Commission guidelines say passengers entitled to refunds

Vouchers have been a flashpoint for consumers since airlines began offering them as refunds for flights cancelled by government Covid-19 travel bans. Carriers such as Ryanair and Aer Lingus owner International Consolidated Airlines Group say many travellers prefer them. However consumers do not always agree.

It is easy to see the attraction for airlines: vouchers fulfil their obligations to refund passengers whose flights have been cancelled, while allowing them to preserve cash. This is critical at the moment, as airlines’ revenues have almost evaporated.

However many passengers want cash as they do not know when they will fly again. The European Commission stepped into this row on Wednesday when it issued guidelines designed to accelerate the end of travel bans.

Unlike the rest of the guidelines, which many dismissed as too vague to offer a realistic way out of the mess in which restrictions have left travel and tourism, the commission was more sure-footed when it came to vouchers. The bottom line is passengers are entitled to refunds, and if they do not want vouchers, they must get cash.

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Nevertheless, the commission does say that vouchers are acceptable and its note encourages airlines to make them as attractive to consumers as possible. There is one problem: if an airline goes out of business, it cannot honour vouchers, while its insolvency then leaves consumers with obvious problems with getting cash back instead.

Member states

The commission pushes this back on to member states. Governments can aid airlines facing problems as a result of travel bans to keep them afloat, or guarantee vouchers, compensating passengers directly if an airline goes out of business. So member states are the ultimate back stop, either by aiding airlines or by guaranteeing their liabilities to customers.

The only problem with this is that, as the pandemic drives up public health costs, and lockdowns push more people out of work, member states must soon face a cashflow crisis of their own. In those circumstances, it is difficult to imagine flight compensation being among any government’s priorities.