Coronavirus: European Commission poised to update refunds guidance

The European Commission is considering updating its guidance on airline refunds for cancelled flights, an issue of extreme concern to agents and tour operators.

Airline industry sources suggest the Commission is likely to temporarily modify the requirement under EC Regulation 261 on air passenger rights to refund consumers within seven days to allow the issue of credit notes or vouchers.

Carriers have been lobbying on the issue intensely in Brussels, with many airlines withholding refunds and substituting vouchers to conserve cash.

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However, while such a move would provide clarity on airline refunds it could lead consumers to seek payment refunds from credit cards, triggering chargebacks to agents or operators for cancelled flights.

A senior airlines source said: “The EC is looking at an urgent revision to 261 on vouchers.

“The law is the law, [but] different airlines are taking different interpretations [of the law] to get through this crisis.”

The source added: “It’s a minefield. The Package Travel Regulations and EC261 overlap but don’t say the same. Everyone acknowledges it’s difficult. A lot of consumers want a refund.”

The EC has already updated its guidance on March 18 to confirm that cancellations due to Covid-19 constitute ‘extraordinary circumstances”.

The CAA, which enforces the rules in the UK, likewise updated its guidance on March 23 noting: “It’s open to airlines to offer incentives to passengers to encourage them to fly at a later date, for example through providing vouchers of a higher value.”

A senior leisure industry source said: “The CAA is trying to get action by the airlines by consensus.”

Tim Alderslade, chief executive of Airlines UK which represents British Airways, easyJet, Ryanair and Norwegian Air, said: “Airlines are facing unprecedented challenges.

“They are complying with the guidelines but are facing a larger than usual volume of claims and are not able to bring in additional staff to deal with them.”

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