The Irish no-frills airline, Ryanair, was coming under a lot of fire after saying on Wednesday it would only refund passengers expenses to the amount the passengers paid for their ticket.

Because the airline sells such cheap seats, some passengers may only have paid up to $10 for a seat. These same passengers have been stranded all over Europe for a number of days racking up hundreds of dollars in expenses.
However, this morning, Ryanair agreed to now pay all "reasonable expenses" to its passengers.

Under European regulations, if a flight is cancelled, passengers flying into or out of the EU with European airline carriers are entitled to a refund or have their flight re-routed.

The rules say if a passenger chooses to be re-routed then they are also entitled to accommodation and meals while they wait.

Headman in Ryanair, Michael O'Leary, called these regulations "flawed" and was only prepared to reimburse passengers the cost of their ticket to cover expenses.

However, after consumer groups, lawyers and the Irish Commission for Aviation Regulation said this was totally illegal, O'Leary backed down and agreed to pay the money.

O'Leary told the BBC on Thursday morning he had made a mistake.

"The events of the last seven days, under which Europe's airlines were prevented from flying by the closure of European airspace, highlight how absurd and discriminatory the EU261 regulations are towards Europe's airlines," he told BBC News.

"While competitor ferry, coach and train operators are obliged to reimburse passengers' reasonable expenses, this reimbursement is limited to the ticket price paid to those operators.

"Yet the airlines are required by regulation to meet potentially unlimited expenses, in circumstances where there has been a catastrophic closure of European airspace over the past seven days, as EU governments and regulators wrongly applied a blanket ban on flights over European airspace.

"We will continue to work through the European Low Fares Airlines Association (ELFAA) and other industry bodies to persuade the European Commission and the European Parliament to alter this regulation to put this reasonable limit on these reimbursement claims."

However O'Leary said he was no fool.

If passengers took advantage of the situation and booked into luxury hotels expecting their expenses to be paid, he said they have another thing coming.

"If it [a claim] is reasonable it will get reimbursed, if it is not reasonable it will not," he said.

O'Leary said so far the flight disruptions have cost his airline in the region of $50 million,


Takeover threat: Aer Lingus staff are being warned that failure to agree cost-cutting measures could lead to a takeover by Ryanair