This sounds like a much more roundabout way to handle making a law that requires cancellations to give refunds within a timely manner.

Yup. And if you think airlines are slow to give refunds, wait until you've chased the general public for payment for services they didn't use and don't want to pay for! Which simply means substantially more expensive tickets, and people with bad credit don't get to fly.

And still the airlines will slowball on mandatory compensation where it's owed

Isn't this what escrow accounts exist for? The airline shouldn't hold your money in the interim, someone else does. If the airline cancels, you get it back, if you fly or otherwise breach the contract (no show, cancel your ticket) then they get it.

It's basically insurance at this point, but someone just has to set up a company that buys your ticket for you and handles the legal cases (eg they pay out to you and start a reconciliation process with the airline) in the event of a default from either side.

I'm generally against making regulations that introduce mandatory middlemen, unless absolutely necessary. It entrenches a type on company into a field while generally failing to allow them to be optimized away if a better solution is later found.

But as a general option that someone could create a company for, it sounds like a good idea if its profitable.

No, having money in holdings between transactions is as standard thing to do in many situations. Fully transferring the money with a “requirement” for a refund in a “timely manor” is what we have now. With some proper committing the money 6 months before takeoff, and not getting it back until the “timely” refund lands in their bank account 6 months after the flight is canceled.

Agreed. General consumer protection laws would cover this just fine, with the added benefit of applying everywhere, not just airlines. On the other hand, airline tickets are one of the larger priced things people tend to buy regularly, so maybe it anyways does make sense to single them out.

Germany already has General consumer protection laws. That’s why you get a refund a couple of months after the flight was canceled.

That still doesn’t make it ok that you might have a large sum locked for up to a year while they figure things out.

Sounds like your consumer protection laws could do with some updating.

Yes, that’s the point of the whole suggestion to not pay the tickets until checkin.

Isn't that something credit card companies support as well? I mean I presume you put some payment details down when you book your flight.

For most people, my guess is the solution would be credit card payment where at the time of booking they take a temporary hold on the card which is only actually charged once you board. Similar to how typically with online shopping your card is only charged once the item actually ships.

Putting a hold on the money due later is a standard practice already, happening with some of the hotel bookings as an example.

This is how I understood it to work. When you buy your plane tickets now, that money goes into an escrow account and stays there until you check-in for your flight and is not released until check-in happens. This is why airlines like you to do early check-in.