Twelve European Union countries have asked to scrap the requirement for airlines to give cash refunds and allow them to issue their customers with travel vouchers instead. The request has been made in order to help airlines with their solvency.
Passengers travelling in the EU are protected by regulations which ensure that they are compensated if their flights are cancelled or delayed for an extended period of time.
The statute states:
If a flight is cancelled, passengers are automatically entitled to their choice of
- rerouting to the same destination at the earliest opportunity (under comparable conditions);
- later rerouting, at the passenger’s convenience, to the same destination under comparable conditions (subject to seat availability); or
- a refund of the ticket as well as a return flight to the point of first departure, when relevant.
Any ticket refund is the price paid for the flight(s) not used, plus the cost of flights already flown in cases where the cancellation has made those flights of no purpose.
As a result of the Coronavirus pandemic which has crippled the aviation sector, airlines are unable to offer the first and second options which is forcing them to issue refunds. This in turn is severely affeting their solvency and draining their cash reserves which is prompting some airlines such as Lufthansa and Air France to ask for state help.
In a statement French transport minister Jean-Baptiste Djebbari said, “I’m glad a very large majority of member states are supporting my request to authorize airlines and maritime groups to temporarily use vouchers when trips are canceled, to relieve their cash reserves while protecting passengers’ rights to a refund.”
Until now the European Commission has stood by the regulation saying that “airlines have the option to offer vouchers instead of reimbursement, but passengers must agree to these vouchers. The airlines must provide a refund instead of a voucher if the passenger requests it.”
However, despite this regulation being issued by the European Commission, it is enforced by member governments, and some of whom, such as the Netherlands, have now told airlines to ignore the refund regulation for the moment.