According to the European Commission, airlines must refund money to their customers for any flights cancelled due to coronavirus, rather than give vouchers. This was stated by the EC in a leaked document about resuming tourism in the European Union this summer, reported by NOS.
Airlines have been allowed to give vouchers instead of refunds
The Dutch Minister for Infrastructure Cora van Nieuwenhuizen wants to prevent companies like KLM falling into even deeper financial trouble as a result of airlines giving customer refunds. The minister, together with approximately 12 other EU countries, came up with a plan to prevent putting an even bigger burden on airlines, by letting them give vouchers instead of refunds. They requested that the law that regulates customer refunds be suspended for the present.
KLM’s parent company, KLM-Air France would have to pay out 3 million euros if all their customers were to be granted their money back. The same figure applies to IAG, the parent company of Iberia, Aer Lingus and British Airlines. Lufthansa is in an even worse-off position – the German airline would need to pay 3,5 million if all refunds were to be paid back to customers.
The Dutch government and the French government each own 14 percent of KLM-Air France and the airline has just had its worst financial quarter in the history of the company's existence.
"It is important to preserve consumer rights"
The European Commission is opposed to Cora van Nieuwenhuizen’s policy of letting airlines give vouchers, as it is damaging to consumer confidence. "Especially in these times, 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."
Consumentenbond, the Dutch consumer association, said that KLM could damage future economic prospects and extend the crisis by not giving refunds to its customers. Consumer confidence would continually decline and bring the airline into an even worse economic state, according to Consumentenbond.