Only five days ago, the boss of British Airways’ owner IAG warned that the coronavirus would push weaker airlines “over the edge”. Little surprise, then, that Flybe should be an early victim: a perennial struggler to turn a profit, flying routes that few others deemed commercially viable around the UK. But, even at such a geographical remove from the current outbreak, it is unlikely to be the last.
For now, the effects of Covid-19 on airlines echo the pattern among the human population: standstill in China, tolerated by the stronger carriers abroad, but potentially fatal to those less robust. And Flybe’s pre-existing conditions included an unusually onerous tax burden of air passenger duty affecting domestic flights, dampened demand alongside Brexit, and increased fuel and leasing costs from a falling pound. Its investors – a consortium led by Virgin Atlantic swooped in last year – had sensed a final opportunity after its share price had tanked; but by January they were begging the government, in vain, for assistance to stay alive.
My flight to Europe is cancelled. All I’m being offered is an alternative flight or vouchers. Is this legal?
No. But that hasn’t stopped a number of airlines doing exactly that. All flights on EU carriers within, or into the EU, and all flights leaving from an EU airport, are protected by the EU’s “denied boarding” rules, which require a full refund in seven days when flights are cancelled.
The problem for consumers is that enforcing these rights is proving very difficult. After initially promising to refund passengers within 20 working days, Ryanair has now said passengers should accept vouchers valid for 12 months, or wait until the Covid-19 pandemic is over for a refund.
Refunds at British Airways are only being processed by customer services which, of course, is impossible to contact. easyJet, initially only offered refunds through customer services but now has a web portal to request refunds.
Note: the EU cancellation rules do not apply to non-EU carriers where the flight started outside the EU – for example, a Korean Air flight from Seoul to London.
In the face of a no-refund policy, what should I do?
Taking the offer of replacement vouchers in the current climate is highly risky given the airline may not be around in six months. While some will be happy to accept vouchers, many will not.
Coby Benson of the specialist flight compensation lawyers, Bott and Co, advises passengers to submit their refund request in writing, using the following text:
I understand that my flight [fight number] on [flight date] has been cancelled and I therefore request a full refund pursuant to articles 5(1)(a) and 8(1)(a) of EC Regulation No.261/2004. You are reminded that the refund must be made within seven days. For the avoidance of doubt, I do not accept a travel voucher.
If the airline does not respond or does not agree then the passenger can either issue court proceedings or use Alternative Dispute Resolution.
If your flight cost more than £100 and was booked using a credit card, you can hold the card provider jointly liable. When things calm down we suspect many passengers will be forced down this route.
My flight operated as scheduled but I was unable to go on it. What then?
The fact that the government advised against all but essential travel means travel insurance policies should pay foreign trip cancellation claims provided you bought your policy before the pandemic was declared on 11 March.
Miles Brignall
But other airlines – including Virgin itself – are more directly exposed than Flybe to the crisis, first cancelling major Chinese routes and then seeing the drop in demand “rippling through” the global networks, as the International Air Transport Association (Iata) warned this week. On Wednesday, Virgin announced emergency measures, including cutting executive pay, and urging other staff to take unpaid leave, after bookings halved in recent days. Ryanair and EasyJet have cancelled hundreds of flights to Italy, and other destinations, while IAG and BA have even cut transatlantic services.
No airline, it appears, is immune – underlined by the sight of US airline executives meeting Donald Trump this week to discuss the impact in a country where domestic aviation is far bigger than international travel.
Iata is in the process of quickly revising up its estimates, barely a fortnight old, of a $30bn (£23bn) hit to revenues. No one knows, analysts and executives now say, quite how much this crisis is going to cost airlines. But many warn that it already looks worse for the industry’s bottom line than the aftermath of 9/11.
Firms are restricting business travel, and international conferences are being axed by the day, pulling the most valuable customers from the traditional carriers. Passengers may still take a punt on a cheap flight – but leisure airlines in the northern hemisphere traditionally expect low demand and losses in winter months. The ebullient Ryanair boss, Michael O’Leary, claims that holidaymakers will not be deterred come Easter, and that may prove true; but if further public health measures are needed and demand tumbles throughout the peak period, more airline casualties can be expected.
