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Airlines Pressing to Offer Vouchers Instead of Refunds Due to Covid-19

The International Air Transport Association (IATA) and Airlines for Europe (A4E) on Wednesday expressed dismay to the European Commission’s new guidelines on the application of the EU261 passenger rights regime.

According to an announcement by both bodies, the new guidelines are “disappointing and unhelpful”, falling far short of the “simple and temporary alleviation” airlines had requested for: flexibility to offer rebooking or vouchers in place of refunds to passengers due to the Covid-19 pandemic, which has led to travel bans and restrictions imposed by governments all over the world to curb the spread of the disease.

“The Commission specifically rejected that possibility,” the announcement said.

According to Rafael Schvartzman, IATA’s Regional Vice President for Europe, the Commission appears to considerably underestimate the crisis afflicting airlines in Europe.

“Faced with a cashflow catastrophe, many airlines can only offer vouchers in lieu of immediate cash refunds for cancelled flights. The Commission must accept that this solution – which many people would regard as reasonable in the current extraordinary circumstances – should be facilitated,” said Schvartzman, adding that the situation created by Covdid-19 is not a short-term issue. “Αir connectivity will not be back to normal for many months,” he stressed.

As underlined by the airline bodies, the new guidelines of the EU261 passenger rights regime show that airlines are potentially responsible for unlimited care to passengers who have been stranded as a result of government decisions to close borders.

“These guidelines unfortunately don’t provide the clarity that cash-strapped EU airlines need. Given the extraordinary circumstances and financial pressures our airlines are facing, if this is the Commission’s view—then an emergency amendment to Regulation 261 may be needed, and would be welcomed by the sector,” said Thomas Reynaert, Managing Director, Airlines for Europe (A4E).

The new guidelines of the EU261 passenger rights regime did however recognize that flight cancellations caused by externally-imposed measures (such as the flight bans) are to be considered as an “extraordinary circumstance”, which means that in most current cases compensation will not apply.

It is noted that travel agents and tour operators had also requested for flexibility to offer rebooking or vouchers in place of refunds due to the Covid-19 pandemic.

Over 185,000 passenger flights have been cancelled since the end of January in response to government travel restrictions.

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