A dozen EU member states have asked the European Commission to allow airlines to give vouchers instead of cash refunds for cancelled flights.
The group, which includes France, Ireland, the Netherlands and Portugal, issued a joint statement calling for a temporary amendment to consumer law because carriers "continue to incur high running costs" despite most planes being grounded due to the coronavirus pandemic.
Enabling airlines to issue vouchers rather than cash refunds would be "a solution for current cash flow constraints of airlines", they wrote.
The group called for a common level of consumer protection in relation to vouchers, including the right of reimbursement if a new booking is not used by the end of their validity.
Under the regulation commonly referred to as EU261, which continues to apply in the UK, passengers are entitled to a full cash refund within seven days after the cancellation of a flight due to depart from an EU airport.
It also covers flights operated by an EU-based airline from outside the EU to an airport within the bloc.
But many carriers are refusing to offer refunds or are not making payouts within the legal timeframe.
Rory Boland, editor of consumer magazine Which? Travel, said: "It's incredibly concerning that a number of EU member states are asking to temporarily suspend consumers' legal right to cash refunds for cancelled flights amid the coronavirus outbreak, not least when so many people are now in difficult financial situations of their own and need their money back.
"Not only would this move be bad news for consumers, it would be a disaster for tour operators waiting for payments to be returned by airlines in order to fulfil their own legal obligations to refund customers.
"The UK Government must urgently confirm that it will continue to support consumers' right to cash refunds, and step in with support for the industry to allow them to fulfil this legal obligation."
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