Customers angered by KLM refusal to give cash refunds for tickets; EU to discuss the issue

With reporting by Byron Mühlberg and Jamie de Geir.

KLM has confirmed that they will not be issuing refunds for travelers who have booked flight tickets with a departure date prior to May 31, the airline told NL Times. This comes amid a spate of customer complaints against the airline from passengers who said their financial situations means they need the cash back for their cancelled flights, requests which they said have fallen on deaf ears at the airline's customer service department.

In place of a refund, passengers are being offered vouchers equal in value to the cost of the original ticket. The vouchers are valid for one year and can be used in exchange for future flights with KLM and its partners, including Air France, Delta Airlines or Virgin Atlantic. Alternatively, affected travelers can opt to adjust the date of their travels, or change their destination entirely, both free of charge.​

Vouchers which go unused may be exchanged for cash after the 12-month period runs out, the airline said.

"The current situation is so exceptional that KLM is therefore forced to deviate from the normal procedure," KLM said in a statement to NL Times. In light of the uncertainty around the global health crisis caused by Covid-19, issuing vouchers is a "fair solution" that "strikes a reasonable balance between protecting passenger rights and the reality in which all airlines now have to operate," the airline said.

Under European Union flight compensation laws, passengers of cancelled flights must be offered their choice of the earliest available re-routing using the same airports, re-routing at a later date to the same destination, or a refund.

"Our goal is not to deprive our passengers of their rights," the airline said. It also argued that the the law governing passenger compensation for cancelled flights never took into account the breadth and scope of the travel restrictions caused by the coronavirus pandemic. Because of that, the airline believes it found an appropriate compromise by offering more flexible vouchers than are required, and cash compensation if those vouchers are not spent.

"It’s not my place to help bail out KLM."

However, many customers believe that the vouchers are insufficient, and that KLM has not done an adequate job of communicating with its aggrieved customers. "I understand it is important to support companies during the crisis," said Eindhoven-based Susannah Letouze.

She spent 800 euros to fly to Washington D.C. last month, but fearing the contagious virus, and with countries racing to change their entry policies, she paid KLM an extra 100 euros to move the flight to May. That flight was later cancelled by the airline. She was offered KLM's voucher instead, and said the airline told her the conditions involved.

"I explained that it is not good enough. They pushed me to fill in a dispute via the website." she told NL Times. Since then, they have not replied to her concerns over using the voucher.

"It’s not my place to help bail out KLM," she said.

She said her travel insurance is also refusing coverage for flights cancelled as a result of the pandemic. "Overall not a good situation. I have travelled a lot with KLM and will never fly with them again."

According to James Sigsworth, a customer from the United Kingdom who had booked flights with KLM to the United States, the airline is legally obligated to refund him the cost of his canceled flight. "They owe me over 900 pounds. At first they didn’t answer my questions they just tried to blame the [travel agency I used], but after some pressure they admitted they aren’t refunding any money," Sigsworth said in response to questions from NL Times

"The vouchers they have offered are not enough to get me to my destination so they are useless. If I want the money I have to wait a year!"

His complaints were echoed by another passenger from the UK, Steve Richardson, who accused the airline of poor service. Richardson said he spent 1,750 pounds on two flights between Teesside International Airport and Saudi Arabia, and a holiday to Venice with his wife.

"The way KLM have dealt with the situation and communication is appalling," he said, pointing to "rude customer service reps hanging up the phone" and a "refusal to communicate other than through a copy and paste statement" as reasons for his disappointment.

He also said he flew six times annually on KLM, but will not do so in the future.

Europe to take on the issue next week

The airline said the Dutch Cabinet supports its position on the matter, and the relevant ministry did not entirely confirm this as accurate. While the government supports KLM's policy for vouchers, it also supports passengers being awarded the refunds they are owed. "That right remains, we are only appealing to travelers to accept a voucher, if possible," the Ministry of Infrastructure and Water Management said.

The government is however strongly encouraging that people accept the vouchers in place of an immediate refund because of the financial pressure the airline finds itself under. The Dutch state owns 14 percent of the parent company Air France-KLM, and has committed to a package of bail out loans for KLM in the billions.

"People are legally entitled to a refund if the airline cancels a flight and does not offer a replacement flight," the ministry told NL Times in a statement. However, due to the circumstances around Covid-19, the ministry wants people to accept the vouchers to prevent the airlines from a financial disaster that would ultimately prevent many other passengers from getting refunds and all passengers from making use of the airline's services.

"We are allowing the use of vouchers as a temporary emergency measure to prevent airlines from toppling over, and passengers losing their money," the ministry said. It said it understands the concerns people have about the possibility of accepting vouchers from an airline which goes into bankruptcy because of the crisis.

"In a European context, the Netherlands is committed to guaranteeing the vouchers and urges airlines to make provision for this via IATA," the ministry said in reference to the association which represents most of the world's airlines.

The ongoing situation is to be discussed during a video meeting between transport ministers and the European Commission late next week. KLM said that nine EU member states, including the Netherlands, supports at least a limited suspension of enforcement of the flight compensation laws.