Amid the collapse of the aviation sector due to the pandemic, the European Commission has reportedly been planning to tell the member countries of the EU to provide state guarantees for travel vouchers. Several member states of the European Union including Germany have called for a temporary suspension of rules that forces airlines and the hospitality industry to offer full refunds while cancelling flights and hotel bookings.
According to the proposed plan, the member states will be asked to make vouchers more attractive by providing incentives to travellers to make them accept vouchers. It calls for assurance of insolvency protection by the states for such vouchers and to make the vouchers more flexible and transferable. The aviation sector is one of the hardest-hit due to the pandemic with most of the flights around the world remains grounded due to travel restrictions.
Last week, the Airports Council International (ACI) World and the International Air Transport Association (IATA) called for immediate financial relief to assist airport operators and airlines amid COVID-19 crisis. In a joint statement, the associations urged the governments to provide relief which will support the essential connectivity the industry will provide for economic recovery after the crisis subsides.
“The industry is united with governments around the world in efforts to stop the spread of the virus, and, in the face of massive government-imposed travel restrictions,” the statement read.
ACI and IATA have demanded immediate relief through tax relief including alleviation of payroll taxes, corporate taxes, concession fees, or other government incomes from the industry. It has also called for support via loans, loan guarantees or direct support to maintain the financial liquidity across the aviation ecosystem.
On May 5, IATA also expressed its reservations against leaving 'middle seats' empty as part of the social distancing measures. The association said that it does not recommend airlines to leave 'middle seats' claiming that evidence suggests that the risk of transmission onboard aircraft is low.
(With agency inputs | Image credit: AP)