13 European nations have formally asked the European Union to stop requiring refunds for cancelled flights. Will the EU finally cave in at the expense of consumers?
I’ve already written about how Germany has backed Lufthansa’s efforts to deny refunds in favor of future flight credit. Although not stated directly, it seems that Germany would rather have ticketholders and other interested parties bailout Lufthansa than taxpayers in general. Negotiations remain ongoing, but Lufthansa does not like the terms of the bailout deal, which carries government control and a high interest rate.
> Read More: Germany Backs Lufthansa Effort To Stop Issuing Refunds
12 More Nations Call On EU To Suspend Refunds Under EC 261/2004
12 other nations have now called on the European Commission to suspend “onerous” refund rules in light of changing events.
First, they make a foreseeability argument.
“When the wording of the regulation was conceived, the current global crisis and its impact on air travel could not have been foreseen.”
Second, they make a proportionality argument, stating that the EU has a greater goal to “preserve the structure of the European air traffic market beyond the current crisis.”
Finally, they make an economic argument, asserting that the use of vouchers instead of cash will “stimulate market recovery through flexibility of travel and enhancement of consumer trust in the long-term.”
<Forgive me while I pause to laugh about that last point…>
To that end, they propose the temporary suspension of cash refunds in lieu of vouchers. Vouchers can be converted to cash after the crisis if they remain unused. The nations, speaking on behalf of airlines, propose:
- transparent information to the passenger
- non-discrimination
- a common length of voucher validity
- maximum flexibility of use
- a clear right of reimbursement immediately at the end of validity in the event of non-use of vouchers
The 12 signatory nations include:
- Belgium
- Bulgaria
- Cyprus
- Czech Republic
- France
- Greece
- Ireland
- Latvia
- Malta
- the Netherlands
- Poland
- Portugal
You can read the full letter here.
Will the EU Budge?
Thus far, both the United States and European Union have refused to loosen refund rules for cancelled flights. Even so, it is up to individual nations to enforce this rule and many of the above nations are the refusing to do so at this time.
This latest letter is about averting a possible lawsuit between the European Commission and member nations over EU261/2004 compliance. Sadly, it looks like the EC may be ready to cave. A spokesperson noted, “This is a very sensitive topic and the subject of very thorough debate,” and added that talking are ongoing to find a “workable European solution”. That implies the current solution (airlines must refund) is no longer viewed as a solution.
CONCLUSION
Any potential policy change will not only effect Europeans, but customers worldwide. If you are waiting for a refund on your cancelled ticket, just be prepared to wait a little longer…and potentially quite a bit longer.
@ Matthew — There will be consequences. I guess the US airlines should be smiling right about now.
Agreed. 🙁
Typical socialist countries
The EU just makes it up as they go along. The law means nothing.
After reading IATA President post begging for an exception, I wrote this to him but he didn’t respond. Same argument stays for these countries
Dear IATA CEO
I find your post very selfish and entitled. Let me explain why.
First, you say many aviation jobs are at risk but have you ever thought of people who already lost their jobs and need even a small amount of money to get going? Maybe you never thought about those people, but the reality is that your industry is not alone. That is why I think your post is selfish. Your industry needs to give the money back because you didn’t provide the service, and the rule is clear on this. If someone lost a job and wants his/her ticket money back because this person is so desperate, do you think any airlines in the world would help them and return the non-refundable ticket in normal times? I don’t think so. Because they would say rule is rule, you bought a non-refundable ticket, so I can’t return the money because it is a rule you agreed. So how about abiding the rules when it comes to your own desperate time? Applying a favorable logic only to yourself but not to others makes you also very selfish and self-centered.
Second, you say all you need is time and you want flexibility. But you can buy time, and you can be flexible in order to solve this liquidity issue. But instead of asking yourselves and being flexible, you ask others to do something for you because you are in a trouble? That makes you entitled. if you want time, buy it! Instead of giving a voucher worth of the money spent on a ticket, you add an interest rate and incentivize the passengers with a high interest (give them 20% more for example). But you are saying you want an interest-free loan from struggling passengers. This makes you entitled. Instead of writing a letter to passengers to be more understanding, write a letter to your member airlines to buy time! You said the time will solve the issue, so now you have the solution. And you can make passengers to choose between refund or extra voucher. Desperate passengers will get a refund and the others will let you keep the money. if you don’t have enough money, just increase the mark-up for the voucher. This is called market solution that you actively use in your ticketing system.
You also said you want flexibility. Then you should also ask your airlines to be flexible. Your airline companies are famous for being so inflexible, so it is time to learn. When you offer a voucher, make them flexible. In the past, a voucher from airlines means that you cannot divide the voucher and use it in multiple transactions; it is “use-it-or-lose-it” type of vouchers. Also your airlines always offered vouchers with many restrictions so it is hard to use them, so many passengers are fed up with those vouchers, so no wonder why people do not like to get a voucher. Yes, so ask your airlines to be flexible, don’t ask random passengers who you screwed up so many times in the past. That is what I mean by entitled.
Currently, many airlines offer vouchers that are worth the same amount of the ticket price, with a tight expiration date (who knows whether we can fly in the next 6 months or even a year because of our economic situations but your airlines are offering max one year voucher). Also, airlines say you can change your ticket without a fee but passengers still need to pay the fare difference (except Turkish airline) but why not be flexible and give passengers the flexibility to use the ticket on any day they want for the same class of service? You want the money and time, right? So you can do it easily if you try hard. and be flexible but you don’t seem to want to do that.
Finally, many of your member airlines treated passengers badly, be it on air by dragging them out of their seat or refusing to give the compensation they deserve under EC261. You can check social media about airlines. You hardly find something nice. Maybe it is time to reflect on yourself as an industry, particularly when you need to ask for a favor. You create a hate and then want a sympathy from them? At least it doesn’t work for person to person relationship…Just my two cents.
I believe Italy also supports this policy change — of course, Italy owns a big, beautiful airline! 😉
My take is that the EC should stand by the law and force airlines to provide immediate refunds. That said, a voucher that turns into cash in a year wouldn’t be that bad for most people who would still ultimately get their money back.
Perhaps a possible compromise could be vouchers that are good for a year but you’re allowed to “cash out” the voucher after three months? After six months?
I’m not sure why they think they should even ask the EU. All countries have their own constitution and elected governments. They can go ahead if they like.
Surely the EU likes it when consulted on things like this but any decision is on nation state level, as it should be.
The EU won’t budge. They didn’t when the Eyjafjallajokull went off and stopped air travel throughout Europe and across the Atlantic for 3+ weeks.
I hope you are correct. Not that it really matters if most nations in the bloc stop enforcing the law.
But EU law is higher than national law in these areas, so even if national regulators are not enforcing surely a court case could be referred to the ECJ for an EU-wife binding judgement?
*wide
They can, but then you run into a crisis…what happens if a nation decides to ignore an ECJ ruling?
Nations can but courts won’t and cannot.
I know they shouldn’t, but what if the Bundesverfassungsgericht decides EC261/2004 is disproportional under the circumstances?
(That said, I don’t think they would go down that path)
If an airline CEO buys something online and it never arrives due to unforeseen circumstances, will they be happy to take a credit note from that same online store instead of a refund? Unlikely. And if that same item is probably going to double in price in future, so the voucher will only cover half the cost? Definitely not. How is this situation any different??