Consumers' right to reimbursement by air carriers in times of pandemic

The aim of European legislation to allow a coordinated approach at Union level ends up being called into question when each Member State, regardless of the provisions of the Regulation, has a different practical and even counter-legal approach.

Since the Covid-19 pandemic has plagued the world, and in particular the European Union, air carriers have been grappling with an unprecedented crisis, with millions of consumers on scheduled trips anxiously awaiting the refund of their money.

From a strictly legislative point of view, the question would seem, in a normal context, quite clear.

Regulation (EC) No. 261/2004 of the European Parliament and of the Council, of 11 February, establishes, in the event of cancellation of the flight by the airline, consumers' right to full refund for their tickets, within 7 days, or re-routing to another flight, if possible. Excluding, however, in extraordinary circumstances (such as the present, in which the borders were even closed), as well as in cancellations with more than 14 days notice, the right to compensation.

Thus, reimbursement by means of a travel voucher would only be possible with the written agreement of the passenger.

A different situation, not provided for in the Regulation, is one in which passengers want to cancel a trip on their own initiative. This happened mainly in the beginning, when the borders were not yet closed, but there were already fears of contagion, and it is something that is expected to happen also in the coming months, in which even if flights resume, it is expected that many consumers adopt a cautious stance and prefer to postpone your travels. Reimbursement or not in these cases depends on the type of ticket purchased, as specified in the carrier's terms and conditions, even though most carriers, in this pandemic situation, have chosen to make the date change regime more flexible or offer vouchers for use future.

However, the current context is far from normal and European legislation was certainly not designed for an exceptional situation of a global pandemic, until recently unthinkable.

The financial viability of air carriers, which have extremely high fixed costs, is seriously at risk, despite the fact that the European Parliament has lifted requirements for airlines to carry out most of their scheduled services, so as not to lose their landing slots. ; and the European Commission has temporarily relaxed State aid rules, allowing greater support from Member States.

Member States that, in their majority (including Portugal), requested the European Commission not to temporarily apply the Regulation, with the aim of allowing airlines, in a legal and harmonized way, to issue canceled travel vouchers, instead of refunds contributing to its financial debacle, with an impact on the long-term competitiveness of European aviation.

However, the European Commission remains, so far, unmoved by the non-amendment of the law, claiming that consumer protection is untouchable, especially now that families are under increased financial pressure, so they cannot be compelled by States to support airlines .

However, this position of the Commission to maintain the ideals of consumer protection, even though it apparently benefits their interests, is manifestly insufficient and out of touch with reality, even in practice, harmful to those it tries to protect. The aim of European legislation to allow a coordinated approach at Union level ends up being called into question, when each Member State, regardless of the provisions of the Regulation, has a different practical and even practical approach violation of law.

In fact, if the Member States themselves do not support the application of the Regulation, and they are primarily responsible for compliance with European legislation, namely through the respective national aviation authorities, what results is that they end up closing the eyes or, in some cases, even allowing airlines to issue only vouchers, instead of refunds, leaving consumers with the option of resorting to the national judicial system, with possible recourse to European Courts.

The European Commission Recommendation issued on 13 May, on vouchers offered to passengers and travelers as an alternative to reimbursement, in addition to being late, is clearly insufficient. Without legislative changes to the Regulation and with non-cooperating Member States, it will be difficult to achieve harmonized action to respond to this problem.

Nevertheless, the Recommendation contains some interesting points to consider, stating that the focus of airline companies, in dialogue with consumer associations, should be to make vouchers more attractive, making consumers with greater financial availability to choose this mechanism in a voluntary, and guaranteeing others a greater probability of being able to exercise their right to an effective refund within a reasonable period (although we believe that the period will certainly be longer than the 7 days referred to in the Regulation, impossible to fulfill given the number of requests for refund).

Thus, the Recommendation states, for example, that vouchers: must have a minimum validity period of 12 months, after which the refund is due in 14 days, if the voucher is not redeemed (in whole or in part); be transparent about their conditions and associated rights; be issued on a durable medium; can be used as a form of payment on any new booking made before its expiration date; be transferable to another passenger at no additional cost; and have a higher value than the amount paid.

In parallel, and in order for consumers to have the necessary confidence to choose vouchers, in particular when there are well-founded fears of airline bankruptcy and the consequent failure of travelers to reimburse, the Commission states that vouchers must be protected against insolvency by the private sector. or public, but omits any reference to a possible guarantee fund at European level.

In this context, Member States can grant support, namely through the granting of aid de minimis, zero-rate loans and interest-rate subsidies, and even guarantee schemes that cover passengers' reimbursement requests in the event of carrier bankruptcy.

Undoubtedly, the Recommendation contains good ideas, which could, if applied, protect both consumers and airlines, and, ultimately, Member States themselves.

However, being Recommendations, they do not contain any legal implementation obligation, neither for carriers, nor for Member States, nor do they ensure a minimum level of coordination and harmonization of measures that allow mutual trust and respect for the European legislation that the situation requires.

Inevitably, each Member State will continue to have different ways of providing support to the transport sector and implementing its own voucher rules, resulting in clear discrimination and unequal treatment of European passengers.

As already warned by several Member States, the time has come for something more. States and borders may be closed, but the European Union should always remain open. Thus, a legislative change seems imperative, potentially through a Directive that respects the minimum core of consumer rights and allows its adaptation to each national reality. Let us wait.

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