The EU Regulation

Jet fuel and cancelled flights, what passengers will be entitled to in terms of reimbursement

The scenarios for next summer after the Hormuz crisis. Meanwhile Lufthansa cuts 20,000 short-haul flights

Iata: mesi per tornare a forniture normali di carburante per aerei

3' min read

Translated by AI
Versione italiana

3' min read

Translated by AI
Versione italiana

The price increase alone is not enough to justify the failure to compensate airlines for flight cancellations. For Brussels, it is "fuel shortage" the only "extraordinary circumstances" that can exempt the companies from the obligation to compensate for a cancelled route. And, for the EU, we are not there yet although attention remains high on the potentially "catastrophic" consequences of a "prolonged blockade of the Strait of Hormuz".

With a package of guidelines coming in May, Brussels will clarify to airlines and capital the rights of passengers and public service obligations in the event of possible fuel shortages due to the crisis in Iran. But, the issue was already central in the videocall of the 27 transport ministers. Commissioner Apostolos Tzitzikostas issued a warning to companies that, with the rise in jet fuel prices, have started to cancel flights that are less economically advantageous. In this case, in addition to the predictable reimbursement in the event of a fuel shortage, passengers are also entitled to 'compensation. I want to make one message clear, there is no safer and more stable place than Europe to visit this summer,' Tzitzikostas remarked.

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Immediately came the reaction of the National Consumers' Union: 'Good for the EU, even if the legislation is already clear. Travellers will be entitled to both reimbursement and compensation if they are not notified in time'. The jet fuel dossier was not the only topic addressed in the video call. Matteo Salvini reiterated the need to suspend the Stability Pact 'or Italy will be stuck'. It is impossible, however, that he will be satisfied. In the 'Accelerate EU' plan that the European Commission will present in the coming hours, Brussels will indicate five measures to tackle the crisis. The refrain remains to allow member states 'targeted and temporary interventions' through state aid.

The distinction between monetary compensation and reimbursement is important. The former is an economic compensation (from €250 to €600) provided for by EU Regulation 261/2004. It is due when the airline cancels the flight with less than 14 days notice for its own reasons, excluding exceptional circumstances (weather, strikes). It differs from a simple refund of the ticket. The case of jet fuel shortage, therefore, might shelter airlines from paying compensation, but certainly not from reimbursement.

There will be no go-ahead for windfall subsidies, as and more than in 2022, when the financial situation - it is emphasised in Brussels - was better. Instead, there will be a recommendation to reduce consumption, especially on transport and heating. With regard to jet fuel, the Commission will launch a European Fuel Observatory, with the aim of monitoring the level of supply, and will focus on the search for alternative supplies, including Jet A fuel produced in the United States.

However, the threat of a prolonged crisis remains real, and Brussels considers introducing an obligation for the Twenty-Seven to maintain minimum stocks of aviation fuel. "We have to be prepared for possible future shocks," warned Tzitzikostas, also stressing that "any national release of fuel will have to take place in full transparency to avoid market distortions".

At present, the EU imports about 40% of its aviation fuel needs, half of which transits through the Strait of Hormuz. However, it has a refining capacity of 70% of domestic consumption. "We are not in danger, but a shortage of jet fuel is possible," warned the Cypriot presidency. The fears of a prolonged crisis also came from Berlin, which announced the convening of the Cnational security council on high energy prices precisely to discuss the supply of oil, petrol and jet fuel.

Meanwhile, the Lufthansa group has announced that it will reduce its flight offerings in the summer season, cutting some 20,000 short-haul routes by October, amounting to less than 1% of total capacity measured in seat-kilometres (Ask). The decision aims to eliminate less profitable routes, in particular from the hubs of Frankfurt and Munich, partly compensating with a strengthening of connections from Zurich, Vienna and Brussels. The first measures are already operational: about 120 daily flights have been cancelled until the end of May and the affected passengers have been informed.

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