Airlines got into difficult financial situation last year. Not only low-cost airlines have become insolvent but major airlines also suffer due to Covid lockdown restrictions. What can a passenger do who could not travel and did not receive a ticket refund?
Obviously, certain airlines were supported by government bailouts to survive. It can be a short-term solution, but it is important that these state aids should not be banned.
Passengers who could not travel last year due to the restrictions, they had troubles getting a ticket refund from almost each airline. Therefore, the European Commission made a recommendation in May 2020.
Under the Recommendation passengers have the choice to accept reimbursement of the full cost of the ticket either in cash or in the form of a voucher. In order to make vouchers more attractive, air carriers should issue vouchers with a higher value than the amount of any payment made for the ticket. It is also essential that the vouchers must have a longer validity period. This is very important 9 months after the Recommendation, as there are still travel restrictions due to the pandemic.
What can we do if the carrier become insolvent? This is a difficult question. First of all, we have to check if the Member State has a Fund to provide support to air carriers. If so, it is possible to file a claim against it. If not, the creditors should have the possibility to lodge their claims in insolvency proceedings. If it is a larger airline, it can be a member of any association providing a fund for these cases.
As most airlines are headquartered abroad, so the above procedures are not only complicated for an average passenger but they are more expensive than a claim for the refund. Therefore, it is always necessary to examine case by case if it is worth taking further legal action.
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Author: dr. Zsuzsanna Burján