Passengers can claim compensation for flight delays that occurred up to six years ago, a court has ruled - meaning airlines face a possible bill of up to £4 billion.
Thomson Airways has warned that the cost of air travel could rise following the court judgement - the second in two weeks - which backs passenger rights over compensation for delays.
Three judges at the Court of Appeal today rejected a challenge by Thomson Airways against a county court decision to award James Dawson £1,488.73 for an eight-hour delay he experienced on a flight from Gatwick to the Dominican Republic in 2006 because of crew shortages caused by sickness.
The judges upheld an earlier ruling confirming that the time limit for bringing a compensation claim under European law is six years in England and Wales, not two years as argued by the airline.
The Which? consumer group said the ruling was "a victory for consumers" and brought clarity to issues around flight compensation.
But Thomson said the decision, if unchallenged, could have a significant impact on the industry, and "specifically upon the price that all air travellers would need to pay for their flights", saying it intended to seek an appeal.
"If unchallenged, this judgment could have a significant impact on the entire airline industry and specifically upon the price that all air travellers would need to pay for their flights.
"We therefore confirm that it is our intention to seek an appeal to the Supreme Court."
Mr Dawson, from Peterborough, claimed 600 Euros (£480) per person from the airline in 2012, which is payable as compensation for a flight of that length under EC regulations.
But Thomson refused to pay compensation because he did not make the claim within two years of the flight.
The airline argued that all delay claims for compensation were covered by the Montreal Convention, which limits claims to two years after an incident.
But the Court of Appeal ruled that the time limit for bringing a claim must be determined by each individual country in the European Union.
In England and Wales this means that travellers can make claims up to six years after their delay under the Limitation Act.
Rejecting Thomson's appeal, Lord Justice Moore-Bick said: "Although the amount involved is small, the principles to which it gives rise are of considerable importance to airlines and passengers alike."
He said that was why the judge in the Cambridge County Court who ruled in Mr Dawson's favour gave the airline permission to appeal "and directed that the appeal should be heard by this court".
Giving the court's reasons for the decision, Lord Justice Moore-Bick said that none of the criticisms raised about the legal regime constituted by previous legal rulings "seem to me to provide a sufficient justification for applying the Convention time bar to a claim of this kind".
After the ruling by Lord Justice Moore-Bick, Lord Justice Kitchin and Lord Justice Fulford, flight delay specialist lawyers said they estimated that today's decision "affects over 11 million passengers and is worth in excess of £4 billion to consumers".
Mr Dawson's solicitors, Bott & Co, based in Wilmslow, Cheshire, said the judgment meant that consumers had six years to bring a flight delay claim in England and Wales.
In a statement, the firm said it had "hundreds of litigated cases which have been stayed pending the outcome of the Dawson case, and thousands more ready to issue proceedings".
Which? executive director Richard Lloyd said: "This decision is a victory for consumers, and will bring some much-needed clarity to the confusing process of flight compensation.
"Airlines should now follow the Civil Aviation Authority's guidelines of a six-year limit for claims and stop trying to deny consumers' rights."
Mr Dawson's victory follows another Court of Appeal ruling last week in favour of a passenger over a flight delay.
Ronald Huzar, whose flight arrived 27 hours late, won a compensation fight with an airline which said the delay was caused by "extraordinary circumstances".
Mr Huzar said he was entitled to compensation under European Union regulations after suffering "no little inconvenience" when the flight from Malaga, Spain, to Manchester left a day late in October 2011.
But Jet2.com bosses claimed an exemption. They said the problem which caused the delay - a technical fault on an airliner - was unforeseeable and amounted to an "extraordinary circumstance".
Appeal judges, who described the case as being "of some importance to the airline passenger industry", ruled in Mr Huzar's favour after concluding that the "extraordinary circumstances defence" did not apply in his case.
One appeal judge listed terrorism, strikes, air traffic control problems and freak weather as events beyond the control of airlines.
David Bott, senior partner at Bott & Co, which also represented Mr Huzar, said after the latest ruling: "This has been a great week for air passengers' rights and we are delighted to have been involved in two huge victories for consumers.
"It has been superb to take these two issues to the Court of Appeal and clarify regulations that fundamentally affect hundreds of thousands of people on a yearly basis."
Mr Dawson said in a statement after the decision: "I am pleased with the outcome and relieved that nearly two years after I commenced action against Thomson Airways a conclusion has been reached."
The CAA said: "The judgment reaffirms the CAA's view that passengers can pursue compensation claims through the courts for flights from up to six years ago. However, the CAA generally advises passengers that do wish to claim compensation for a disrupted flight to lodge their claim as soon after the flight as possible.
"This means both the passenger and airline will be able to access the information about the flight they need more easily.
"Thomson has indicated it will seek permission to appeal the decision to the Supreme Court, so there may be further developments on this issue. Passengers should be aware that this might lead to a delay in airlines processing their claims."
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