.17.1. Loss of or damage to a passenger’s baggage is dealt with in arts 17.2 to 17.4. Loss of, or damage to, cargo are dealt with in art.18. Article 22 contains the limits of liability in relation to delay, baggage and cargo. The Montreal Convention also sets out rules on jurisdiction (art.33) and provides for a two-year limitation period (art.35). (See also Air carriers’ liability.)
European consumer legislation is also relevant to the liability of air carriers. Regulation (EC) No 261/2004 (“Regulation 261”) established common rules intended to reduce and compensate the trouble and inconvenience caused to passengers by flight cancellations and long delays. Article 3 provides that Regulation 261 applies:
” (1) To passengers departing from an airport located in the territory of a Member State to which the Treaty applies; and (2) To passengers departing from an airport located in a third country to an airport situated in the territory of a Member State to which the Treaty applies, unless they received benefits or compensation and were given assistance in that third country, if the operating air carrier of the flight concerned is a Community carrier. “
In cases of denied boarding, long delay and cancellation, passengers are entitled to specified care and assistance, including fixed compensation which varies according to the distance of the flight from EUR 250 to EUR 600 per passenger. Although art.6, entitled “Delay”, makes no reference to a right to compensation, the Court of Justice of the European Union (CJEU) has held that Regulation 261 must be interpreted as meaning that passengers whose flights are subject of a delay equal to or in excess of three hours may receive the same compensation as passengers whose flights are cancelled (Nelson v Deutsche Lufthansa AG (C-581/10)  1 All E.R. (Comm) 385 at 38).
A claim for compensation under Regulation 261 for delay to a flight might be thought to fall within the temporal and substantive scope of the Montreal Convention. However, in Nelson v Deutsche Lufthansa AG (C-581/10)  1 All E.R. (Comm) 385, the CJEU, reiterating the court’s reasoning in earlier cases beginning with R. (on the application of International Air Transport Association (IATA)) v Department of Transport (C-344/04)  E.C.R. I-403, held that the scheme established by Regulation 261 for standardised redress was a form of protection supplementary to, and not incompatible with, the Montreal Convention because it did not affect the right of a passenger to bring a claim for compensation for individual damage suffered by him or the limitations imposed by the Convention on the right to redress on an individual basis. In other words, the CJEU held that the Montreal Convention did not govern a claim for fixed compensation, as opposed to damages assessed on an individual basis.
There is little prospect of the CJEU departing from its judgment in Nelson, which is binding on English courts. It is no answer to a claim for fixed compensation under Regulation 261 that the conditions of the Montreal Convention have not been satisfied, because the compensation is not assessed on an individual basis.