One of the measures that the Maltese Government took when the coronavirus pandemic hit Malta and the first cases were registered, was to stop commercial flights in order to limit the importation of the virus. As a result, all prospective travellers had their flights cancelled and all the airlines were faced with a difficult situation – on the one hand respecting EU laws on consumer rights which, include the right of the passenger to request a cash refund or a voucher, and on the other hand trying to remain financially afloat considering the huge losses envisaged.
Cancelled flights – European Airlines seek exemption from refunding airfares
Twelve Member States, including Malta, recently signed a joint letter asking the European Commission to exempt airlines from giving a cash refund and to temporarily allow passengers only the right to ask for a voucher, arguing that when these rules were drawn up, a global crisis such as the Covid-19 pandemic was not foreseen. Such a provisional measure would alleviate the serious cash-flow problems that the industry is currently facing.
Regulation EC (No) 261/2004 states that passengers are entitled to reimbursement within seven days of the full cost of the ticket at the price at which it was bought, for the part of 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.
The 12 Member States said that these temporary rules on vouchers would be acceptable for customers if there is transparent information, non-discrimination, a common length for voucher validity, maximum flexibility of use and a clear right of reimbursement immediately at the end of validity in the event of non-use of vouchers. They also called for passengers issued with vouchers to be protected against the risk of bankruptcy of airlines issuing these vouchers.
The European Commission however does not want to give any exemptions and is instead urging airlines to make vouchers more attractive to consumers so that given a choice, they would not insist on payment in cash. It is also envisaging that travel restrictions will be lifted shortly and in fact on 13 May 2020 it will publish recommendations on how to manage safe travelling during the pandemic.
Although airlines have suffered massively, consumers are also under an enormous financial strain considering that many have lost their jobs or had to endure pay-cuts. The European Commission in March had sought to ease the burden on airlines by temporarily suspending rules that force carriers to fly empty or lose their airport slots. Moreover, although the EU generally prohibits national governments from providing financial aid to homegrown companies since this distorts competition within the single market, rules have been loosened due to the corona virus situation. Therefore, it is important for consumers to be protected and not go back in time after the effort put into having a strong mechanism of protection in place.