Germany tops up holiday voucher fund with €840m

An empty beach near 'Ballermann 6' - a popular package holiday destination for Germans - Mallorca, Spain, 27 May 2008. [Photo: EPA/RONALD WITTEK]

German holidaymakers received a summer consolation prize on Friday (31 July) when the European Commission approved a government scheme aimed at helping travel operators guarantee replacement vouchers for cancelled trips.

Coronavirus lockdowns and quarantines have played havoc with the best laid summer plans of tourists and travellers, as flights were cancelled en masse and accommodation providers scaled back their business or even shut up shop indefinitely.

Airlines and package tour operators scrambled to offer their customers rebookings where possible or replacement vouchers, in order to avoid shelling out millions of euros in refunds for flights and hotel stays.

EU rules say that it is up to the consumer whether they accept a voucher, refund or rebooking and that they are entitled to whichever option they choose within two weeks of requesting one.

That has not stopped companies from flat out ignoring those rules or trying to make vouchers as attractive as possible, either by offering long validity periods or coupons worth more than the original value of the booking.

Germany got the go-ahead today to pump €840 million into a guarantee scheme designed to help tour operators cover voucher pledges for any holidays booked before 8 March. It is estimated that more than €6 billion worth of trips were still outstanding at that point.

According to the European Commission, operators will issue a total of €1.5 billion in coupons and the government programme will ensure that the vouchers can hold their value and be valid until 31 December 2021.

“The rights of consumers to be compensated for cancelled bookings must be ensured, even in these difficult times for the travel industry due to the coronavirus outbreak,” said Commission Vice President Margrethe Vestager, whose competition services signed off on the scheme.

The Danish official added that “the use of vouchers should be encouraged and travellers should be able to accept them without fear of losing their money.”

Consumer rights organisations have long called for state guarantees to prop up any voucher offers, while some MEPs have pushed for an EU level instrument to protect holidaymakers in case travel operators go bust after issuing coupons.

EU hits 10 countries with ‘voucher-gate’ legal action

The European Commission announced on Thursday (2 July) that it would launch an infringement procedure against ten EU member states that are in breach of the bloc’s passenger rights rules. Greece and Italy were hit with legal action twice.

Earlier in July, the EU executive launched legal action against 10 countries – Germany not included – over an alleged failure to stick to passenger rights legislation, by allowing travel companies to ignore or delay refund requests.

Croatia, the Czech Republic, Cyprus, Greece, France, Italy, Lithuania, Poland, Portugal and Slovakia were all accused of systematically allowing the bad practice and given until September to make the necessary legal changes or possibly face sanctions.

Greece and Italy were slapped with two infringement procedures, as their rules breached both the EU’s Package Travel Directive and legislation governing air, maritime and rail passenger rights.

Airlines in particular have championed the cause of the voucher, as the industry faces billions in euros in lost revenues due to the crisis and can ill afford to lose so much liquidity. Carriers like Air France and KLM have announced restructuring and job cuts despite government aid.

Dutch airline KLM says to shed up to 5,000 jobs due to virus

Dutch airline KLM said Friday (31 July) it would shed up to 5,000 jobs due to a “crisis of unprecedented magnitude” caused by the coronavirus pandemic.

[Edited by Zoran Radosavljevic]

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