Irish budget carrier Ryanair was ordered by Europe's top court to compensate passengers delayed by a volcanic ash cloud in Iceland in a ruling that could expose other airlines to similar claims from disgruntled travellers.
European airspace was shut down for six days when the Eyjafjallajokull volcano erupted in April, 2010, affecting more than 10 million people and costing airlines $1.7-billion (U.S.).
The Luxembourg-based European Union Court of Justice (ECJ) ruled on Thursday that EU rules required airlines to compensate travellers for delays caused by unforeseen events.
"An air carrier must provide care to passengers whose flight has been cancelled due to extraordinary circumstances such as the closure of airspace following the eruption of the Eyjafjallajokull volcano," the court said.
"EU law does not provide for a temporal or monetary limitation on that obligation to provide care to passengers (accommodation, meals, refreshments)."
Europe's top no-frills airline was taken to court after refusing to compensate Denise McDonagh for €1,129 ($1,533 U.S.) she spent on meals, accommodation and transport when her flight was cancelled due to the volcanic ash cloud.
The Dublin court hearing her case sought advice from the ECJ.
Ryanair said the ruling has no retrospective impact as it has settled all ash-related claims, but warned travellers they would face higher costs in future.
"Today's decision will materially increase the cost of flying across Europe and consumer air fares will increase as airlines will be obliged to recover the cost of these claims from their customers," it said in a statement.