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7th Aug 2020

Coronavirus

EU commission sticks to cash refunds for cancelled trips

  • Cash refunds are legally binding - but about a dozen countries are hoping to waive that responsibility for their airlines, in favour of vouchers (Photo: Vladimir Kud)

The EU called on all member states on Wednesday (13 May) to stick to EU rules on passenger rights for booked journeys cancelled due to the coronavirus pandemic - but stayed away from starting legal proceedings against EU countries over the issue of cash refunds.

Transport commissioner Adina Valean said she, along with justice commissioner Didier Reynders, will write to all member states, reminding them to adhere to EU legislation guaranteeing the option of cash refunds to passengers' whose trips have been cancelled due to the ongoing restrictions.

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"Commission Reynders and I want to ensure that people's right to be reimbursed for their cancelled trips is respected," Valean said.

"Member states are primarily responsible for implementing EU legislation," she added.

Recently 15 member states asked the EU executive to temporarily suspend cash refund rules, and instead allow for a voucher-only option - as airlines have been bleeding revenues due to the pandemic.

Valean said that, for now, the commission is not starting so-called infringement procedures against member states which are not enforcing EU rules on passengers' rights.

"I really hope, because we are all in a crisis together, that very soon all these problems will be solved by member states. It is up to them to make the their companies apply the law. If this will not be the case, of course, we will have infringements, probably very soon," Valean said.

EU officials, however, said earlier that around a dozen member states are already in breach of EU rules regarding compensation to passengers.

There was confusion about the legal probes, as earlier on Wednesday, commission vice-president Margrethe Vestager said the proceedings have been launched - but later withdrew that.

Infringement procedures take years to conclude, so it would not mean immediate help for those who hope to receive cash reimbursements soon.

The commission on Wednesday published recommendations to EU countries on how to make vouchers more attractive for consumers.

These include having EU governments set up schemes protecting vouchers against insolvency, make the vouchers valid for any services the operator offers, increasing the time frame for vouchers to a minimum of one year, and making them transferable.

Cash refunds are also guaranteed by EU rules in case of package trips.

"The starting point is that EU consumers have a right to a cash refund if that is what the want. Full stop," Vestager said.

"Many companies have come under pressure. This liquidity crunch would be less severe if customers adopted vouchers instead of cash refunds," the Danish politician however noted.

Airlines have asked for over €30bn in state aid, over €12bn of which had been agreed, according to the Transport & Environment, an NGO campaigning for cleaner transport.

The commission said there has been an approximate 90 percent decrease in air traffic compared to a year ago.

The executive also pointed out that travel and tourism sectors in the bloc reported a reduction of bookings in the range of 60 percent to 90 percent compared to the same period last year.

The commission also warned that if "organisers or carriers become insolvent, there is a risk that many travellers and passengers would not receive any refund at all".

EU Commission clash with countries over travel refund

Twelve EU countries have asked the commission to temporarily suspend rules that require travel operators to provide cash refunds for cancelled trips. The commission argues consumers have to be protected - and that vouchers should be made more attractive.

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 to unveil summer holiday plans amid Schengen fears

The European Commission is set to announce a three-phase approach on Wednesday to gradually reopen internal borders. However, concerns over how the principle of free movement in the EU will be affected is growing - as countries announce different approaches.

Vestager hits back at Lufthansa bailout criticism

Commission vice-president in charge of competition Margarethe Vestager argued that companies getting large capital injections from the state during the corona crisis still have to offset their competitive advantage.

How the EU thinks summer holidays can be done

The EU commission has proposed measures aimed at resuming travel in the EU "in a responsible and coordinated way" - with different advice on transport, hotels, and cross-border trips.

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