- In the Corona crisis, a number of customers are waiting for their money back for travel bookings.
- Legal-tech startups like Flightright or RightNow buy the rights of travelers and enforce their claims in court if necessary.
- The passenger rights portal Flighright announced on Wednesday that it is currently enforcing over 20,000 passenger claims and is primarily suing Ryanair and Lufthansa.
Numerous holidaymakers worldwide have to do without their spring or summer vacation this year due to the corona pandemic. Travelers are now trying to get their money back for canceled vacations, but it’s not that easy. Mediation portals, travel providers and airlines are overwhelmed with the overwhelming number of inquiries and cancellations and can hardly keep up.
Therefore, the passenger rights portal Flightright is now suing Ryanair and Lufthansa in particular, as the company announced in a press release on Wednesday. Because these airlines in particular would find it difficult to reimburse their customers for ticket prices. In the past few weeks, the legaltech startup has received around 20,000 cases from passengers who are entitled to a reimbursement of ticket costs. In total, this corresponds to a total of over 20 million euros.
Flightright is just one of many passenger rights portals like RightNow or Compensation to go that are now taking advantage of the moment. These legal tech startups make money by enforcing legal claims for passengers. They buy the claims on their tickets from the travelers and, if necessary, take them to court in order to have their claims paid out. The customer then receives the money back from the airline, and in return the agents keep a commission.
93 percent of Lufthansa customers surveyed are still waiting for their money
It wasn’t until the beginning of May that Flightright published the results of a survey among 600 of its customers. According to this, around 94 percent of the Condor customers surveyed are still waiting for the reimbursement of their already paid bookings, followed by Lufthansa (93 percent of customers), Ryanair (88 percent), Easyjet (84 percent) and the Lufthansa subsidiary Eurowings (81 percent ).
The airlines are not much more cooperative and out of court just as unwilling to pay when negotiating with passenger rights representatives such as Flightright, the startup says. In contrast, the low-cost airlines Easyjet and Wizzair complied with the demands.
The canceled flights mean immense economic damage for the airlines: At Lufthansa alone, claims by passengers for canceled flights worth 1.8 billion euros are piling up, as NewsABC.net already reported. When these are paid out is unclear.
Flightright meanwhile raises serious allegations against the aviation industry: No airline is currently behaving in accordance with the law and paying back the ticket price to the passengers. Customers would be held up, unsettled and even deceived about their rights, according to the startup.
Research by NewsABC.net partially confirmed this. This means that customers have to wait months for the reimbursement despite the promise. Furthermore, the processes for obtaining reimbursement are opaque. Customers report here of “misleading processes” and “links that lead to nothing” on airline websites.
Customers can reject vouchers
According to Flightright, Lufthansa appeals to passengers in e-mails about “the legal opinion of the federal government that has been out of date for weeks”, which had pleaded with the EU at the beginning of April to only be able to issue reimbursements in the form of vouchers. However, the EU had rejected this. According to the European Passenger Rights Regulation (No. 261/2004), tour operators and airlines must reimburse the costs for package tours within 14 days and for flight cancellations within 7 days. You may offer your customers vouchers instead, but only if they want to. The right to money back remains.
“Lufthansa is deliberately exploiting the legal situation, which is confusing for laypeople,” says Oskar de Felice, legal expert at Flightright. This is particularly critical, as Lufthansa is currently in negotiations with the federal government for a government bailout package worth nine billion euros. “As in the case of Lufthansa, on the one hand, state support, which the taxpayer pays for and at the same time cause unnecessary legal proceedings that also burden the taxpayer, is simply not understandable and an absurdity,” says Flightright founder Philipp Kadelbach.
However, Lufthansa currently expressly does not rule out planned bankruptcy. With such a protective shield procedure, the claims of passengers are part of the creditor claims. Therefore, it can happen that customers only get a fraction of the ticket price back. “The following often applies here: Those who shouted the loudest get their money,” a renowned insolvency administrator told NewsABC.net. “So those who are waiting might end up being stupid.”
So is it worth having your reimbursement enforced by legal tech startups? The agency fees payable in the event of success vary depending on the effort and provider: Flightright charges an agency fee of 14 percent on ticket refunds in the event of a flight cancellation. Depending on the provider and business model, the approaches differ: While Compensation to go pays its customers the money immediately, i.e. for them in advance, the German market leader Flightright only pays the money in the event of success if the airline transfers the money to the customer Startup has transferred. If the customer claim cannot be enforced, the passengers usually do not have to pay anything. In the case of Flightright, the company then bears the costs for lawyers and Co. There is therefore no risk or additional cost for consumers.