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Aviation

Airlines need to be held accountable for reimbursements

Unsplash Creative 0.0: Photo by T.H. Chia

Consumers are entitled to receive reimbursements, especially because of bailouts...

At the beginning of the COVID-19 pandemic, a number of EU member states were asking for changes to ticket cancellation policy rules, effectively exempting airlines from refunding their customers. As it stands, airlines have a week to fully refund their customers for cancelled flights. Additional compensation rules apply for long delays and other inconveniences. When consumers book flights, they anticipate these protections to be upheld.

Consumers who have purchased tickets at a precise moment in time did so under existing rules and regulations. The European Union cannot retroactively change these policies -- this is a rule of law issue above all else. Consumers should not be forced to pay for the poor bookmaking of airline companies. COVID-19 is undoubtedly a disaster for airline companies, but that doesn't mean that the obligation to refund consumers should be willed away by the stroke of a pen. It's also important to point out the incredible hypocrisy on the part of policymakers. 

EU policymakers spent most of 2019 lecturing consumers about flights, and are now rigging the rules of commerce for the benefit of airline companies. It is outrageous that airline companies are getting special treatment when hotel and event bookings are not. Retroactively changing the terms of a contract is a severe blow to consumer trust and consumer protection. This move decimates the consumer trust in existing and incoming protections entirely and puts a question mark of the actual authority of law-makers.

The refund mechanism has since been sped up by many airlines, but mostly because billions in bailouts have been transferred all throughout spring and summer. Some airlines are going to receive additional funds as lockdowns and travel restrictions continue. In that context, airlines also need to be held to their word when it comes to refund policies.

That said, compensation policies aren't what consumers need. Passengers can expect compensation for their flight cancellation, between €250 and €600 depending on the length of their route. This has been the reason for significant disputes and has proven to make neither companies nor passengers happy.

This compensation scheme is a government-mandated insurance policy, which increases the price of the ticket, despite passengers not wanting generalised insurances. How can I say that with confidence? It suffices to take a look at how many people conclude voluntary travel insurances upon checkout. The result of the compensation scheme has been long court battles, in which passengers rightfully demand the funds that they were promised. The procedures here are too costly for consumers to engage in them themselves, but resorting to large law firms leaves them with only a percentage of their expected compensation. While the policy sounds good in theory, it doesn't work in practice. Instead, private travel insurances give consumers better leeway to act. 

However, while compensation rules can be controversial (and do not apply in cases of natural disasters), it seems fair and just that passengers are reimbursed for flights they did not get to take. This is not an argument from a David vs. Goliath perspective of the big company vs. the small consumer, but rather from the principle of contract law -- i.e. rendering the service.

As I wrote in a letter to airline CEOs back in June:

"We want to be in the air with you as soon as possible, but please do your part and commit to the rule of law and don’t force us to bring you to court. Hundreds of millions of taxpayers across the world are already helping you through government bailouts. We do our part to advocate for fewer levies and taxes paid on airfares and against silly bans of domestic flights, like the ban being discussed in France right now. This will make the sector more competitive and will allow us, consumers, to fly more with you."