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Refunds to come slow as airline revenues choke

By Aneesh Phadnis
April 02, 2020 13:29 IST
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International airlines are offering affected passengers an option of refund, vouchers, discounts on future bookings, and the opportunity to hold tickets for up to two years following travel bans.

Travel agents are anticipating long delays in ticket refunds on account of a surge in requests and the stressed financial condition of airlines.

International airlines are offering affected passengers an option of refund, vouchers, discounts on future bookings, and the opportunity to hold tickets for up to two years following travel bans.

 

Refunds are being processed as per applicable rules, which could include a cancellation fee.

Travel agents, however, say there is an uncertainty over how soon the refunds would be paid.

“We do not know whether it will take one week, one month, or even longer,” said Rajat Bagaria, national joint secretary of the Travel Agents Federation of India.

Last week, travel agents, airline executives, and the International Air Transport Association (IATA) representative held a tele-conference on issues related to agents’ remittances and refunds.

Full service airlines give agents seven days to make payments for ticket sales.

In a normal scenario, agents deduct the refund amount while making their weekly remittance.

But in March, several airlines suspended this facility and asked agents to make separate refund applications that would be processed by their finance teams.

“Agents have not received the refund money from airlines.

"Customers who enjoy credit, too, have not paid and advances given to low-cost airlines are stuck as flights are suspended,” Bagaria added.

“Travel agents are handicapped and many will have to pay their March salaries out of their pocket.

"April is an even bigger challenge for agents, as there are zero sales,” said Madhav Oza, director of Blue Star Air Travels.

Cathay Pacific said the airline was receiving an increase in refund requests.

“While we endeavour to process refunds quickly, the process may take longer than normal.

"We have already started initiating refunds for passengers who have booked tickets through our direct channels,” it said.

An Emirates spokesperson, said: “Our teams are working round the clock to assist impacted passengers, and with the scale of our operations, there is a substantial backlog, that will take time to process.”

Lufthansa said reimbursements (refunds) remain possible in principle, but in the current situation it is not possible within the usual limits. The German airline is also offering a €50 discount on rebooking and an option to choose a new destination.

Photograph: Reuters

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Aneesh Phadnis in Mumbai
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