Reimbursement of the airline ticket in the form of travel vouchers
The ECJ strictly regulates the possibility for airlines to offer travel vouchers to passengers whose flights have been cancelled, instead of cash refunds.
Since the Covid pandemic, tourism professionals, and airlines in particular, have faced serious cash flow difficulties resulting from the massive cancellation of trips and flights. Indeed, the various lockdowns and travel restrictions worldwide (border closures, visa cancellations or suspensions, etc.) have grounded aircraft and thus eliminated all air travel (with the exception of certain repatriation flights).
Thus, in the event of a flight cancellation, Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, requires – in Article 8 – that the air carrier reimburse its passengers within 7 days (unless the passenger chooses to postpone their trip to a later date of their choosing).
In practice, air carriers normally manage to process flight cancellations by offering a refund within 7 days. However, due to the cancellation of all their flights, processing claims has taken considerable time. Above all, this has generated serious cash flow difficulties that could lead to the liquidation of some airlines.
While the aforementioned European regulation expressly provides for reimbursement in cash (by bank transfer or check), other forms of reimbursement, such as travel vouchers and/or other services, are not automatically excluded (Article 7.3 of said regulation). In the latter case, the carrier must nevertheless obtain the passenger’s signed agreement.
The ECJ, however, is flexible regarding the form of this “signed agreement” from the passenger, as this method can, of course, be carried out electronically, while preserving the passenger’s substantive rights. This is evident from two recent cases concerning flight cancellations during the Covid pandemic.
Thus, in the first case (ECJ, 21 March 2024, C-76/23, Cobult UG v. TAP Air Portugal SA), the Court of Justice held that such a signed agreement could be inferred, at the time the passenger completed an online application, from selecting the option for a travel voucher.
The Court verifies that the passenger did indeed make an “effective and informed choice” in this case. According to the Court, this implies that the air carrier must have previously informed the passenger, in a fair and clear manner, of the various refund options (including cash refunds) available. In other words, the passenger must be able to freely and knowingly consent to a refund of their ticket in the form of a travel voucher instead of a cash refund.
In terms of form, the Court confirms that sending a completed form from the passenger is sufficient, without requiring the passenger’s handwritten or digital signature. Therefore, the passenger’s handwritten signature is not required to validate such an agreement.
In a second case, however, the Court held that the passenger’s signed agreement could not be inferred solely from the creation of a loyalty account on the carrier’s website (ECJ, 19 January 2025, C-642/23, Flightright GmbH v. Etihad Airways).
Indeed, the Court considered that “the passenger is not deemed to have given their ‘signed agreement’ to the reimbursement of the ticket in the form of travel vouchers when they have created, on the carrier’s website, a loyalty account to which these travel vouchers were to be transferred, without having confirmed their agreement by their explicit, definitive, and unequivocal acceptance of this method of reimbursement.”
For the Court, the creation of a loyalty account on the carrier’s website is not sufficient to consider that the passenger has given “explicit, definitive, and unequivocal acceptance” of this method of reimbursement by travel vouchers, even if the carrier has undertaken to credit “miles” to this loyalty account.
The electronic method is therefore not being called into question, but the carrier will have to justify the information provided to passengers regarding the various refund options offered, thus justifying a passenger’s preference for a travel voucher instead of a cash refund.
The Court is therefore prioritizing passenger information over the method by which the passenger expresses their choice.