Friday

14th Aug 2020

Coronavirus

EU Commission clash with countries over travel refund

  • Airlines and air travel could take up to five years to recover after the pandemic (Photo: andynash)

A clash is brewing between the EU Commission and some member states over EU rules that allow airline passengers to chose between a cash refund or vouchers if their flight is cancelled due to the coronavirus.

On Wednesday, a dozen member states argued, in a letter, for vouchers-only as a temporary move, which the EU commission says is against the existing rules.

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Belgium, Bulgaria, Cyprus, the Czech Republic, Greece, France, Ireland, Latvia, Malta, the Netherlands, Poland and Portugal have signed the joint letter saying that when the EU rules were drawn up, a global crisis such as the pandemic was not foreseen.

"[The EU rules'] obligation to reimburse cancelled tickets in cash, if the passenger so decides, places airlines in a difficult situation where they are facing a serious cash flow challenge," the countries argue.

"A temporary rule would be a solution for current cash flow constraints of airlines while preserving the competitiveness of European aviation," the dozen states' transport ministers argued, ahead of a videoconference with fellow ministers.

The 12 capitals say 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".

The EU refund policy also applies for package travel deals, and other transportation tickets.

Making 'vouchers' attractive

The commission, however, insists on sticking to EU rules, and instead urges companies to make vouchers more alluring - instead of forcing consumers to take them.

"Action to make vouchers more attractive to consumers can help to ease the pressure on operators while ensuring full respect of consumer rights," commission vie-president Vera Jourova said Wednesday.

Jourova added that travel restrictions should be lifted "as soon as possible avoiding any discrimination on grounds of nationality and taking into account epidemiological developments".

The commission will unveil recommendations on how to manage safe traveling during the pandemic on 13 May.

On Tuesday, transport commissioner Adina Valean urged member states to secure vouchers against insolvency, to make them more attractive and said there is "leeway" for companies to improve them.

"I have full understanding for those who paid for tickets that they were then unable to use, as incomes has been impacted, I fully understand why passengers have been requesting reimbursement in line with EU rules," she told MPEs on the transport committee.

"I do appreciate that this is a place for heavy financial burden on transport operators which I would like to support with the right means," she added.

"The European legal framework is clear, carriers have to offer passengers a choice between a re-routing and a reimbursement, […] airlines do have the option to offer vouchers instead of reimbursement only with the explicit agreement of passengers ," Valean stated.

BEUC, the Brussels-based umbrella organisation for consumer organisations, said on Wednesday that travel operators should not undermine consumer rights.

"Covid-19 is putting consumers under enormous financial strain. Their right to reimbursement for cancelled travel is more important than ever," BEUC director general Monique Goyens said in a statement.

"Consumers should not be forced by governments to pick up the bill to bail out the travel industry," she said, adding that solutions should protect both the travel industry and customer rights.

Meanwhile, European governments are struggling to contain the economic fallout of the coronavirus pandemic.

Air-France-KLM

The Dutch infrastructure minister Cora van Nieuwenhuizen informed MPs on Wednesday that, according to estimates, airline Air France-KLM has already issued €3bn in vouchers.

Recently, the Air-France-KLM group and Air France has secured €7bn aid from the French government recently and the Dutch government plans a €2-4bn aid for KLM. The French and Dutch governments each hold close to 14 percent of Air France-KLM.

The commission had already in March stepped in to ease costs for airlines, when it temporarily suspended rules that forced carriers to fly empty or lose their airport slots.

On Wednesday, planemaker Airbus chief executive, Guillaume Faury, warned that could take three to five years for passengers to be as willing to fly as before the crisis and that the aviation industry could take as long as five years to recover.

Tourism, which is responsible for 10 percent of the EU's GDP and provides 27m jobs in the bloc directly or indirectly, is suffering due to the lockdown and social distancing measures.

Jourova said Wednesday that the "tourism ecosystem" could lose at 50 percent of its turnover in 2020 and will be particularly hardly hit in southern Europe.

Germany's government commissioner for tourism, Thomas Bareiss, warned that it is unlikely that German tourists will travel to Spain or Greece in summer, Deutsche Welle reported, and will have to stay in their own region.

New rules coming for Europeans' summer travel

The commission will out forward guidelines for safe travel, as some member states and companies are already drawing up plans to restart tourism under the threat of the pandemic.

EU leaders back trillion-euro recovery plan

EU leaders agreed on the need for a fund to support the recovery of Europe's economy from the coronavirus pandemic, but disagreed on details. The commission will come with proposals tied to the new long-term EU budget.

Conflicting signs ahead of EU summer holiday 'roadmap'

France will not make a decision on holidays until early June - while Germany is warning against a "race to allow tourism first", and some smaller EU states, such as Greece, Denmark and Austria, are considering allowing foreign holidays.

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Opinion

Italy has a responsibility, too

Little wonder the leaders of Austria, Denmark, the Netherlands and Sweden are unwilling to sign off: they're not going to give money so the Italians can fund a tax cut in the middle of an economic crisis.

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