KLM fined €40,000 for not refunding tickets bought through bankrupt agency

The Human Environment and Transport Inspectorate (ILT) fined KLM 40,000 euros for failing to refund canceled tickets. If KLM does not rectify the situation, the fine can increase to a total of 500,000 euros. 

The ILT also fined Cathay Airways and Singapore Airlines 11,800 and 22,400 euros respectively. According to the Inspectorate, the airlines did not refund passengers who booked canceled tickets through the now-bankrupt D-Reizen. They refuse to do so because the airlines previously paid refunds to D-Reizen. Under the European Passenger Rights Regulation, passengers are entitled to a refund or rebooking if airlines cancel a flight even if they bought the ticket through a travel agent or intermediary. 

This concerns passengers who booked via D-Reizen between 2019 and 2021. The companies previously said they have refunded the ticket money to D-Reizen and thus have fulfilled their obligations. However, the travel agency went bankrupt before transferring the money to the victims.

According to the ILT, KLM must directly offer passengers who booked through intermediaries the choice between a refund within seven days or a rebooking. The company must adjust its website to that effect and stop referring back to the travel agent. KLM has one month to comply and must inform the ILT weekly about the progress. Every time the ILT establishes that KLM is not complying, it will get another fine up to a maximum of half a million euros.

The ILT already said in December that it would fine companies on this matter, but it did not say how high the fines would be.

In a response, KLM again said that it had refunded the tickets. According to KLM, if travelers choose to book through an intermediary, it takes on certain tasks, such as applying for and processing refunds. In the case of D-Reizen, KLM also said that it had already transferred the money to the company months before its bankruptcy.

The airline, therefore, appealed against the fine imposed by the ILT.