Millions of passengers across the European Union were unfairly denied proper compensation following the cancellation of flights due to the pandemic, despite the EU doling out a record €35 billion in state aid, according to a new report by the EU’s budget watchdog.
The European Court of Auditors (ECA) says that airlines “repeatedly failed to comply with their obligation to refund customers in a timely manner (7 days)” or forced passengers to accept vouchers instead of refunds.
The spread of the pandemic grounded around 7,000 air routes, which affected tens of millions of passengers.
Under European law, airlines who cancel flights must reimburse their passengers, but many of them failed to offer cash reimbursements, forcing them to accept vouchers instead.
Of the €35 billion given airlines in state aid, Air France/KLM received €11 billion, Lufthansa €6 billion and TUI, TAP and SAS each got more than €1 billion. Aer Lingus did not get any state aid, but its parent company IAG secured a €1.8 billion loan which will also be used to help British Airways and Iberia.
But the report found that airlines didn’t always use those funds to reimburse airlines, and that EU countries did not insist on airlines offering refunds as a condition to receiving state aid.
“Airlines had hardly any revenue coming in and they found themselves short of cash,” Annemie Turtleboom, the ECA member responsible for the report, said. “Passengers were the bankers of struggling airlines.”
The European travel agents’ and tour operators’ association (ECTAA) responded to the new report by reiterating their call for a coordinated action between the European Commission and National Enforcement Bodies (NEBs) regarding airlines’ handling of flight cancellations.
It also said that “this action should lead to clear commitments by airlines to immediately address their disregard for the legal refund obligation under EU passenger rights legislation.”
ECTAA Secretary General Eric Drésin said: “Airlines not refunding as required by the air passenger rights regulation is damaging for consumers across Europe. At the same time companies through which tickets are sold are massively hurt financially as well.”