Do passengers get compensation during extraordinary events?

Read the full article below around what kind of assistance passengers can expect worldwide, what the mandatory regulations are around this, and what airlines can and do offer to go above and beyond to provide positive passenger experiences.

https://www.travelandtourworld.com/news/article/interview-of-tara-spielhagen-ceo-of-swiipr/

"In an exclusive interview, Tara Spielhagen, CEO of Swiipr, discussed the impact of the Microsoft Global IT outage on flight delay compensation. Spielhagen noted that Swiipr’s independent system remained unaffected, allowing airlines to issue compensation seamlessly. “Our platform’s resilience allowed passengers to receive immediate assistance despite the outage,” Spielhagen remarked. “We observed a 229% increase in payouts, underscoring the importance of flexible digital solutions in handling travel disruptions.” She highlighted Swiipr’s capability to provide reliable support, significantly enhancing customer satisfaction during unexpected events.

Travel And Tour World: How is flight delay compensation affected by extraordinary events like today’s global outage?

Tara Spielhagen : Under European Union regulations, passengers on flights beginning in the European Union or United Kingdom are entitled to compensation if their flight arrives at its destination more than three hours late. This also applies to passengers arriving in the EU or UK if they are travelling on an airline headquartered in those regions. However, these rules only apply to situations inside an airline’s control, not to extraordinary events. Early messages from airlines on last week’s outage suggested they were treating it as an extraordinary event and the UK’s Civil Aviation Authority has reportedly written to airlines stating it is of the same view. It appears very unlikely delayed passengers will be entitled to compensation under EU regulations, though they will still be entitled to assistance as airlines work to get them to their destination.

That being said, even if the airline isn’t governed by law to issue compensation, it can show significant goodwill by issuing ex-gratia payments, which greatly enhances customer retention and loyalty.

Travel And Tour World: What kind of assistance are passengers entitled to during extended delays in the UK and other European countries, even in extraordinary circumstances?

Tara Spielhagen: Even when a problem isn’t the fault of an airline, it still has to provide passengers delayed by more than two hours (three hours for long haul) with assistance during their delay. This includes a reasonable amount of food and drink, a means of communication, accommodation if they are delayed overnight and transport to that accommodation. In theory, airlines are meant to arrange this. In practice, in cases as disruptive as Friday’s, ground staff can be overwhelmed trying to book hotels and hand out paper vouchers and passengers sometimes end up paying out themselves and claiming the amount back from airlines at a later date, which adds a huge and unnecessary cost to the airline.

Travel And Tour World: How do airline compensation terms and conditions vary between the UK, Europe, and other countries like the US?

Tara Spielhagen: Though a family stuck sitting on the floor at Gatwick on Friday might not have felt there was much of a silver lining to their situation, United Kingdom and European Union passengers in fact have it pretty good compared to many other areas of the world. In the United States, it wasn’t until April this year that the United States Department of Transport passed a law mandating that airlines have to refund passengers if they cancel or significantly change their flight. Prior to this, passengers were at the mercy of each airline’s policy and terms and conditions, and largely this remains the case when it comes to any assistance they are entitled to during delays. Similarly, in Australia, passengers’ rights are heavily dependent on airline terms and conditions, especially when it comes to events outside an airline’s control.

Travel And Tour World: Can you explain how Swiipr assists airlines in providing compensation to passengers whose journeys have been interrupted?

Tara Spielhagen: Swiipr allows airlines to provide instant compensation payouts to passengers whose journeys have been disrupted. They can either give a passenger a physical or virtual prepaid card that can be added directly to a customer’s mobile wallet via Apple Pay or Google Pay. Because they are partnered with Mastercard, Swiipr cards can be used at all outlets inside and outside of an airport, without being restricted to certain retailers or point of sale technology. They can be used for food and beverage payments during delays and larger compensation payments such as for lost baggage, denied boarding, regulatory compensation or hotel or transport payments.

Airlines are in control and the system is very secure; neither physical nor virtual cards have any value until loaded by airline staff at the point of delay or disruption. Airlines can also set their own parameters for where the funds can be used, for example, food and beverage outlets only or expanding this to hotels, taxis and other services, as well as the length of time they are valid for.

One thing that’s unique about Swiipr’s platform is that it has compliance built into it, so ground staff don’t have to work out themselves what each passenger is entitled to; Swiipr automatically incorporates the regulations that apply and each airline’s policies, tailoring this to each individual passenger, for example, by their class of travel and their country of origin. One can only imagine how stressed a ground agent at Atlanta, the world’s busiest airport and a hub for connections for all over the world, would have been last weekend. An international airline would likely have had passengers stuck there whose journeys originated in many different parts of the world, meaning they were entitled to different assistance.  

If that airline was using Swiipr, the ground agent would not have needed to think about who due what as it would have been calculated automatically with funds was issued instantly. The finance department would not need to handle lots of insecure, error-prone and manually intensive bank transfers, sign cheques, handle cash or reconcile vouchers. The business would not have to worry that they made a bad situation worse by making the claims process so customer unfriendly and lengthy that it could end up with a loyal or litigious customer, or an influencer or journalist, sharing the story of their bad experience and reaching millions across social media.

The above are some of the many features attracting major airlines to Swiipr. It is currently being used by 26 airlines across 70 countries, including a major flag carrier whose 4,000 staff are utilising the platform in over 167 of its airports globally.

Travel And Tour World: How has today’s global outage impacted Swiipr’s compensation payout activities, and what increase in payouts have you observed?

Tara Spielhagen: The great thing is, Swiipr’s systems can run independently of an airline’s system and therefore were not impacted at all by the Crowdstrike outage. Airlines were able to give out Swiipr cards and wallet funds as normal. Where they had their own IT issues, they were able to call Swiipr, which is able to load cards remotely, thereby bypassing an airline’s IT system. The data we have gathered since the outage suggests there has been a 229% increase in Swiipr compensation payouts issued by our airline partners.

Travel And Tour World: What are the advantages of Swiipr’s digital compensation system compared to traditional paper vouchers or barcodes?

Tara Spielhagen: For passengers, the benefits are obvious. As well as using antiquated paper-based systems reliant on physical hardware and lengthy queues to hand them out, legacy providers typically have deals in place with only some of the outlets in any given airport. In contrast, passengers given Swiipr funds can use them anywhere that accepts Mastercard, both inside and outside an airport. Swiipr supports split purchases so, for example, passengers can grab a drink at one point and then opt for food later or at a different outlet. The cards are also reloadable, so if a delay goes on longer than first anticipated, the airline can add further funds.  

Paper vouchers are passenger unfriendly, retailer unfriendly and importantly in this day and age, environmentally unfriendly.  

For airlines, they are also time consuming to issue and prone to fraud. Our research and work with airlines suggests that using Swiipr can cut airline claim processing costs by circa 60% across back office, finance, customer service and ground operations. Swiipr also provides detailed transaction reporting, which is available as soon as a flight has departed. Spend data from legacy systems typically takes 60-90 days to make its way through to an airline’s finance department.

When you think about how much the world has digitally transformed in recent years, it seems incredibly old-fashioned for airlines to still be handing out pieces of paper, especially when they are digitising so many other parts of their operations – from check-in to luggage.  

The need for change is particularly pressing when we consider the scale of the issue, with 500 million passengers a year suffering air travel disruption and needing food and refreshment vouchers. They may also require flight compensation, with that related to EU regulations having risen by 326% since 2016.

Travel And Tour World: Despite the outage, how have Swiipr’s systems continued to support passengers in using their compensation funds at various outlets?

Tara Spielhagen: Due to its unique architecture, passengers would have been able to use any funds they were given by an airline even if some retailers and hospitality outlets in their airport went down, as news reports suggest they did. Swiipr funds can essentially be used like money, so if one coffee shop’s payment systems are down, they can use it at any other one.

Swiipr funds can also be used outside the airport, which would definitely have come in handy last week. If airlines were overwhelmed and didn’t have the staff to physically book hotels for stranded passengers, they could have issued Swiipr funds and passengers would have been able to pay hotels directly. The same goes for other services they may have needed, such as taxis. This saves time and money for both airline employees and passengers, who would have otherwise had to claim these funds back retrospectively.

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