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Coronavirus flight cancellations: Can passengers claim compensation?
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In the case of cancelling a flight, airlines have to offer the choice between reimbursement and re-routing. However, the numerous cancellations entailed by the COVID-19 pandemic have led to an unsustainable cash-flow situation for the travel sectors, and in some cases, companies have not yet received reimbursement of prepaid services. Thus, the immediate refund of the full price can cause serious financial problems for the airlines.
The COVID-19 pandemic has resulted in numerous travel bans, warnings, or restrictions at the borders, and aviation came to a virtually complete halt, which has led to a vast number of cancellations. It was an unforeseen situation that no one could prepare for. Many passengers have inquired whether they were entitled to compensation under Regulation (EC) No 261/2004 of the European Parliament and Council. According to the Regulation,
passengers have the right to compensation by the operating air carrier if their flight is cancelled less than two weeks before the time of departure, unless “the cancellation is caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken”.
In the case of package trip cancellations, directive (EU) 2015/2302 of the European Parliament and of the Council (12) (‘the Package Travel Directive’) provides that, if the trip is cancelled due to ‘unavoidable and extraordinary circumstances’, travellers have the right to get a full refund of any payments made for the package within 14 days after the termination of the contract.
The coronavirus travel restrictions fall under the above-mentioned exception, explained the experts of D.A.S. Legal Expenses Insurance Company to Origo. Therefore, the purchase price has to be reimbursed by the airlines. However, the cancellations caused liquidity problems in the transport and travel sectors, and airlines do not always receive reimbursement of prepaid services. If carriers become insolvent, there is a risk that many passengers would not receive any refund at all.