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Does 261/2004 still apply

Old 29th Mar 2020, 14:02
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Does 261/2004 still apply ?

Given the current crisis, I'd guess one can reasonably say that 5.3

An operating air carrier shall not be obliged to pay compensation in accordance with Article 7, if it can prove that the cancellation is caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken.
is indeed relevant. As such cancellations would not anymore give a right to any compensation. But what about refunds (which are, for obvious reasons, made difficult by many carriers) ? I don't see a "force majeure" clause in the regulation.

Thoughts ?
?

Last edited by atakacs; 8th Apr 2020 at 17:00. Reason: Typo
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Old 29th Mar 2020, 14:39
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That is my understanding but there will be others along shortly to confirm or deny.
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Old 30th Mar 2020, 09:19
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papers today saying travel business asking for a cancellation of the rules or at least a suspension for up to a year..........
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Old 30th Mar 2020, 09:23
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Originally Posted by Asturias56 View Post
papers today saying travel business asking for a cancellation of the rules or at least a suspension for up to a year..........
Interesting (and not unexpected tbh). Any links ?
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Old 30th Mar 2020, 12:45
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Originally Posted by atakacs View Post
Given the current crisis, I'd guess one can reasonably say that 5.3
Quote:
An operating air carrier shall not be obliged to pay compensation in accordance with Article 7, if it can prove that the cancellation is caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken.
is indeed relevant. As such cancellations would not anymore give a right to any compensation. But what about refunds (which are, for obvious reasons, made difficult by many carriers) ? I don't see a "force majeure" clause in the regulation.

Thoughts ?
Much of EU261 deals with compensation because airlines had for far too long been dealing with passengers in a somewhat cavalier fashion.

These Covid 19 cancellation issues are almost exclusively about reimbursement of the ticket cost following the cancellation of the flight. Do airlines expect to cancel the flight and keep the money? Maybe in their minds that seems a reasonable thing to do, but the law thinks and says otherwise.

Compensation would involve giving back more than the cost of the ticket, which I don't expect, but wouldn't object to.

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Old 30th Mar 2020, 14:00
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Originally Posted by 11277m View Post
These Covid 19 cancellation issues are almost exclusively about reimbursement of the ticket cost following the cancellation of the flight. Do airlines expect to cancel the flight and keep the money? Maybe in their minds that seems a reasonable thing to do, but the law thinks and says otherwise.
Check article 8 - for what I can read out of it is pretty clear: if you elect for reimbursement of a cancelled flight it should be done within 7 days, no but, no if, no "force majeure" clause.
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Old 31st Mar 2020, 07:44
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Originally Posted by atakacs View Post
Interesting (and not unexpected tbh). Any links ?
papers pay walled but this https://www.businesstravelnews.com/G...ncellationsThe European Commission this week released a public guidance document indicating that airlines are not obligated to compensate passengers for flight cancellations caused by the Covid-19 outbreak under the European Union's Flight Compensation Regulation EC 261/2004, because it falls under the "extraordinary circumstance" condition.

"The Commission considers that, where public authorities take measures intended to contain the Covid-19 pandemic, such measures are by their nature and origin not inherent in the normal exercise of the activity of carriers and are outside their actual control," according to the March 18 document.

In regard to flights canceled indirectly by the coronavirus outbreak, such as because of weak demand, airlines also are exempt from flight disruption compensation.

However, the document noted airlines must continue to abide by other obligations under EC 261/2004 in the event of a cancellation. Airlines must offer to accommodate passengers free of charge if they cancel their flight. "This consists of meals and refreshments in a reasonable relation to the waiting time; hotel accommodation if necessary, and transport to the place of accommodation," according to the document. Furthermore, if a carrier cancels a flight, it must offer passengers the option to get a refund.

The International Air Transport Association, which had requested exemptions from EC 261/2004's obligations due to Covid-19, in a statement called the new guidelines "disappointing" and "unhelpful" and said they had "fallen short" of the relief they need.
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Old 31st Mar 2020, 09:05
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Thanks for the links - I muss say that the IATA statement is rather puzzling - what did they expect: cancellation without reimbursement ?
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Old 31st Mar 2020, 15:28
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yes of course.......................
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Old 31st Mar 2020, 16:54
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A question about cancellation. Just had a pre-planned flight cancelled by the carrier 2 days in advance. Some advice please, as I won't be in that part of the world to retake that flight and the way things are going it might be a while before anyone could. I want the amount reimbursed back to the CC it was paid from. They have offered these options...


During difficult times, our commitment to you is even stronger. And so that you have time to decide what to do, weíve changed our processes so that you donít have to make any decisions immediately.

Now it is not necessary for you to call our Contact Center, nor go to the airport before the original date of your flight. The amount you paid for the ticket will automatically be credited to you so you can use it before December 31, 2020.

These are your options:
  • Reschedule the date of your flight, free of charge, to the same destination and in the same cabin, before December 31st
  • Change your tripís destination with no penalty fees, only paying for the fare difference, when applicable.


If your ticket was purchased from a travel agency, please contact them to manage the changes.
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Old 31st Mar 2020, 17:39
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I consider CV19 to be way outside of EU.261. I have no flights booked but if I did - I would expect reimbursement without compensation. If I was travelling and needed to get home, I would not expect compensation.

The world is now in a unique situation. During the last global pandemic on this scale (1919/20) the world was utterly different. It is not realistic to expect any organisation to be be able to follow rules that did not specifically allow for a Pandemic.

Yes, it must be terrible to be unable to get home but it is not the fault of the carrier.
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Old 1st Apr 2020, 10:42
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No-one reasonable is asking for compensation. But many airlines are defaulting on their obligation to reimburse, if at all making the option available.
Now I understand they are bleeding money left right and center, yet prudent accounting practice would see them not spending the paid fare before actually delivering the service...

Last edited by atakacs; 4th Apr 2020 at 07:20.
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Old 13th May 2020, 21:17
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It would seem that the EU is doubling down

But enforcement remains non existant...
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Old 24th May 2020, 13:18
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Well me again with my pet peeve topic

I'm not an accountant but I know a little bit about revenue recognition & various accounting standards such as GAAP / IFRS.

I would venture to say that when a customer is paying for air travel there are usually two components: the actual fee paid to the airline for the service of transporting you from A to B and various (usually a lot) of taxes and fees.

These are usually paid upfront by the customer and I'm sure any decent accountant would book them on different transitory accounts for further processing, but definitely not as revenue. Diverting the taxes for other purposes could very likely be a criminal offence in various jurisdictions and I don't see how prudent accounting practices would allow the airline to use the airfares before rendering the service. As such I am somewhat dismayed (but not really surprised to be honest) that the industry is seemingly not being able to actually reimburse the customers for services not rendered. I can understand that some of it is a part of the leverage they used to get the various bailouts which have now been implemented but my question is: are most / all airlines actually running fool of good accounting practices? If so how can their account be audited (at least for the publically traded one) ?
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