Airlines must refund customers for canceled flights: Europe
Consumers must be able to get their money back if the flight they booked was canceled due to the coronavirus, the European Commission said in a leaked document on how to resume tourism in the European Union this summer. With that statement, the European Commission is diametrically opposed to the Dutch Minister's plan to let airlines give consumers vouchers instead of a refund, NOS reports.
Minister Cora van Nieuwenhuizen of Infrastructure wants to prevent companies like KLM ending up in more financial trouble if customers all demand a refund. The airline's parent company, Air France-KLM, is on the hook for over three billion euros in ticketing revenue which was collected, but whose passengers were not able to travel. That matched the liabilities carried IAG, the parent of British Airways, Iberia, and Aer Lingus. Only Lufthansa carried a balance with a higher amount of refunds owed, 3.5 billion euros in total.
The Dutch Minister and at least 12 other EU countries came up with a plan not to further burden the travel organizations and asked that the law that regulates these refunds be suspended for the time being. The Dutch and French governments each own 14 percent of Air France-KLM, which posted its worst quarterly results in history to start 2020.
But the European Commission does not think this a good idea, because it affects consumers' rights. "It is especially in these times that it is important to preserve consumer rights," the Commission said. "Companies need to be supported in a different way. They can always request state aid or call on the European Investment Bank, which has additional credit options, especially for smaller companies."
Some longtime KLM passengers have been very vocal in their disappointment in the airline. Dutch consumer association Consumentenbond also said that KLM could potentially damage future economic prospects and extend the financial crisis by not providing refunds. The organization said that consumer confidence would continue to drop if the airline did not provide refunds.
Speaking to NL Times last month, the ministry also said it did not want to force passengers to take vouchers, but it did want to try and convince KLM customers to accept vouchers if their personal circumstances allow it. The airline plays a critical part in the Dutch economy, and employs over 35 thousand people, and if the airline fails, it will slash Schiphol flight operations by 40 percent.
The Amsterdam airport is responsible for about 68 thousand jobs. The airport's ownership is mainly held by the Dutch government, with Amsterdam holding a 20 percent. Groupe ADP, which owns the two main airports in Paris, holds an eight percent stake, and Rotterdam owns the remaining two percent.
Can European tourism begin again?
The European Commission also said that it wants to "make it possible for EU citizens to go on holiday", but a plan that will be presented on Wednesday has many holes. It is important that holiday makers have the freedom to travel through the EU, but the Member States themselves will have to decide whether it is safe enough. That should not lead to discrimination, the Commission said. If the coronavirus restrictions on the border are lifted, it can not be only for a neighboring country or region. "Everyone should be able to travel then."
But in this first phase, in which measures against the spread of the coronavirus are starting to be relaxed, Member States are allowed to operate selectively - as long as the regions they want to open for are at about the same stage with comparable measures and a similar degree of contamination. According to NOS, the European Commission decided to allow this based on advice from the European Center for Disease Prevention and Control.
The Commission also came up with some concrete proposals for restarting tourism in a safe way. For example, tourist buses must be arranged in such a way that one-way traffic is possible, with one entrance and one exit. Tables and benches must be removed from terminals. A clear policy on wearing masks must be established, And everything must be thoroughly and frequently cleaned. What the future in airplanes will look like is still under discussion.
European parliamentarian Vera Taks (PvdA) told NOS that she is pleased that the European Commission has a plan. "These are nice guidelines that can help to slowly unlock everything," she said. But she isn't sure whether it will work. "I am skeptical, you suddenly saw 27 different reactions at the outbreak of the virus. It is a good attempt, but we really have to wait to see whether it works. The Member States ultimately determine their policy themselves."
Tourism is an important source of income in the EU, accounting for some 10 percent of its income. Around 27 million EU residents make a living from tourism. If no tourism is possible this summer, mass unemployment looms.