Air France advocates for loosening of EU passenger rights, says GlobalData

Following the meeting yesterday between Air France representatives and the French Commission for Sustainable Development and Spatial Planning to discuss a revision of the EU flight compensation regulation 261/2004 amidst the COVID-19 situation;

John Vandesquille, Travel & Tourism Analyst at GlobalData, a leading data and analytics company, offers his view:

“With IATA estimating that the COVID-19 pandemic will see 2020 passenger revenues fall by 55% (US$314bn) compared to the previous year, it is not surprising to see airlines seeking help.

“The French Government already agreed to a number of measures to support airlines, such as secured loans and tax deferrals. Nevertheless, the flag carrier, Air France, claimed that continuing to strictly apply the EU rules compensating passengers in case of flight cancelation or significant delay would be fatal for the industry.

“The company requested the right for airlines to provide vouchers instead of cash refunds, which would allow them to maintain their cash flows. If this seems unfair from a consumer point of view, as it is uncertain when passengers will be allowed to fly again, it is a necessary compromise offered by Air France.

“However, this compromise is surprising considering how controversial the regulation is among carriers, many of them considering it too consumer-friendly. This can explain why the EU is wary of loosening the rules in favor of airlines, as this could be seen as the first step towards stripping passengers of their rights.

“The implementation of a European compensation fund, not dissimilar to the British ATOL protection scheme, could be a good middle ground solution allowing for both the safeguarding of passenger rights and support for airlines in these difficult times.”

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