A Yes, I have heard of this before, and indeed have been involved in just such an event. To qualify for delay compensation under the European passengers’ rights rules, known as EC261, you need to arrive three hours late at your destination.
The crucial issue in deciding whether or not you is not what time you left, but what time the plane reached the gate at Madeira’s airport and the door was opened. If it was three hours or more after the scheduled arrival – i.e. at or after 1.05pm – then you could be entitled to €400 in compensation. If it was 1.04pm or earlier, then you have no such right. From Monarch’s response, I infer that the latter applies.
On many occasions it is possible for a plane to be delayed for three hours-plus, but arrive less than three hours late. Schedules are usually “padded”, i.e. with an extra 10 or 20 minutes added to allow for delays such as air-traffic control restrictions.
In addition pilots can fly faster than normal to make up time, and if it saves the airline owing every passenger €400 then it may well be a decision the captain takes.
I was on a delayed British Airways plane from Dublin to Heathrow that was three hours, 10 minutes late in leaving. But since that meant a take-off at midnight, the captain knew he would be cleared to land without a wait at Heathrow because there would be no other traffic at 1am. We arrived “only” two hours and 50 minutes late, and BA escaped the obligation to pay compensation.
