Passenger’s rights during the Covid-19 pandemic
Juan Fernando Puerta Sinisterra, Senior Associate
Brigard Urrutia, Bogotá, D C
María Paula Vargas, Associate
Brigard Urrutia, Bogotá, D C
As a response to the Covid-19 pandemic, the Colombian Government implemented restrictions on the aviation industry, which has led to a decrease of 50 per cent in the industry’s average income. Within the legal framework established by the declaration of the health and economic emergencies, as per Resolution 385 of 12 March 2020, the Ministry of Transport and the President issued the Legislative Decrees 439, on 20 March 2020, and 569, on 15 April 2020, implementing the prohibition on passengers arriving from foreign countries entering Colombia.
Even if the President has slowly and cautiously allowed the opening of airports and the reactivation of domestic operation in certain cities, the recovery path from the financial crisis also demands that lawmakers implement measures and alternatives for airlines, in order to alleviate the pressures of this industry crisis.
To balance the crisis in the industry, after restricting the arrival of passengers from abroad, the Ministry of Transport issued Decree 482 of 2020, which contains certain financial measures derived from the economic emergency declared during the Covid-19 pandemic. In particular, due to the massive cancellation of flights, the Colombian Government granted the option for airlines to proceed with non-cash refunds, to be requested by affected passengers. Such regulatory measure leads to a question about the reactivation of domestic operations and international flights (which will apparently take place in October 2020): h ow can actions to tackle the financial crisis of the aviation industry be balanced with the protection of passenger rights, specifically, the right to receive refunds in cash?
In Colombia, the Civil Aviation Authority oversees the issuance of public policy regarding the aviation industry. Under such power, this Authority has issued the Colombian Aviation Rules (‘RAC’in Spanish), which contains the regulations which aim to protect passengers in relation to refunds, inter alia, due to cancellation of flights.
This pre-Covid-19 regulation contained two mechanisms for passengers requesting a refund: cancellation of the purchase (derecho de retracto) and cancellation of the flight (desistimiento).
The applicable regulation to the cancellation of the purchase (derecho de retracto), is the general regime for consumer protection, established in Law 1480 of 2011 since the application of the rules established in the RAC was provisionally suspended by the Colombian Council of State. Per Law 1480 of 2011, the cancellation of the purchase must be claimed by the client within five business days after the online purchase of the air tickets. Once the passenger requests the cancellation of the purchase, the airline must refund the total amount of the airfare paid in the following 30 ordinary days.
This regulation for the cancellation of the purchase established in the RAC allows passengers to request a refund for the flight ticket within 48 hours of the online purchase. In the case of domestic flights, a consumer can request the cancellation of the purchase eight days prior to the date of the flight, or fifteen days for international flights. The airlines can withhold a maximum of ten per cent of the total amount paid by the passenger, excluding administrative fees and applicable taxes.
The cancellation of the flight by the passenger (derecho de desistimiento) can only be requested 24 hours before the flight. The airline can withhold ten per cent of the price paid by the passenger, which does not apply to promotional airfares. The reimbursement must be finalis ed within 30 days of the passenger requesting a refund.
As previously described, under Decree 482 of 2020 the Colombian Government provided special measures applicable to this industry, in particular, allowing airlines to refund to passengers by requesting a reimbursement during the economic emergency and ‘up to one more year’, through services provided by the airline itself rather than exclusively through a cash refund.
Decree 482 is not clear enough in relation to the exact timeframe for proceeding with refunding passengers. First, the Decree expressly mentions that the extension of time to the consumers for the refund will last for the same duration as the’emergency’. In Colombia, there were two different emergencies declared by the National Government: the health emergency, declared by the Ministry of Health per Resolution 385 of 2020, which was extended per Resolution 1462 issued on 25 August 2020, until 30 November 2020, and the economic emergency, which was declared by the Colombian President per Decree 637 issued on 6 May 2020, and which lasted until 5 June 2020. Under a conservative scenario, it should be understood that Article 17 of Decree 482 refers to the ‘emergency’ as the economic emergency. Note that the title of Decree 482 is ‘financial measures derived from the declaration of the economic, social and ecological emergency’.
Additionally, according to systematic interpretation of the law, the expression’during the emergency and up to one more year’, means the airlines can refund consumers, during the economic emergency or one year after it ends, not necessarily in cash but by providing them alternatives through the different services offered by the airline itself.
Given the above, this measure puts on hold the rights of consumers who may require a cash refund until 4 June 2021.