The coronavirus (“COVID-19”) outbreak has led to a public health emergency and unforeseen challenges for airline businesses.  With this in mind, please see below for a summary of major legal implications of COVID-19 on airline businesses. 

1.    Airline’s duty to prevent infection on board

In principle, the duty of airlines to prevent COVID-19 infection would not be different from such duty applicable to other infectious diseases.  Article 12(2) of the Infectious Disease Control and Prevention Act requires anyone who finds a suspected patient (i.e., a person suspected of being infected with the pathogen of an infectious disease, but not yet confirmed as being infected) to notify the public health center pursuant to guidelines of the public health authority.  Accordingly, if the airline fails to fulfil such notice obligation and, as a result, other employees or passengers are infected with COVID-19, the company may be exposed to legal liabilities and such liability issue would require a comprehensive review under Korean law as well as other international laws and regulations such as the ICAO regulations, Montreal Convention (for international flights) and WHO regulations. 

On February 24, 2020, the Ministry of Employment and Labor (the “MOEL”) published the COVID-19 Response Guidance for Businesses (the “MOEL Guidance”) for the business premises located in Korea (which would include airline’s local branch office and offices within the airport).  The key recommendations of the MOEL Guidance are as follows: 

• Businesses should continue to check on absent employees and thoroughly monitor the developments of the COVID-19 outbreaks among their workers (including subcontracted, dispatched and contract workers) who are suspected of COVID-19 infections or have COVID-19 symptoms. 
• If any of their workers has been infected with COVID-19, businesses should take prompt actions to properly isolate the confirmed patients and those subject to quarantine. 
• Health officers (including specialized health management agency) of the businesses should fully educate the employees about the MOEL Guidance and monitor their implementation status. 
• Businesses should designate a dedicated team or employees to continue and maintain business operations in case of a COVID-19 epidemic and prepare the response plans (including plans with respect to business partners).   

In particular, the MOEL Guidance requires service businesses such as airlines to prepare self-inspection and response plans and make hygiene products available on their business premises to encourage their employees who directly interact with customers to sanitize their hands and wear masks. 

Airlines’ full compliance with the MOEL Guidance may later be used as evidence indicating that they have taken appropriate measures to prevent the spread of COVID-19 and to protect their employees and passengers.  

2.    Airline’s right to deny boarding of COVID-19 suspected passengers

As of February 23, 2020, COVID-19 epidemic warning level in Korea has been raised from “warning” to “severe.”  Thus, in order to protect their passengers form the risk of COVID-19 infection, airlines need to consider denying boarding of the COVID-19 suspected passengers pursuant to reasonable standards. 

In relation to this, the key recommendations of the MOEL Guidance are as follows: 

• When a person is suspected of COVID-19 infection in the workplace, the company should check for the suspected patient’s symptoms, ask him/her to wear a mask, and immediately report it to the public health center or call the KCDC (Korea Centers for Disease Control and Prevention) Call Center (#1345).  After the suspected patient is transferred to the public health center, the company should implement disinfection measures on the business premises. 
• Workers who have been in contact with the suspected patient should not move outside of the business premises and wait in the designated isolation area at the workplace wearing personal protective equipment (e.g., mask, disposable gloves, etc.) until they are tested and studied by the public health authority. 
• If the company discovers a confirmed case of COVID-19 infection in the workplace, it should immediately inform all workers in the workplace of such fact. 

Since airlines generally have the grounds in their transport terms and conditions to reject certain passengers from boarding the aircraft, it would be advisable for airlines to cope with any claim made by a denied passenger based on such transport terms and conditions and the MOEL Guidance.  In particular, airlines should consider setting the protocols in advance with respect to the appropriate procedures to deny a passenger’s boarding and induce cooperation from such denied passenger. 

3.    Airline’s liability for failure to transport cargo or passengers

Under the Montreal Convention, airlines are strictly liable for any damage, loss or delay occurred in the course of transporting international cargo.  However, if there occurs a non-delivery due to a flight suspension caused by the COVID-19 outbreak, although there is no clear court decision or interpretation of law by the government authority on this point, airlines may reasonably argue that they should not be held liable because such non-delivery would not constitute damage, loss or delay of delivery of cargoes as contemplated under the Montreal Convention. 

Hence, if there is a case of non-delivery of cargoes due to flight suspension resulting from administrative measures such as travel ban and entry restrictions in connection with the COVID-19 spread, airlines should review arguments against potential liability claims.  During the course of such review, airlines should check whether the relevant transport contract and the related terms and conditions contain a force majeure clause and, if so, whether the COVID-19 outbreak would constitute a force majeure event under such clause.  

If the transport contract contains a force majeure clause and such clause covers outbreak of an infectious disease such as COVID-19 as a force majeure event, it would be advisable for airlines to send a cancellation notice to their customers clearly stating that outbreak of an infectious disease such as COVID-19 constitutes a force majeure event under the contract. 

However, if the transport contract does not have a force majeure clause or it is not clear whether the existing force majeure clause covers an infectious disease as a force majeure event, whether administrative measures such as entry restrictions and travel ban due to the COVID-19 outbreak would be deemed as a force majeure event would differ depending on the governing law.  Under Korean law, even if the relevant transport contract does not have a force majeure clause, it seems possible to argue that an airline should not be held liable for a default arising out of an event which was unforeseen and beyond control of the parties, but there is no court precedent where outbreak of an infectious disease was deemed as a force majeure event.  For your information, in the context of maritime transportation, the Supreme Court once held that, for a maritime transporter to be free of liability for a reason of force majeure, the condition of the sea should constitute a natural disaster which was unforeseen at the time of loading and it should have been impossible for the transporter to take necessary measures to prevent damages in advance.  Based on such Supreme Court precedent, it may be difficult to argue that the restrictive measures taken by the governments due to the COVID-19 outbreak would constitute a force majeure event if such event was foreseeable and it was possible for airlines to take appropriate measures in advance to prevent non-delivery cases. 

Considering the global outbreak of COVID-19 and the restrictive measures taken by the governments, the force majeure argument may be available to airlines but airlines should be prudent in making such argument and it should be reviewed on a case by case basis taking into account various applicable facts and circumstances as well as their implications. 

Meanwhile, regarding increasing number of refund requests by passengers due to the COVID-19 outbreak, the terms and conditions of air transportation contacts will be applicable as in other general refund cases and there is no international treaty applicable to refunds.  Non-operation of aircrafts due to entry restrictions and travel ban in connection with the COVID-19 outbreak may be deemed as a force majeure event and, in such case, both airlines and passengers may be held not liable—i.e., it appears to be likely that airline would not be held liable for the flight cancellation but at the same time would not be entitled to receive cancellation penalties from the passengers. 

On the other hand, if a passenger who travels to a country with no travel ban cancels his/her flight and requests refund due to a fear of pandemic COVID-19, there is no court precedent determining whether such fear would constitute a force majeure event and such case will be considered on a case by case basis considering the totality of facts and circumstances.