Airlines Disappointed with European Commission Guidelines on EU261

The International Air Transport Association (IATA) and Airlines for Europe (A4E), reacted with dismay to the European Commission’s new guidelines on the application of the EU261 passenger rights regime.

The new guidelines are disappointing and unhelpful, falling far short of the simple and temporary alleviation airlines had requested for:

1. Recognition that no compensation is due in the event of cancellations due to COVID-19;
2. A limitation on the extensive obligations to provide care and assistance in the event of cancellations due to COVID-19;
3. Flexibility to allow airlines to offer rebooking or vouchers in place of refunds in the event of cancellations due to the pandemic.

There was some limited help in the new guidelines. They recognized that cancellations caused by externally imposed measures (such as the flight bans) or because of the very low demand are to be considered as an extraordinary circumstance. This would mean that in most current cases compensation for cancellation will not apply.

However, on the limitations on providing care and assistance due to COVID-19, and particularly the flexibility on refunds or vouchers, the Commission’s response is inadequate. No flexibility on the limitation of obligations was offered during a period of crisis for the aviation industry. This means that airlines are potentially responsible for unlimited care to passengers who have been stranded as a result of government decisions to close borders. On the request for flexibility to offer rebooking or vouchers in place of refunds, the Commission specifically rejected that possibility.

“The Commission appears to considerably underestimate the crisis afflicting airlines in Europe. Faced with a cashflow catastrophe, many airlines can only offer vouchers in lieu of immediate cash refunds for cancelled flights. The Commission must accept that this solution – which many people would regard as reasonable in the current extraordinary circumstances – should be facilitated. The Commission needs to understand that fiddling at the edges will not keep airlines in any shape to get the economy moving again when the health crisis abates. This is not a short-term issue—air connectivity will not be back to normal for many months. And for some airlines, things will never be the same again,” said Rafael Schvartzman, IATA’s Regional Vice President for Europe.

“These guidelines unfortunately don’t provide the clarity that cash-strapped EU airlines need. Given the extraordinary circumstances and financial pressures our airlines are facing, if this is the Commission’s view—then an emergency amendment to Regulation 261 may be needed, and would be welcomed by the sector,” said Thomas Reynaert, Managing Director, Airlines for Europe (A4E). “In the meantime, we also expect member states in the European Council to come to an agreement on the review of the Regulation before the summer,” Reynaert added.