Ireland is among 12 countries who have written to the EU Commission asking for it to temporarily allow airlines to issue vouchers instead of cash refunds.
In a joint letter, the EU member States ask that current rules be amended to allow airlines to choose the means by which passengers are reimbursed.
The pandemic has seen most major airlines ground most or all of their flights temporarily due to the strict restrictions on movement in place in Europe and around the world.
EU law means airlines must offer refunds to passengers for cancelled flights as one of three possible options, although companies can offer vouchers if agreed with the consumer.
Some airlines have been encouraging customers to accept vouchers instead of refunds as part of efforts to limit the financial impact of the grounding.
Belgium, Bulgaria, Cyprus, Czech Republic, France, Greece, Ireland, Latvia, Malta, the Netherlands, Poland and Portugal have now signed a joint letter asking for a temporary change to the EU's consumer laws.
The dozen member states claim the current consumer regulations "could not have been foreseen" the current crisis, and that the airlines are now in a "difficult situation where they are facing a serious cash flow challenge".
They're calling on the Commission to 'as a matter of urgency' change the rules for now so that airlines can "choose the means by which passengers are reimbursed".
In the letter, the 12 member states write: "We believe that regulating the temporary issuance of vouchers is possible and acceptable for consumers, if some key principles are taken into account: transparent information to the passenger, non-discrimination, a common length of voucher validity, maximum flexibility of use and a clear right of reimbursement immediately at the end of validity in the event of non-use of vouchers.
"Moreover, as consumers are offered vouchers with a long-term validity, it is crucial to discuss ways to protect voucher owners against the risk of bankruptcy of the airlines that issued those vouchers."
While the EU has changed rules to allow airlines hold on to their 'airport slots' during the current grounding of flights, the Commission's transport chief Adina Vălean has previously ruled out changes to consumer rights.
Main image: File photo of Dublin Airport. Photo: Leah Farrell/RollingNews.ie