Meals, accommodation and refunds

If the flight departs from an EEA country, or if the flight is destined for an EEA country and the airline is registered in an EEA country, and a delay is anticipated of

• some 2 hours or more, for a flight of 1,500 km or less 
• some 3 hours or more, for longer flights within the EEA, and for other flights between 1,500-3,000 km long, or
• some 4 hours or more, for flights longer than 3,500 km outside the EEA

the airline should offer passengers meals and refreshments, hotel accommodation when needed (as well as transfers between airports), and facilities for making telephone calls or sending e-mails or faxes.

If there is a delay of 5 hours or more, the airline must also offer to refund the airline ticket (with a free flight to the passenger’s original point of departure, where applicable). Passengers who do not receive what they are entitled to should submit a written complaint to the airline as soon as possible.

Compensation

Passengers can incur various damages when a flight is delayed, including missing a connecting flight. Under Icelandic aviation law (which is founded on international agreements), the airline carrier is liable for damages and losses resulting from delays. The passenger may be able to make a claim for all damages and losses incurred.

Limits to claims.
Maximum compensation is SDR 4,150 (the Central Bank of Iceland determines the daily rate of exchange of the SDR against the Icelandic krona). However, limits to claims do not apply if the transport agent is proven to have caused the damage through serious negligence or intent. 

No liability.
The airline carrier is not liable for damages if it is proven to have taken reasonable measures to avoid the delay, or if it was not in its power to do so.