Refunds or vouchers

Emblem of the US Department of TransportationOn May 13, 2020 authorities at both sides of the Atlantic warn airlines for the second time in 2 months. The US Department of Transportation (DOT) tells carriers they must issue refunds to passengers whose flights have been canceled or significantly changed. In March and April the DOT received 25,000 complaints compared to a 2-months average of 3,000. Travelers complain in droves that their airlines only offer a voucher and no refund.

Voucher or refund

The European Commission issues on the same date a recommendation on vouchers and reimbursements for canceled transport services. The Commission refers to the EU regulation 261/2004. It stipulates that in the event of cancelation or a significant schedule change by the carrier passengers have a choice. The regulation mandates airline to offer them a refund or a voucher at the passenger’s liking.

European CommissionInterestingly, the Commission explicitly suggests airlines to make vouchers more attractive to passengers. In that case the chance they will agree on receiving a voucher is considerably higher. The Commission even teaches carriers on how to make vouchers more attractive.

Voucher of refund

1. The vouchers should have a minimum validity period of 12 months.

Voucher2. The passenger may not have redeemed the voucher after that period. In that case airlines should automatically reimburse the amount of the voucher at the latest 14 days after it expired. The same applies to the remaining amount in case of a previous partial redemption.

3. If passengers have booked through a travel agency or other intermediary they should be able to use the voucher for new bookings through the same travel agency or  intermediary.

4. Vouchers should be transferable to another passenger without any additional cost. This should also apply for package travel.

Money5. To make vouchers more attractive carriers could consider to issue vouchers with a higher value than the amount the passenger has paid. But the Commission fails to add that if the passenger later on applies for a refund it should be equal to the original amount the passenger has paid.

6. Vouchers should indicate their validity period and specify all the rights attached to them.

Member states

In addition, the Commission mentions supporting measures that member states may take. For example, they may decide to cover reimbursement claims of passengers following the bankruptcy of a carrier.

Related: Dutch government breaks law

Tags: voucher, refund, passenger rights

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