The fight for airline refunds is heating up.
Airlines are desperate to hold onto their liquidity in the face of an unprecedented grounding of aircraft due to the coronavirus pandemic, but this means that cash-strapped consumers unable to take their vacations are not receiving the refunds that they are due.
Yesterday, IATA said in an open letter to travel agents that airlines deserved flexibility.
"We believe the best answer for both airlines and travel agents is for regulators to ease requirements for cash refunds and allow airlines to issue vouchers instead," read the letter. "...This would remove the pressure that is currently on agents to issue cash refunds at a time when airlines are making decisions based on their own need to preserve cash. IATA is willing to engage in open and collaborative discussions with the travel agency community represented in the Passenger Agency Programme Global Joint Council to formulate a structure for these vouchers that will bring value for airlines, travel agents and consumers."
However, earlier today, the Department of Transportation (DOT) ordered airlines to pay out refunds for canceled or severely delayed flights rather than giving out vouchers.
"The longstanding obligation of carriers to provide refunds for flights that carriers cancel or significantly delay does not cease when the flight disruptions are outside of the carrier's control," said the DOT's order. "The focus is not on whether the flight disruptions are within or outside the carrier's control, but rather on the fact that the cancellation is through no fault of the passenger."
ASTA supports the decision of the DOT saying in a statement that it is a "first step in the right direction."
The organization called on airlines to follow the order and provided several ways to move forward:
-Relaxing existing fare rules to accommodate requested refunds for any flight through the end of 2020
-Refraining from issuing agency debit memos for credit card chargebacks on canceled flights/trips for which the airlines are refusing refunds today
-Ensuring travelers who have booked through an agency are advised to contact their advisor to process refunds and exchanges rather than directly on the carrier's website
-Ensuring all tickets are fully refundable and not merely credited for future travel
-Permitting travel advisors to process all refunds via their GDS and ARC
-Protecting original agency commissions/incentives on air bookings should the tickets be exchanged or rebooked
-Protecting advisor commissions on refunded tickets
-Confirming and/or clarifying that penalty charges or change fees will not apply for canceled or rebooked flights during the current crisis
-Providing travelers the opportunity to use any credit issued for unused tickets for a minimum of two years from the original departure date
-For those tickets booked on or after March 1, extending the window for rebooking flights to a minimum of one year from date of travel with no change fees
-Ensuring that ancillary fees for any flight booked in 2020 that is subsequently canceled are fully refunded to the traveler
ASTA points out the value of the travel agency community to air carriers in its statement, noting that the U.S. travel agency community generated $97.4 billion in ticket sales in 2019 and that an additional $84.6 million was generated in ancillary fees.
"Clearly, the U.S. travel agency community represents an extraordinarily significant source of revenue to the airline industry, and as such its views on the harsh impact these refund and exchange policies have on both advisors and the traveling public should be given the most thoughtful and serious consideration," ASTA's statement noted. "Doing so will help promote and solidify brand loyalty as the agency and airline world continue to align and grow in support of the traveler in a post-pandemic world."
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