European airline passenger rights, which include carriers’ legal obligation to pay refunds for cancelled flights, have not been safeguarded during the COVID-19 pandemic, according to an EU report released on Tuesday (29 June).
The European Court of Auditors (ECA) found that in virtually all cases airlines were able to sidestep rules requiring a cash refund for cancelled flights and offer customers vouchers for future journeys instead.
The ECA, which looks after the interests of citizens in the EU’s 27 member states but does not have legal powers, said travel restrictions led to 7,000 air routes being closed in the European airport network after the pandemic began last year.
Flight cancellations affected tens of millions of passengers across the bloc between March 2020 and March 2021, the ECA said.
“We found that air passengers were not informed fully about their rights during the COVID-19 crisis,” the ECA report said, adding air passenger rights were “not protected” during the crisis despite efforts deployed by the European Commission.
Legal obligation for refunds
EU law grants consumers immediate cash refunds for cancelled flights, plus compensation for those scrapped with less than two weeks’ notice or for delays of over three hours.
But the auditors found that 15 EU member states adopted exceptional measures to release airlines and package-tour operators from their legal obligation for refunds – a move that auditors say goes against EU law.
Passengers were also treated differently depending on the member state they were in and the airline they were dealing with, contrary to the spirit of the EU, according to the ECA.
“While every effort has been made to support airlines and package-tour operators, far too little has been done to secure the rights of millions of people in the EU,” said Annemie Turtelboom, the ECA member responsible for the report.
The report found that only 14% of passengers faced with cancellations were aware of their rights. The auditors recommended that a campaign to better inform travellers be undertaken across the bloc.
European airlines have called for passenger compensation rights to be weakened, saying they are facing billions of euros in reimbursement because so many flights were cancelled due to the pandemic.
EU countries did not explicitly make support to airlines and tour operators conditional on passenger reimbursements during the pandemic, even though the EU executive said they could do so.
The auditors said that in total EU governments paid out almost €35 billion between March 2020 and April 2021 to protect airlines from bankruptcy, with airlines including Air France, KLM, and Lufthansa receiving billions in government bailouts.
The airline industry called the recommendations made by the EU auditors “disproportionate”, arguing that the report fails to take into account the unprecedented situation faced by the industry.
“The fastest collapse in passenger demand in history meant it was impossible for airlines to comply with passenger rights rules which had never been designed for such a crisis,” wrote Rafael Schvartzman, the regional vice president for Europe of airline trade association IATA, in a blog post.
Schvartzman criticised the European Commission’s refusal to amend the European passenger rights regulation at the outset of the COVID crisis, saying it fell to member states to provide the necessary “flexibility” under the existing rules to stabilise the industry.
IATA pushed back against the ECA’s calls for further regulation. While acknowledging that the crisis was handled imperfectly, the airline association argued that competition between airlines is the best means to improve services for customers.
“[Competition] is ultimately the best way to ensure consumers receive improved quality and benefits, not via heavy-handed, disproportionate regulation that adds cost and reduces choice,” wrote Schvartzman.
[Edited by Frédéric Simon]