State may cover travellers’ losses

Bookmark and Share

Around 200,00o Norwegians still haven’t been reimbursed for airline tickets and holiday tour packages they purchased before the Corona virus cancelled most all travel abroad. Cash-strapped airlines and travel organizers aren’t readily refunding their customers’ money, which amounts to billions of kroner in Norway alone, but now the state may cover customer losses if the airlines or package tour firms go bankrupt.

Norwegians usually travel by the thousands every year to spend holidays on beaches like this on Crete. The Corona crisis has cancelled most all travel, though, leaving airlines and tour companies strapped and consumers not getting their money back. PHOTO: Wikipedia Commons

“They (the would-be travelers) will get their money back,” Trade Minister Iselin Nybø of the Liberal Party  said on state broadcaster NRK’s Debatten program back on May 14. “They just have to accept waiting a bit longer.”

She was assuming a state travel guaranty fund (Reisegarantifondet) would pay out money owed in the cases of bankruptcy, but newspaper Dagens Næringsliv (DN) later reported that may not be so. Now Nybø is telling DN that if the fund “falls for a narrow intepretation” of its obligations, consumers may get their money back “through other means.”

“The government is following the situation closely,” Nybø wrote in an email to DN, “and will evaluate several measures if many travelers don’t get their claims covered in the case of travel arrangers’ bankruptcies.”

Travel insurance firms deluged
Three months after most airlines stopped flying and travel abroad was halted, thousands of consumers still see no sign of any refunds. NRK reported on Tuesday that travel insurance companies are being deluged with requests for reimbursement, too.

When a trip is cancelled, it’s generally the arranger of the trip that must refund the money. Many frustrated travelers, however, find themselves being referred back to their insurance or credit card companies, “and they feel like they’re being thrown around in the system,” Andreas Bibow Handeland of travel insurance firm Europeiske reiseforsikring told NRK. Travel agencies, meanwhile, have complained that airlines have been refusing to reimburse flights, offering only travel at a later date instead. That, the agencies claim, is in defiance of European regulations.

“It does take time to get back the money they can demand refunded,” Handeland added, “but many experience that they’re even unable to get in contact with the airline or travel firm.” The travel insurance firms, meanwhile, are only liable for refunding what the airlines or travel arrangers don’t have to reimburse, and details can vary according to the terms of travel.

Europeiske had itself been presented with 48,000 demands for reimburse by May 6, and that’s increased considerably since then. Norwegian insurer Gjensidige reports 35,000 demands, Tryg 37,000 and Fremtind 57,000. In addition come all the smaller travel insurers.

‘Too little, too late’
Ivar Horneland Kristensen, chief executive of employers’ organization Virke, is unimpressed by the government’s reaction. “It’s a positive signal, but it’s too little, too late,” Kristensen said. “The trade minister should have a policy in place for the travel industry and its 170,000 jobs, and make sure it survives this crisis.” He wants Nybø to solve the crisis facing 900 package tour firms in Norway by making money available so they can refund their unhappy customers’ claims (also estimated to amount to around NOK 3 billion). The money could then be used by the Norwegian consumers to pay for substitute holidays in Norway this summer.

Kristensen was also alarmed that Nybø sent out a press release last week citing two surveys that suggested the travel and retail industries could “see light at the end of the tunnel,” while the outlook was bleaker for other industries.

“Doesn’t she understand how serious this is?” Kristensen queried. “Yes, there’s a bit of light, but half the workforce is still laid off and one of three companies is considering cutting jobs.” Several others in the travel industry were provoked as well, and when presented with their criticism, Nybø claimed she was painfully aware that Corona virus containment measures and travel restrictions have hit the travel industry very hard.

“The most important thing we can do now is contribute with measures that stimulate reopenings and more operations, so that travel firms can get more customers and revenues,” she told DN. “We’re doing that by enhancing benefits that make it easier to get people back to work, and by strengthening local municipal business funds to help local businesses.” She claimed the surveys from Menon Economics and Oslo Economics concluded that the travel industry would “probably normalize in 2021. That’s a bright point, even though it probably won’t apply to everyone.”

NewsInEnglish.no/Nina Berglund