Covid-19. Travel plans cancelled? How does this affect you?

Dr. Nicole Cannataci [Associate FSGM.Partners] ​

How are businesses tackling COVID-19?
The world is currently in a state of pandemic. COVID-19 has taken over and affected thousands of lives all over the world, leaving many futures uncertain. Economies will take a significant hit globally, and many plans set to happen this year, be them business or leisure, have been cancelled. Therefore, the question stands; how are businesses, particularly those responsible for one’s travel plans, handling the impact of COVID-19? Information below is based on information publicly available as at 30th March 2020. 
 
Airlines
As the spread of COVID-19 increases drastically all over the world, many countries have banned flights entering into and leaving their countries, in order to attempt to combat this tragic pandemic. But what does this mean for the average consumer who made travel plans and purchased flights during this time?
 
AirMalta
As per AirMalta’s notice on the 4th of March, customers who have booked a flight with the airline prior to the 4th of March are able to alter both their travel date and destination for “€10 per passenger per sector, plus the applicable fare difference and taxes” [1]. No refund option is available for said customers. On the other hand, customers who have booked a flight on the 4th of March or the following days, do have the option to request a refund for their flight, as well as to reschedule their flights to a later stage, yet the same €10 fee for such changes still applies. In both scenarios, all flights must be completed by the 31st December 2020.
 
Yet, unfortunately, those customers who, in light of the spread of COVID-19, had already altered or cancelled their flight itinerary prior to the aforementioned communication by the airline on the 4th of March, do not benefit from any of the above options. One could argue that this position taken by the airline may constitute an abuse of force majeure, with the airline using COVID-19 as an excuse for the non-performance of its obligations to its customers, but to arrive to such a conclusion, one would need to carefully analyse the contractual obligation entered into between the customer and AirMalta.
 
RyanAir
Ryanair has taken a friendlier approach to this current pandemic. If a customer has booked a flight with the airline, only to have that flight cancelled due to COVID-19, all customers are first notified of such cancellation via email or SMS and are then given the following options; either to request a refund, to rebook their journey at a later date or even re-reroute their journey [2] to avoid countries severely affected by the virus. Such options may be accompanied by fees, but it is evident that this airline provides a wider variety of options than the one above.
 
Accommodation
Similarly, businesses who offer accommodation services are also cancelling customer reservations to attempt to control the spread of the virus. How will this affect the average consumer who reserved a hotel room or an apartment abroad?
 
Booking.com
The website has declared a force majeure circumstance due to the global pandemic and for the utmost safety of both its partners and its guests, reservations for accommodation in areas severely affected by the virus are cancelled. Furthermore, the website has made it obligatory that its partners (including landlords, hotels, hostels etc.) waive any cancellation costs including fees, expenses and/or other amounts [3] for its customers affected by such cancellations. The business goes on to state that where landlords or property owners have closed their doors, out of their own choice, due to the pandemic, such property owners are to refund their clients in full for their cancelled reservation.
 
Air B’n’B
While this business hasn’t declared a force majeure like the one above, it has still implemented sufficient measures to assist its customers in these difficult times. For those customers who booked accommodation using the website on or before the 14th March 2020, for a stay between March 14th and April 14th 2020, these customers are entitled to a free cancellation. This not only includes a free cancellation, but also a full refund for the customer as well as a free cancellation for hosts too.
 
For those reservations made after the 14th March 2020, one cannot argue that this business is abusing a force majeure circumstance, for not refunding its customers during this time. The World Health Organisation declared COVID-19 a pandemic on the 11th of March 2020, therefore any reservations made from the 14th of March onwards contain an element of foreseeability to the potential cancellation of the reservation due to the virus. Under their extenuating circumstances policy, the business has catered for such cancellation of reservation made after the 14th of March only in scenarios where either the guest or the host has fallen victim to COVID-19.
 
COVID-19 has and will continue to affect businesses worldwide, and its full impact on the economy still has to be seen. Whereas many businesses are offering cancellation services, refunds and other options to aid their customers in this troubling time, it is important to analyse each service provider’s terms and conditions, especially in relation to force majeure circumstances.

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[1] https://www.airmalta.com/information/about/news-overview/news-detail/010-2020-en
[2] https://www.ryanair.com/ie/en/useful-info/disruptions-and-refunds/coronavirus-covid-19
[3] https://partner.booking.com/en-gb/help/legal-security/important-information-regarding-coronavirus