The Bottom Line
- Airlines Bear the Cost: Airlines cannot retain payments for flights that were part of a package tour justifiably cancelled due to “extraordinary circumstances” like the COVID-19 pandemic, even if the flight itself operated.
- The “Linked Contracts” Principle: The termination of a package tour agreement automatically voids all of its component parts, including the non-refundable flight contract. An airline’s standard cancellation terms cannot override this principle.
- Right of Recourse Confirmed: Travel agents and tour operators, who are legally required to refund customers in full for cancelled packages, have a confirmed right of recourse to recover the flight portion of that refund directly from the airline.
The Details
The Amsterdam Court of Appeal has overturned a lower court decision, ruling that Transavia must reimburse a travel agent (Prijsvrij) for flight tickets that were part of package tours cancelled during the COVID-19 pandemic. The case centered on trips booked for 2020-2021 to destinations under a “code orange” government travel advisory. Passengers cancelled their package tours under a legal provision allowing free cancellation for “unavoidable and extraordinary circumstances.” Prijsvrij, as the EU-based reseller for a Swiss tour operator, was obligated to provide full refunds to these passengers and subsequently sought to recover the flight costs from Transavia. The court’s decision hinged on the principle of linked contracts: a package tour is not a series of independent agreements but a single, interconnected product. Therefore, the legitimate cancellation of the package tour also terminated the underlying air transport agreement with Transavia.
The court’s reasoning provides crucial clarity on liability under the EU Package Travel Directive. This directive intentionally makes the tour operator or agent the single point of liability for the consumer to simplify the refund process. However, it also explicitly grants them a right of recourse against the underlying service providers. The court found that both Prijsvrij (under package tour law) and Transavia (under its terminated contract) were ultimately obliged to refund the passenger for the flight. This created a situation of joint liability. Since Prijsvrij had already settled this entire debt with the passenger, it was entitled to recover from Transavia the portion that was the airline’s responsibility—in this case, 100% of the ticket price.
This ruling dismisses several key defenses from the airline. Transavia argued that many of the flights did operate and that its terms and conditions specified that tickets were non-refundable. The court deemed this irrelevant, stating that the issue was not a simple passenger cancellation but the termination of an entire package tour under exceptional circumstances. The fact that Transavia chose to operate near-empty flights was its own business decision and could not be held against passengers who were strongly advised by the government not to travel. This ruling establishes that the financial risk of such systemic disruptions, for the air travel component of a package tour, ultimately rests with the airline, not the travel agent or the passenger.
Source
Gerechtshof Amsterdam
