EU Regulation 261/2004 may require airlines to refunds cancelled tickets within seven days by bank transfer, but Lufthansa chief executive Carsten Spohr said that forcing carriers to hand back cash rather than accept vouchers would be perilous for the sector.
Spohr was speaking at the first virtual Annual General Meeting of Lufthansa where he asked that customers for their understanding over refunds given the extent of the current downturn on the airline’s balance sheet.
“We are also asking a lot of our customers, above all, patience. Most European countries are supporting the temporary voucher solution for cancelled tickets. The EU has however not yet been able to agree on such a regulation.
It could endanger the entire travel industry if we are required to continue instant reimbursement of cash in the current phase. In addition, our customer centres and processes are simply not designed for such a multitude of reimbursements. We therefore also ask our customers for their understanding.
Yesterday AerCap became the latest airline or lessor to announce that it is adjusting its orderbook and likewise Lufthansa is also in discussions with OEMs over future aircraft deliveries. Additionally Spohr said the German flag carrier was in discussions over reducing costs with all providers of aviation services.
“We are in negotiations with aircraft manufacturers with regard to postponing aircraft deliveries because we will not be able to return to our old fleet size for an indefinite period. And we are also negotiating with airports, air traffic controllersand the public sector on a fair distribution of costs. Specifically, by reducing fees or deferring taxes and social security contributions.”
Despite this Spohr said that these actions would not come close to compensating Lufthansa for the lack of income from a fall in passengers’ numbers of 99% and the chief executive warned the firm’s liquidity would continue to decrease significantly over the next few weeks.