The European Commission’s Tourism Package is too Cautious to Effectively Protect passengers.

On 13 May, the European Commission presented its Covid-19 Tourism Package. While APRA welcomes the Commission’s ambitions towards opening up the European tourism industry again in a structured and unified manner, the decision to issue guidelines on vouchers rather than taking action against infringing Member States means they are failing to effectively protect European travelers. 

Many in the travel industry have been hoping for some relief after the sometimes difficult and restrictive quarantine measures. By introducing a phased approach to opening up borders and by offering clear health guidance, the EU’s Covid-19 Tourism Package provides a bit of light at the end of the Covid tunnel. 

The plan heralds better times for the aviation industry, most of which have already started flying again to several destinations and will be expanding their routes going forward. With airlines’ financial stability looking more secure, it’s time for the EU to reaffirm their commitment to the passengers, who are, after all, funding airlines via the public bailouts. 

As passenger rights advocates, we are pleased that the European Commission has continued to recognize the application of Regulation EC 261, on passenger rights. Whilst the guidelines on vouchers encourage airlines and Member States to make vouchers as attractive as possible to passengers, a cash refund remains the consumer’s EU right. 

However, we had really hoped that the Commission would start infringement procedures against those countries that are purposely and openly not applying Regulation EC261. Instead, Commissioner Valean has only sent informal letters to those Member States, asking them to “assess the situation”. Figures such as the Dutch Prime Minister, were very quick to take this as an invitation to extend their unlawful voucher policy a little longer. Whilst his minister fortunately came out with a rectifying message the next day, stating that the Netherlands will commit to applying the Commission’s guidelines on refunds, it is clear that the Commission’s weak approach leaves too much room for interpretation. 

With airline lobby groups and individuals continuing to use the Covid-19 crisis to push for weakening the current protections in place, the EU should learn the lessons from the 2008 financial crash and subsequent bank bailouts. They should act now to ensure passengers and citizens see the benefits of the billions they have spent bailing out airlines.

APRA President Adeline Noorderhaven said: “We have supported the airlines in their time of need, APRA was amongst the first to call directly Covid-19 related disruptions extraordinary and we have advised our passengers for several months to accept vouchers whenever they could. But the burden has been very heavy on passengers, many of whom are also struggling with surging unemployment and significantly reduced income levels. On top of that, passengers’ tax money is being used to finance the huge airline rescue funds. With billions in bailout money now flowing into the airlines’ coffers, we believe it is more than fair to say it is time to stop using passengers as cheap lines of credit and give them their money back”. We urge all Member States to follow the Dutch example and follow the rules under EC261. Attractive vouchers can be offered, but only when the passenger is able to accept them. We call on the Commission to start swift infringement procedures against those Member States that continue to ignore EU consumer protection law.

MEPs Urge European Commission to Urge Airlines to Respect Application of Regulation (EC) No. EU 261/2004

Find the Letter here

Subject: COVID-19: Airlines Application of Regulation (EC) No. EU 261/2004

Dear Commissioners,

We, the undersigned, are writing to call on you to find a sensible and pragmatic solution to ensure the respect of consumers’ rights, especially passengers’ rights, while supporting the transport and tourism sector in this period of crisis.

More specifically, when it comes to the aviation sector, there are concerning reports in numerous media outlets about airlines lack of transparency as regards passengers’ rights, as well as airlines neglecting their obligations under Regulation (EC) No. EU 261/2004, despite the very welcome interpretative guidelines presented by the Commission on 18 March 2020.

It is clear that the current situation is causing great strain on airlines in Europe, and across the globe. It is also understandable and commendable that airlines are prioritising repatriation and rebooking of citizens who are stranded due to flight cancellations or entry restrictions.

In recent days, however, as cancellations across the world have mounted, we have seen the tendency of airlines in Europe to provide misleading information to customers with regards to their rights in the event of cancellation, by the airline, of their service. Specifically, many airlines are not informing customers of their right to a full reimbursement of the ticket price paid, and are rather offering a travel voucher for future credit.

While it is an airline’s right to offer, instead of a refund, a credit for future travel to customers, this does not absolve the carrier of the responsibility to inform customers that “this offer cannot affect the passenger’s right to opt for reimbursement instead.”, as stated in the interpretative guidelines.

It is clear that many airlines are facing current financial and cash-flow difficulties, and in this respect, the Commission Temporary Framework released on 19 Mach 2020 that enables Member States to help companies to cope with liquidity shortage and needing urgent rescue aid is very welcome. It is also understandable that processing a refund for customers will take longer than usual, and we believe airlines must be given more time than the length of seven days as currently set out in point (a) of Article 8 paragraph 1 of the Regulation(EC) No. EU 261/2004.

Moreover, in the spirit of ensuring the respect of EU passengers’ rights and to avoid the consumer having to interpret each carrier’s specific terms & conditions on relief measures in this time of crisis,

Brussels, 30 March 2020

the possibility for transport, tourism and travel operators to offer a credit voucher due to the Covid- 19 crisis should be explored. If this is deemed necessary, the conditions for offering such a voucher should be clarified and applied uniformly and be covered by appropriate insolvency protection.

In this respect a credit voucher should be reimbursable in the form of future travel with the provider or the full cash value, at the customer’s discretion. The customer’s right to choose the form of ultimate reimbursement should be reactivated as soon as, or within a minimal period of time after, the current travel restrictions imposed in Europe, and on European travellers, are lifted.

Therefore, we call on the Commission to:

  1. Examine how to temporarily derogate from the seven days provision in point (a) of Article 8 paragraph 1 of the Regulation(EC) No. EU 261/2004 in order to provide airlines with flexibility and a reasonable timeframe to ensure that they are able to offer cash refunds, when requested.
  2. Evaluate how to develop a derogation which would allow airlines to offer an ad hoc Covid-19 credit voucher which fulfils the conditions outlined in this letter, with particular emphasis on minimising the duration of the limitation of the passenger’s right to choose the form of reimbursement they will ultimately be provided, as set out in the current Regulation(EC) No. EU 261/2004.
  3. Require that all airlines subject to Regulation(EC) No. EU 261/2004display clearly the rights of customers to choose a cash refund on their Covid-19 information pages.

We also urge you to extend these same requests to passengers’ rights and carrier’s obligations in the other transport sectors and to consumers’ rights in the travel and tourism sector (Directive (EC) 2015/2302 on package Travel and linked Travel arrangements) which are also experiencing a drop in demand, therefore a drop of revenues and an increasing requests for refunds. This should apply to any existing booking for package holidays that are being cancelled by the operator due to the COVID-19.

A sensible and pragmatic solution must be found and the Commission should bear in mind the difficult situation many transport, tourism and travel operators currently face while ensuring that consumers are not put in a position where they must pay for services which they have not received, as a result of circumstances beyond their control.

Yours Sincerely,

José Ramón BAUZÁ DÍAZ, Renew Europe Group’s TRAN Coordinator
Ondrej KOVARIK
Jan- Christoph OETJEN, Renew Europe Group’s Shadow rapporteur on the revision of Regulation EU 261/2004
Caroline NAGTEGAAL, Renew Europe Group’s TRAN Vice-Coordinator
Clotilde ARMAND
Petras AUSTREVICIUS
Izaskun BILBAO BARANDICA
Nicola DANTI
Valter FLEGO
Søren GADE
Pierre KARLESKIND
Elsi KATAINEN

Ilhan KYUCHYUK
Dominique RIQUET
Dita CHARANZOVÁ, Renew Europe Group’s IMCO Coordinator Vlad-Marius BOTOŞ
Jordi CAÑAS
Sandro GOZI
Svenja HAHN
Karen MELCHIOR, Renew Europe Group’s JURI Coordinator Liesje SCHREINEMACHER

APRA roundtable debate: Passengers are well protected but big lack in compliance and transparency

 

 

On 3 April, the Association of Passenger Rights Advocates (APRA) organized a roundtable debate in the European Parliament, kindly hosted and presided by MEP Pavel Telicka, who has been closely involved in many aviation policy files. The well-attended roundtable included representatives of the European Commission, European Parliament, Academia, consultants, consumer representatives and the airline industry.

 

The discussion was shaped by two key topics:  Regulation 261/2004 and the way forward, and the potential implications of the New Deal for Consumers on passenger rights. Contributions by academics around the table showed that Regulation 261/2004 has fortified passenger rights considerably. Their studies also found that the existence of the claim handling industry has significantly helped in the enforcement of passenger rights and, by extension, the efficiency of airlines. This was underlined by a recent report by the European Court of Auditors. Whilst the airline industry would like to see changes, such as longer delays before compensation and a drop in the level of compensation for duped passengers, APRA argued that this would remove the strong incentive to do a better job that was created by the Regulation. The level of enforcement by national authorities of non-compliant airlines can be as low as 2% and the fines are very low. The New Deal for Consumers seeks to strengthen consumer rights by offering possibilities for collective redress. Some of the potential drawbacks of the proposal may be that it causes lengthy processes and could add to the complexity of enforcing passenger rights.

 

To conclude the debate, APRA presented the European Institutions with its new publication: Regulation 261/2004: Stand for Passenger Rights, which outlines why passengers need the Regulation and why it works. It also includes APRA’s self-imposed code of conduct, which it has made mandatory for all of its current and future members; real case studies of the far-reaching impact delays and cancellations can have on passengers; a suggested code on fair claim handling for airlines; and key recommendations for the EU Institutions.

 

APRA President Christian Nielsen said: “The Regulation works. In fact, it works so well that countries like Canada are copying it. Any ambiguities that had been identified in Regulation 261/2004 have meanwhile been made crystal clear through a series of landmark Rulings by the European Court of Justice (ECJ). The problem is not a lack of passenger rights, but a lack of compliance and enforcement. What bothers us is that airlines like to claim that complying with the Regulation is causing airlines to go bankrupt. Yet, they are not willing to show any figures to back these claims up. We know that many airlines have gone out of business because they are taking aggressive business decisions for competitive reasons, not because of complying with passenger rights. I believe it is time we start looking at the real problems, such as infrastructure and the many strikes within the aviation industry, and stop trying to reduce the rights of passengers”.

APRA Welcomes the European Court of Auditors’ Special Report on EU Passengers’ Rights

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APRA Welcomes the European Court of Auditors’ Special Report on EU Passengers’ Rights

 

 

  • European Court of Auditors (ECA) publishes new report on EU Passenger Rights
  • The passenger rights legislation is one of the union’s flagship policies, empowering travelers with great success.
  • The report confirms passengers struggle to get the compensation owed

 

 

Brussels, 08 November 2018

The EC 261-legislation is a success, but passengers struggle to get the compensation they are owed. That is the conclusion in a report presented – and available here – today by The European Court of Auditors (ECA) in Brussels. The study, named “EU passenger rights are comprehensive, but passengers still need to fight for them” and available here, is a complete performance audit on passenger rights.

The report confirms that passengers have a well-developed EU system of passenger rights. For air passengers, this protection comes in the form of Regulation EC 261/2004. The European Commission considers the passenger rights legislation as one of its great successes in empowering consumers. The problems are thus not related to inadequate protection but to a general lack of awareness amongst travelers as well as issues regarding enforcement.

The report shows that the Commission’s proposal to reduce the cost of assistance and compensation borne by carriers, as well as to increase waiting times from 3 to 5 hours, was only based on very limited data made available to the Commission by the airlines, making these elements of the proposal misguided.

Furthermore, a recently published research paper by the College of Europe confirmed the effectiveness of Regulation EC 261/2004 in reducing flight delays. It further highlighted the importance of the work that the European claim industry does to encourage airlines to improve their service. Continuing its work to represent passenger rights in Europe, APRA participated today at the stakeholder roundtable debate organised to present the ECA’s report in Brussels.

The audit report furthermore states that claim agencies and alternative dispute resolution bodies fill the enforcement gaps regarding compliance with the passenger rights legislation. It outlines cases whereby passengers were ignored and refused by the airlines until enlisting a claim agency, which helped the passengers successfully enforce their rights.

APRA President Christian Nielsen said: “The report shows that people want compensation after suffering the consequences of a disrupted flight. However, two thirds of passengers don’t claim their rightful compensation because they believe they won’t be successful or they don’t even know what they are entitled to. We are proud of the work that the European claim industry has done to date in closing the awareness and justice gap, and we look forward to helping more and more passengers around the world understand and enforce their rights vis-à-vis non-compliant airlines.”

 

 

Passenger Rights Regulation EC 261 Highly Effective in Reducing Flight Delays, College of Europe Research Shows

On 29 October, as a part of its series of policy briefs[1], the College of Europe University published a concise paper entitled Consumer Rights Improve Service Quality: Evidence from EU Air Passenger Rights. Authored by Dr. Hinnerk Gnutzmann and Dr. Piotr Spiewanowski, the paper eloquently provides evidence that the Regulation works, and it works well.

Passenger rights are one important part of the EU’s overall objective to offer consumers maximum protection, which is laid down in Art. 169 of the Treaty on the Functioning of the European Union (TFEU). The authors of the paper published yesterday prove that the Regulation “has not only strengthened the protections of passengers on severely delayed or cancelled flights (insurance component), but also increased the reliability of EU airlines across the board (service quality component)”[2].

The paper furthermore shows that European air passenger rights are remarkably strong compared to other parts of the world. In all other countries, policies put less emphasis on the consumer and the insurance component is not present. This results in little to no positive impact on delays.

Awareness of EC 261 amongst passengers is crucial, the paper argues. Claim agencies play an important part in the enforcement element of the Regulation. The authors explain that “agencies charge a contingency fee to distressed passengers and credibly threaten to sue airlines in case of non-compliance. Overall, significant improvements have been achieved in this dimension without regulatory changes”. The compensation amounts laid down in Regulation EC 261 make it possible for claim agencies to help passengers. “This suggests that, as long as compensation amounts are not reduced substantially, priorities for passenger rights reform should be placed elsewhere”.

The study concludes that the EC 261 Regulation is “highly effective in reducing flight delays”. By placing financial incentives on airlines to do better, delays are effectively reduced.

APRA fully supports these findings, which are mirrored by our own data.

ENDS.

 

[1] A College of Europe Policy Brief (CEPOB) is a short paper dealing with a topical policy challenge related to European Union affairs. It starts from the analysis of this challenge and provides scientific insights as evidence base for policy choices regarding the future handling of the challenge. https://www.coleurope.eu/page-ref/cepob-college-europe-policy-brief-series

 

[2] Gnutzmann and Spiewandowski, CEBOP # 13 – October 2018

EU court said airlines must compensate for delays caused by internal strikes

EU regulation gives passengers on a delayed flight the right to compensation of up to 600 euros, depending on the distance of the flight but Airlines are exempt from paying this if they can show there were “extraordinary circumstances” which they could not have reasonably avoided.

On Tuesday the 17th of April, the European Union’s top court ruled that from now on, airlines have to pay compensation for flight delays caused by internal strikes as well, as opposed to just union organised strikes.

APRA welcomes the ECJ ruling as it increases legal certainty for air passengers throughout the EU.

Airline CEO Complains About Cost of Complying with EU Passenger Rights

Brussels, 6 March 2018.

 

During the annual Aviation Summit, organized by Airlines for Europe (A4E) at the prestigious Concert Noble in Brussels today, Lufthansa CEO Carsten Spohr, who is also the outgoing chairman of the EU Airline Lobbying outfit A4E, complained about the rising costs related to complying with EU Regulation 261, which ensures passenger rights.

Claiming that the Regulation needs urgent revision, Mr. Spohr accused the EU Council (the collective of EU Member States) of holding the file hostage over a dispute regarding Gibraltar. According to the CEO, Courts and Judges across the EU apply the Regulation differently, which creates uncertainty and brings about large costs.

Continue reading “Airline CEO Complains About Cost of Complying with EU Passenger Rights”

New Passenger Rights Group APRA Successfully Launched!

On 31 January 2018, during a cocktail event in the European Parliament, the Association of Passenger Rights Advocates (APRA) announced itself as the new player on the Brussels policy scene. Policy makers from all institutions, as well as airlines and other stakeholders came together to debate the need for strong and clear passenger rights.

Continue reading “New Passenger Rights Group APRA Successfully Launched!”