KLM Now Gives 15% Bonus Voucher & Promises Cash Refunds Next Year

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Airlines in Europe, including the KLM – part of Air France-KLM, have unlawfully tried to force passengers to accept credit vouchers for canceled flights instead of refunds.

KLM

EU reminded airlines in March that refunds for canceled services must be provided (read more here), and then reinforced it this week (read more here) after some countries had tied to get EU Commission to change their mind (read more here).

You can access KLM here.

Here’s an excerpt from the NL Times (access their piece here):

The airline still will not issue cash refunds for tickets cancelled before Thursday’s decision. Those passengers will have to keep their vouchers, the airline said, but they will be compensated with a bonus value added to their vouchers. The voucher may be exchanged for cash if not used within 12 months, a spokesperson for the airline told NL Times.

The airline must provide refunds for tickets canceled before Thursday too. There was no decision made by the EU this week, but they were instead reminding member states that they need to enforce the law. If they wouldn’t, then the EU could (eventually) start proceedings against the member state (would take years).

NL Times continues:

The airline would not respond to customer complaints about how the situation was handled to date, other than to say that KLM felt by issuing vouchers which could be redeemed for cash later was a “reasonable balance between protecting passenger rights and the reality in which all airlines now operate.”

There is no balance here. Customers have been eligible, by law, to be refunded to services that have been canceled. This is plain and simple.

Here’s KLM’s voucher policy update:

KLM Royal Dutch Airlines always operates in compliance with national and international laws and regulations. The on-going, unprecedented corona crisis has caused a great of uncertainty for both customers and companies, prompting all sorts of unforeseen circumstances that are, regrettably, not fully covered by existing regulations on various issues, including the payment of refunds. During the past period, KLM has issued refund vouchers for tickets booked on cancelled flights. These vouchers can be redeemed for cash after 12 months, if the voucher has not been (fully) redeemed. We understand that this is cause for uncertainty among customers, but we hope they will understand that we have to contend with a wide array of factors.

The circumstances in the airline industry have now stabilised somewhat. In response to this trend and the latest recommendations of the EU Commission, the Netherlands Minister of Infrastructure and Water Management, Cora van Nieuwenhuizen, has decided to withdraw her earlier instructions to the Netherlands Human Environment and Transport Inspectorate, which were to remain in force until 1 July. KLM will therefore adjust its policy accordingly for passengers whose flight may be cancelled in the coming period. These customers will be offered the choice of a voucher or a cash refund. However, in view of the magnitude of this crisis and the number of cancellations, it may take longer to process these transactions. We ask for your understanding in this matter. KLM will, in the near future, also present a plan to make all vouchers more attractive by adding extra perks.

Here’s the reminder from the EU that countries need to follow the law:

EU Commission: Passengers Are Eligible For CASH Refunds

Conclusion

Airlines should have made these vouchers a desirable option from the beginning instead of refunds. I would not choose a voucher if the bonus is only 15%. I could perhaps entertain the idea if they increased it to 50% (would not be bad for the airlines even then), or if they had offered space-available upgrades, bonus miles, or converting them to Flying Blue miles at a good rate (like what QR is doing).

I am glad that the EU did the right thing and didn’t change or even entertain the idea of changing the passenger regulations (EC 261/2004) despite the push from some member states to allow vouchers.

Countries are currently free to prop up their financially failing airlines if they so choose, and many have. Stealing money that belongs to passengers whose flights were canceled is not the right way to run business.

The KLM’s stance here that they wouldn’t need to promptly refund itineraries in cash that were canceled before Thursday this week is utter nonsense. I encourage everyone to begin charging back or taking the issue with the DOT, for tickets to/from the US, or National Enforcement Bodies in the EU/EEA.

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