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IATA: “Refunding Cancelled Tickets Is Almost Unbearable Financially Speaking”

Global airlines have warned that finances are so fragile they could not afford to refund customers... and obviously agents are having to try and keep the peace between both parties.

We’re sure by now you’ve spoken to numerous clients hoping for refunds and being offered airline credits instead. We’re sure you’ve also spent hours upon hours of your time on hold or being directed to three different departments of each airline you have bookings with.

So what’s actually going on?

With policies being updated and amended so often it can be hard to keep up.

Airlines have been offering vouchers and credits over refunds, due to their financial vulnerability at this time. The International Air Transport Association (IATA) has been issuing increasingly desperate messages about the state of the airline industry urging the governments to step in and assist carriers.

READ: Let’s Keep The Air Fair: Virgin Australia Launches Anti Monopoly Campaign

Director-General Alexandre De Juniac, head of IATA, stated that airlines are losing billions and burning through their cash reserves rapidly, therefore they could not afford to issue refunds and customers should accept vouchers instead.

“The key element for us is to avoid running out of cash so refunding the cancelled ticket for us is almost unbearable financially speaking,”
Director-General Alexandre De Juniac

However, rules in many parts of the world require them to refund customers.

“The obligation of airlines to provide refunds, including the ticket price and any optional fee charged for services a passenger is unable to use, does not cease when the flight disruptions are outside of the carrier’s control,”
U.S. Department of Transportation

IATA reported about $US35 billion ($56.5 billion) of tickets were due for a refund at the end of the second quarter, and vouchers or a delayed refund was all airlines could offer. Consumer groups are becoming increasingly angry at airlines for ignoring the refund rules and saying that passengers need the money just as much as the airlines do. However, it is important to note, that airlines are not obligated to provide refunds to people who cancel their own travel plans, which is a common situation many would-be travelers are finding themselves in.

Amid stay at home orders, travel warnings and restrictions, travelers who have canceled trips before the airline cancels their flight, find themselves forced to accept travel credits or vouchers that may expire before travel restrictions are lifted. Saying that, airlines such as Delta and United have now extended their credits into 2022, rather than the standard one year from purchase. IATA has been asking governments for a reduction of charges and taxes to help its members, which represent 82 per cent of global air traffic, survive, and for funds to help restart routes in future.

As agents, all you can currently do is everything you’re already doing; providing up to date information, with expert knowledge and excellent service.


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