NEWS
EC could change rule on refunds
Ian Taylor
The EC was considering updating its guidance on airline refunds for cancelled flights this week, an issue of extreme concern to agents and operators. Airline sources suggested
hargeback woe We’re proposing
temporary changes to regulations to buy time for companies
An industry source said: “There is
concern the decision is drifting. “BEIS is still caught up on the
legal issues, the consumer politics and EU politics. They get this [refund credit note] regime will deliver refunds more quickly but are worried about how to explain it to consumers. Abta is following up with officials again and again.” The source warned that without
action, consumers would seek refunds via credit cards, saying: “The chargeback issue will become a serious problem.” That warning was echoed
by Travel Trade Consultancy director Martin Alcock who told an International Travel Law Network video conference: “We might end up where credit card chargebacks are what bring companies down.”
travelweekly.co.uk
‘CREDIT NOTES MAY BE ONLY OPTION’
Abta, with the CAA, has been urging the DfT and BEIS to act on refunds for more than a fortnight. It wants BEIS, which oversees the Package Travel Regulations, to allow refund credit notes to replace cash refunds temporarily and the DfT, which oversees the Atol scheme, to confirm the delayed refunds are protected should businesses go bust. The delay has seen Abta advise members to delay refunds and issue ‘refund credit notes’ on bookings it protects and on Atol-protected bookings up to July 31. T
ravel Weekly understands the DfT
is convinced of the need to act, but ministers and officials at BEIS are not and believe delaying refunds “is not good news for consumers” and would contravene EU law. The reality may be agents and operators must accept Abta guidance without government or CAA confirmation and, in the words of an industry source, “muddle through”.
the EC would temporarily modify the requirement under Regulation 261 on air passenger rights to refund consumers within seven days to allow the issue of credit notes or vouchers. Carriers have been lobbying
on the issue intensely in Brussels, with many airlines substituting refunds for vouchers to conserve cash. However, while such a move would provide clarity on airline refunds it could lead consumers to seek refunds from credit cards, triggering chargebacks to agents or operators for cancelled flights they had booked. A senior airline source said:
“The EC is looking at an urgent revision to 261 on vouchers. The law is the law, [but] different airlines are taking different interpretations [of the law]
to get through this crisis. “It’s a minefield. The Package
Travel Regulations and EC261 overlap but don’t say the same. Everyone acknowledges it’s difficult. A lot of consumers want a refund.” The EC updated its guidance
on March 18 to confirm that cancellations due to Covid-19 constitute “extraordinary circumstances”. The CAA, which enforces
the rules in the UK, updated its guidance on March 23 noting: “It’s open to airlines to offer incentives to passengers to encourage them to fly at a later date, for example through providing vouchers of a higher value.” A senior leisure travel source
said: “The CAA is trying to get action by the airlines by consensus.” Tim Alderslade, chief executive
of Airlines UK, which represents British Airways, easyJet, Ryanair and Norwegian Air, said: “Airlines are facing unprecedented challenges. They are complying with the guidelines, but are facing a larger-than-usual volume of claims and are not able to bring in additional staff to deal with them.”
2 APRIL 2020
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PICTURES: Shutterstock
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