Majority of EU states back suspension of rules forcing airlines to pay refunds

Carriers should be allowed to offer vouchers to help preserve cash, states argue

An Air France plane on the runway in Roissy. The airline is one of a number that has benefited from state bailout funds as the Covid-19 outbreak has hit travel demand. AFP

Germany, Italy and Spain have joined a call by 12 European Union governments for the EU's executive body to suspend rules forcing crisis-hit airlines to offer full cash refunds for cancelled flights, France said in a statement on Saturday.

The dozen EU governments, including Paris, urged the European Commission on Wednesday to suspend rules forcing the cash-drained airlines to offer refunds instead of vouchers for future travel because of the Covid-19 pandemic.

"I'm glad a very large majority of member states are supporting my request to authorise airlines and maritime groups to temporarily use vouchers when trips are cancelled, so as to relieve their cash reserves while protecting passengers' rights to a refund," French transport minister Jean-Baptiste Djebbari said in a statement.

Airlines across Europe, including Lufthansa and Air France-KLM, have sought state rescues as coronavirus lockdowns have forced them to ground their fleets for more than a month, with no end in sight.

The European Commission, which is set to issue guidelines on how the broader transport industry could gradually restart, has said so far that airlines must follow EU rules and provide refunds for cancelled flights.

They should only issue vouchers if passengers accept them.

Governments in favour of a temporary waiver have said vouchers should be valid for a set period and include the right to reimbursement if they are not used before the expiry date. Protection should also be provided in the case of airline bankruptcies.