MEPs enticed by lure of airline vouchers over refunds

Aircraft parked on an empty runway at Copenhagen Airport, Denmark, 25 March 2020. [Photo: EPA-EFE/MARTIN SYLVEST DENMARK OUT]

Updated with MEP comments

Members of the European Parliament are increasingly siding with the aviation industry’s plans, already backed by many EU countries, to reimburse passengers with vouchers instead of cash refunds. Their support may force the Commission to change the rules, which it has so far resisted.

Coronavirus lockdowns have devastated demand for air travel and plunged many airlines into a fight for financial survival. But passengers are also waging their own war against companies that refuse to refund them for cancelled flights.

According to EU law, airlines are able to offer clients a choice between vouchers and a cash refund but it is up to the passenger to decide which option to accept. Re-routing is not possible due to the virus outbreak’s global impact.

Air travel companies – backed by a large majority of EU governments, including France, Germany and Spain – are now exerting pressure on the European Commission to change the law on a temporary basis, so that vouchers can be legally offered to passengers.

Up to 20 member states backed a plan last week to waive the rules and attach strict criteria to travel coupons and MEPs are starting to side with that growing coalition.

Twelve countries demand passenger rights suspension

Twelve countries have asked the European Commission to suspend the law requiring airlines to offer passengers a full refund for cancelled flights, championing the idea of time-limited vouchers as an alternative.

According to lawmakers and Parliament sources contacted by EURACTIV, a majority is emerging in favour of changing the rules to favour vouchers and work is ongoing to build pressure on the Commission to act, which it has so far refused to do.

Czech MEP Dita Charanzová, who is the liberal Renew group’s coordinator on the consumer protection committee (IMCO), said that “it took us years to build up consumer rights in Europe, especially in relation to travel, and we should not shatter them now.”

Charanzová said that she believes vouchers should remain voluntary and that state aid packages should include obligations to honour reimbursement criteria but also pointed to the need to help the travel sector and suggested EU-wide criteria for vouchers if needed.

Those would include a six-month expiry date, insolvency protection, exemption for people that have lost their job during the crisis and a requirement that vouchers be worth more than the value of the original ticket.

The EPP’s Barbara Thaler, who helps coordinate work on the transport committee (TRAN), went further and said that “we believe that decisive action is necessary and a state-backed voucher solution seems to be the best compromise”.

Socialist and Democrat MEPs are more cautious about the idea of watering down rights rules and want to ensure that the waiver and the vouchers themselves are subject to a strict time limit.

The group has also backed a guarantee fund that would protect the coupons against company bankruptcies and distribute cash to passengers in dire need of financial assistance.

Brussels Airlines could be renationalised

Belgian flag-carrier Brussels Airlines could be brought into state-ownership in order to save it from bankruptcy, according to TV channel LN24, as coronavirus wreaks havoc on the aviation industry.

Opposition in the EU assembly still exists though, most notably from TRAN’s lead MEP, Green lawmaker Karima Delli, who has regularly insisted that “passengers must not be double-victims of the coronavirus”.

“The airlines must strictly comply with the EU rules and the EU guidelines,” she said, referring to a clarifying note published by the Commission back in March, which acknowledged that the pandemic counts legally as “exceptional circumstances”.

Latvian MEP Roberts Zīle, who coordinates the ECR group’s transport policy, told EURACTIV that “we are talking about taxpayer money in the end. The Greens and leftists aren’t in governments generally, so they do not know what is needed to support airlines.”

Petra De Sutter, Delli’s counterpart on IMCO and also a Green, actually signed a joint letter with EPP lawmaker Andreas Schwab on 8 April which called on the Commission to set criteria for vouchers.

“We need a fast procedure in order to ensure that vouchers instead of reimbursements for travellers can be made possible temporarily, until the COVID 19 crisis is over,” read the letter to Commissioner Didier Reynders.

The ball is now firmly in the EU executive’s court. Transport chief Adina Vălean has insisted that there is no support in the Parliament for a rule change but that stance now looks shaky at best.

Vălean and Czech Commissioner Věra Jourová have both touted the idea of “making vouchers more attractive to consumers” but Commission sources insist that a full waiver is still not on the agenda.

Last week, Executive Vice-President Margrethe Vestager told Euronews that “there are many passengers who would need the money. People may have lost their jobs, they may need money for medication, to pay their rent.”

MEPs are reportedly looking to build enough support to pen a resolution calling on Vălean to act, which in combination with the backing of a member state majority will be difficult for the EU executive to ignore.

Any law change would be subject to the normal legislative process, where the Commission issues a proposal and MEPs and member states agree their own positions, before meeting – virtually – in trilateral talks to broker a final text.

EU transport chief cautions against green strings for airline bailouts

European Commissioner for Transport Adina Vălean told EURACTIV in an interview that the coronavirus outbreak means it is the wrong time to condition state aid for airlines on green measures, but warned the industry to stick to its passenger rights obligations.

[Edited by Zoran Radosavljevic]

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