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Covid-19 Italian restrictions and the aviation industry

In Italy, the COVID-19 pandemic exploded at the end of February 2020 and in a few days the Italian Government issued many emergency legislation aimed to limiting the spread of the virus.

With the emergency decrees we witnessed the derogation of Constitutional rights such as personal freedom (Article 13 of the Constitution), freedom of movement and establishment (Article 16 of the Constitution) and freedom of assembly (Article 17 of the Constitution). Discussions are still open and heated on the validity of government decrees that temporarily overruled national and international laws during the health emergency.

Since the beginning of the pandemic many international and domestic flights were cancelled both because of the State travel bans to protect health and safety and the lack of consumer confidence in air travel. The impact on the aviation industry was devastating. In April 2021, the Italian Civil Aviation Authority confirmed that in 2020 the Italian airport system lost 140 million passengers with respect to 2019, the customer traffic decrease was of 72.6%.

To date, there are still open issues to be solved which implies uncertainty in the handling of passengers claims.

Time bar limitation according to Montreal Convention 1999

Article 35 of MC99 clearly limit the right to claim damages in 2-year, reckoned from the date of arrival at destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped.

With several emergency decrees (no. 11 of 8 March 2020, no. 18 of 17 March 2020 and no. 23 of 8 April 2020, confirmed by Law no. 40 of 5 June 2020), the Italian Government, suspended for 64 days from 9 March 2020 to 11 May 2020 (both days included) the civil Courts activity, save for few urgent matters. During such period, any kind of statute of limitations ("prescrizione" and "decadenza") was suspended (if the claimant right can be exercised exclusively through civil action).

Does this suspension impact on Art. 35 MC99? Apparently not, as the 2-year period is a long extended term and Italian Courts in a similar circumstance – the Court summer recess of 31 day – 1 to 31 August each year – have ruled that the Court summer recess has not to be taken into consideration for the two-year Art. 35 MC99 time limitation. The reasoning of these decisions is that the plaintiff has still a sufficient time to commence civil action, but Courts have reached different decisions for shorter terms.

However there are no yet rulings to exclude the interaction between the COVID-19 and (?) 64 days extraordinary suspension. This could create uncertainty in the handling of Italian passengers complaints and passengers lawyer will most certainly raise the issue.

Flight cancellation: vouchers or reimbursement?

To face the emergency situation and last minute cancellations of flights and tourist packages following flight/movement restrictions and to avoid the spread of the pandemic, the Government provided that within 30 days from the cancellation, requested by the passenger, the airline or the Tour Operator/hotel shall reimburse the flight ticket or the hotel price or, alternatively, issue a voucher valid for 12 months from the issuing date.

In case of flight cancellation, the airline should immediately inform the passenger and could alternatively decide to reimburse the ticket cost or issue a voucher valid for 12 months.

The validity of the vouchers was extended to 18 months even for already issued vouchers and it was provided that – within 12 months from the flights, and within 18 months from the hotel the stay – the passenger could opt for the reimbursement in case the voucher is not redeemed.

The above is in contrast with (i) EU Reg. 2015/2302 on travel packages and (ii) EU Reg. 261/04 which does not provide for the airlines the choice between reimbursement or voucher (unless the passenger agrees to the voucher).

According to EU Commission recommendation 2020/648 of 13 May 2020, on 27 May 2020 the Italian Antitrust Authority clearly stated that the Italian emergency legislation is not compliant with domestic and European law related to consumer and passenger protection. It also clarified that when only a voucher, and not the reimbursement, is offered to the passenger, the Authority will intervene for the application of the EU legislation, thus derogating domestic law, if not compliant.

On 13 April 2021, Italian Civil Aviation Authority (ENAC) confirmed that in case (i) the airlines do not provide for refunds in case the voucher is not redeemed in 12/18 months, (ii) there are difficulties in reaching the concerned carrier by email or telephone and (iii) Refund Application Authorization is suspended and no reply is given to the agent's request in 7/12 months, the airlines are requested to immediately comply with the provision in force and ENAC will forward the aforementioned violations to the competent Antitrust Authority for the assessment and possible application of sanctions for consumer rights violation.

The Italian Antitrust Authority Fines easyJet for Flights Cancelled Due to COVID-19 Pandemic

Last year several national and foreign carriers cancelled flights in Italy due to COVID-19 Pandemic emergency restrictions, also when such restrictions imposed by the Italian government were no longer in force. Upon notice of Italian Consumer Associations, the Italian Antitrust Authority (AGCM) started investigation proceedings against the airlines regarding the following complaints:

  • the airlines offered only a voucher for the flights cancelled, but no reimbursement in cash of the ticket price as alternative, thus violating passengers' rights provided by EU Regulation 261/2004;
  • the airlines did not duly inform the consumers about the cancellation and their rights in case of cancellation;
  • the airlines did not provide adequate assistance to the passengers in such period. It was very difficult to contact the customer services of the airlines for free (sometimes high communication charges – e.g. telephone costs – were paid by the consumer).

Alitalia, one of the first carriers under investigation, as well as Volotea changed at the end of July 2020 – with the aim to avoid interim measures threatened by the interim sub-proceedings contemporarily started against the two carriers by AGCM – their passenger information regarding the cancelling or the rescheduling of flights and limited the cancellation of flights due COVID-19 Pandemic emergency restrictions only to those flights which could not be operated due to existing travel restrictions.

The main investigation proceedings against Alitalia terminated only in January 2021 with the acceptance by the Italian Antitrust Authority of the amended undertakings of Alitalia regarding due passenger information on cancellation, vouchers, and reimbursements, as well as the improvement of the customer services and the offer of new free communication channels.

In the meantime, investigation proceedings for the same reasons were opened by the Italian Antitrust Authority against easyJet, Ryanair, Blue Panorama and Vueling in September 2020. The proceedings against Blue Panorama and Vueling ended respectively in February and April 2021 with the acceptance by AGCM of the undertakings submitted by the carriers.

easyJet instead submitted undertakings which in the end were considered insufficient by the Italian Antitrust Authority. In particular, the Italian Antitrust Authority contested that easyJet has cancelled a very high number of flights in the period June – October 2020, allegedly due to COVID-19 Pandemic emergency restrictions, even though these were no longer existing, and has offered only the postponement of the flight or vouchers to the consumers instead, in the alternative, the repayment of the ticket price in cash. Moreover, during this period consumers were insufficiently informed and could reach the customer service only by phone and not free of charge. On 20 April 2021, the Italian Antitrust Authority considered this an unfair commercial practice and therefore fined easyJet in the amount of Euro 2.8 million already taking into consideration the extraordinary economic situation during the last year and the improvements by easyJet as of October 2020, which were however considered late and insufficient in respect to the other carriers. easyJet can still challenge the decision starting proceedings before the administrative court of Latium.

The proceedings against Ryanair and Volotea are still pending.