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The EC 261 flight compensation regulation establishes common rules on compensation and assistance to passengers in the event of denied boarding, flight cancellations, or long delays of flights. I read on https://thepointsguy.com/guide/guide-eu261-flight-compensation/:

Because airlines deal with a lot of claims, expect to wait as little as a few weeks or as much as a few months for the airline to respond to your claim in question.

Does the regulation on the EC 261 flight compensation set any deadline for airlines to pay the compensation?

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Yes, it's seven days in general:

Article 8 Right to reimbursement or re-routing

  1. Where reference is made to this Article, passengers shall be offered the choice between:

(a) - reimbursement within seven days, by the means provided for in Article 7(3), of the full cost of the ticket at the price at which it was bought, for the part or parts of the journey not made, and for the part or parts already made if the flight is no longer serving any purpose in relation to the passenger's original travel plan, together with, when relevant, [...]

And:

Article 10: Upgrading and downgrading

[...]

  1. If an operating air carrier places a passenger in a class lower than that for which the ticket was purchased, it shall within seven days, by the means provided for in Article 7(3), reimburse [...]

Source: https://eur-lex.europa.eu/legal-content/en/ALL/?uri=CELEX:32004R0261

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