KLM canceled a flight from China back to Europe that we had already requested a refund for. Are we entitled to compensation or just refund?

Question

Due to the coronavirus KLM canceled all flights from China about a week ago. Naturally we are entitled to a full refund. According to European Union air passenger rights, passengers are also entitled to up to €600 Of compensation in the case of a canceled flight. However, we requested a cancellation of our tickets five days before they announced the cancellation of our flight but after it became public that China closed down Wuhan with the risk of other cities. So we wanted to leave as early as we could. KLM had given notice that they offer rebookings and cancellations at that time.

Are we therefore also entitled to a 600€ refund Or would we have had to first give KLM the chance to offer us an earlier flight before booking a flight with another airline and canceling theirs? Or should we have waited 5 days until they cancelled the flight to be entitled to receive both the refund + compensation?

So in short, what does the compensation depend on? Also, does the corona virus qualify for the airline to waive the compensation penalty because it’s an “extraordinary circumstance” in the legal sense?

Edit: the cancellation & approval of the refund claim of my ticket came into effect yesterday, 5 days after the flight would have taken place. We received no confirmation of cancellation neither for our specific request nor any warning of the airline itself that the flight was cancelled in general. This suggests that they A cancelled our tickets and therefore B didn’t consider us a passenger anymore at the time of cancellation. Still, it’s odd that they never gave us confirmation of the ticket cancellation. Just a “pending approval for refund request” state.

Answer 1

The airline did NOT cancel your flight. They cancelled a flight that you were not booked on at the time of the cancellation. It is as simple as this. You were not booked on the flight, so you are due no compensation.

IF you had not already canceled your tickets, and you were still booked on the flight at the time of the cancellation, then you might have been due compensation under EU261, but it's very likely that the airline would consider an epidemic to be "extraordinary circumstances" which removes the need for the airline to provide compensation.

Addition to address the update to the question : Simplistically speaking, airline bookings have two parts - a "reservation" which covers the booking on specific flight segments on specific days, and a "ticket" which basically shows that you have paid for those flights. When you book a flight, first a reservation is created, then you pay, and then a ticket is issued.

When you cancel flights, the reservation of those flights is cancelled. At that point, you are no longer booked on those flights, although you still potentially hold a ticket. This will happen immediately that you ask for the flights to be cancelled, as the airline wants to be able to free up the seats so they can sell them to someone else. No refund will be made as a part of cancelling a reservation.

At this point, you hold a ticket that states you've paid $X for, but which contains no flight segments as they have been cancelled. Depending on the airline, the actual ticket you purchased, and any special conditions the airline might allow (such as allowing refunds during an event like an epidemic even if the ticket doesn't normally allow refunds), the value on that ticket might be lost entirely, might be only able to be used to book a future flight, or might allow a refund.

In order to actually get the refund, whoever issued the ticket (which might be the airline you were flying, another airline, or a travel agency) will need to cancel it and process the refund back to you. This is a separate step in the process, and it could happen hours, days, or even months after the reservation was cancelled.

However none of that changes the fact that once the reservation has been updated, you were no longer booked on that flight, and thus no longer due compensation.

Answer 2

First off, let’s see what the EU261 regulations say about compensation:

Air carriers should compensate passengers if they fail to do this, except when the cancellation occurs in extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken.

That does not necessarily mean you are not due compensation, because it depends on what constitutes an “extraordinary circumstance” and that is not defined in the regulations - as such, it would take a court case or a regulatory ruling for any interpretation of the definition to have legal weight.

However, we do have claims companies that are considering cancellations due to cornonavirus as an extraordinary circumstance and thus not due for compensation.

So if claims companies are taking that stance...

Secondly, the situation of you having cancelled your tickets. If you had actually cancelled your tickets with KLM and received acknowledgement to that effect before the airline cancelled the flight, then you no longer have any contract with the airline that would affect you - you would not be eligible to claim compensation even if the flight was delayed or cancelled for an eligible reason.

If the requested cancellation was pending at the time the airline cancelled the flight, I wouldn’t be surprised if the airline refused your claim (assuming the cancellation reason was eligible for compensation) but it would be worthwhile to put a claim in to see in that scenario.