sean1982 wrote: ↑07 Apr 2020, 09:23
Whilst I agree and sympathise with you Romax, then it should be put into a law by politicians. It’s a knive that cuts on two sides. Airlines need to money to preserve their cash, but consumers have money tied up in something that they can’t use and may also be in financial trouble where a refund could lighten the burden. It’s a thin chord to walk on indeed, but changing the rules after the game has started is not something I personally am a fan off
It has been done in the past you now, notably during the financial crisis, when ordinary clients of certain banks in Southern Europe were prevented by both local as well as European regulators from withdrawing their money from their savings accounts in order to halt a run on the bank, as nobody has the required liquidity to pay out all of its clients at the same time.
Anway, not sure a new legal initiative is needed to extend the same principle to airlines: it seems to me all that is required is a clear interpretation from the EC as to whether this unprecendented EU wide lock down is indeed an exemple of a force majeure situation already foreseen in their rules.
But as far as I understood, at least the Netherlands have meanwhile legislated as such to avoid any discussion and provide a solid legal basis, meaning KLM is no longer re-embursing any of their clients but rather just rolling over the ticket into a flight voucher, based on a (new?) Dutch law.
I had a ticket booked on them for this month and I got a mail informing me about the fact I can NOT request reimbursement, but have to accept the voucher valid for a year in case I can not yet rebook my flight. Sort of a bail-in light, so to speak:
https://www.klm.com/travel/nl_en/prepar ... /index.htm
Which brings us to an interesting solution to the urgent liquidity problems of all airlines: convert outstanding bookings into shares!
It has been done with certain banks in Cyprus in 2011 or around, where all savings were simply turned into shares of the bank: the notorious bail-in principle.
Personally, I would be in favour of something similar as it would:
1- dilute the ownership of current shareholders, thus constitute moral hazard to them
2- involve customers which have voluntarily engaged in a relationship with the airline, albeit on different grounds
3- reduce the need for public financing to the absolute minimum