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As Ryanair grounds its European airfleet and mothballs its customer service lines, customers say they are being gouged to rebook cancelled flights.

The airline has been accused of charging passengers more to rebook flights than buy new ones.

In some cases the airline was charging $160 for changing cancelled fares, in spite of a promise of "fee-free" cancellations.

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The Irish low-cost airline was forced to cancel thousands of flights after countries including Hungary and Bulgaria closed their borders. However panicked passengers rearranging travel were met with a fare hike and forced to pay the difference.

Consumer advocates Which? reported that one passenger trying to replace a flight from Dublin to Malaga was quoted $250 per seat for a later flight in August. However, checking the Ryanair website, the same fare was listed for just $90.

After the closure of European and UK airspace to all but essential repatriation flights, airlines have been accused of making it virtually impossible to get refunds for cancelled flights.

The airline is yet to respond to claims that it is hiking fares for rebooking customers.

The EU's consumer protection for "denied boarding" rules require airlines to supply refunds or rerouting when flights are cancelled. However, cancellation fees and inflated charges by companies such as Wizz Air and RyanAir have flouted the system, reports Which?.

Passengers are being directed to arrange refunds through customer services, who are no longer operational.

On Tuesday, Ryanair's CEO Michael O'Leary published an open letter declaring that all flights were grounded and it would be reducing office staff by 50 per cent for "social distancing reasons".

For this reason they ask passengers not to call their phone lines and that they will be "unable to accommodate anything but the most urgent of cases."

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O'Leary said that passengers with cancelled flights will be contacted with their options within the next fortnight.

Although most of the fleet will be grounded some air staff will be needed to continue with repatriation flights.

"We will continue to work with EU governments on rescue flights to return stranded passengers to their home country."

Covid19.govt.nz: The Government's official Covid-19 advisory website