The most persistent misunderstanding in flight compensation is the belief that a refund and EC261 compensation are the same thing, or that receiving one means you cannot claim the other. They are entirely separate legal entitlements, arising from different parts of the regulation, and in many disruption scenarios you are entitled to both.
What is a refund?
A refund under EC261 is the return of the price you paid for your ticket, or the portion of it that corresponds to the part of your journey you did not complete. It is the airline returning your money because it failed to deliver the service you purchased.
The right to a refund arises when your flight is cancelled and you choose not to accept rebooking. In this situation, the airline must return the full ticket price within seven days. If you have already completed part of a multi-leg journey and the remaining flights no longer serve any purpose, you can claim a refund for the unused legs plus, if relevant, a return flight to your original point of departure.
What is compensation?
EC261 compensation is a fixed-sum payment (€250, €400, or €600) that recognises the inconvenience caused by the disruption. It is not related to the price of your ticket. A passenger who paid €29 for a Ryanair flight receives the same compensation as someone who paid €290 for the same route with a full-service carrier.
Compensation applies to delays (3+ hours at arrival), cancellations (with less than 14 days' notice), and denied boarding. It is your right regardless of whether you ultimately travelled, received a refund, or accepted rebooking.
How they work together
| Refund | Compensation |
|---|---|
Return of your ticket price |
Fixed amount: €250/€400/€600 |
Only if you choose not to fly |
Regardless of whether you flew |
Must be paid within 7 days |
No statutory payment deadline |
Amount depends on ticket price |
Amount depends on flight distance |
Consider a practical example. Your €350 flight from Amsterdam to Lisbon is cancelled the day before departure. You decide not to accept rebooking because the cancellation ruins your plans. You are entitled to a full refund of €350 (the ticket price) and EC261 compensation of €400 (the distance-based amount for a flight under 3,500 km). The total owed to you is €750.
If instead you accept rebooking on an alternative flight that arrives 5 hours later than your original schedule, you are not entitled to a refund (because you flew), but you are still entitled to the €400 compensation for the disruption.
Don't let airlines conflate the two
A common airline tactic is to offer a refund and imply that it covers everything you are owed. They may present it as a generous resolution, hoping you will not realise that compensation is owed separately. Similarly, an airline might pay compensation and suggest this covers the ticket price. It does not.
If an airline offers you a refund after a cancellation, accept it (you are entitled to it), but follow up separately for your EC261 compensation. The two claims can run in parallel.
Watch for waiver clauses
Some airlines include language in their refund forms suggesting that by accepting a refund, you waive further claims. Read carefully before signing anything. Your right to EC261 compensation exists independently and cannot be waived through a refund process unless you explicitly agree to it.