As Airlines Seek Bailouts, Their Trade Group Seeks Ability To Deny Refunds

In Europe consumer protection rules normally require substantial cash compensation to passengers when flights are cancelled. However the EU recognized that in the current pandemic those rules don’t apply. Customers who flights are cancelled due to government regulation, or because airlines are scaling down due to lack of demand, won’t receive normal payments.

IATA, the International Air Transport Association – the international trade association for airlines, currently led by the former CEO of Air France KLM – says this isn’t enough.

They also want EU rules relaxed so that they do not have to provide extensive “care and assistance in the event of cancellations” during the pandemic and the airline trade group doesn’t think airlines should have to refund a customer’s money when flights are cancelled.

Airlines around the world are seeking government bailouts – they want customers and even who don’t fly to pay – at the same time they want to keep customers’ money while not delivering the product that was purchased.

They want airlines to be able to offer rebooking onto other flights, or travel vouchers, and not refunds when a customer’s flight is cancelled. Their argument is precisely that airlines need the cash, so should be entitled to keep it.

IATA speaks for the world’s airlines. As governments prepare to bail out airlines, who speaks for you?

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. I just sent a letter to my senators basically requesting that the industry not get a single penny if they don’t tie it to meaningful restrictions forcing refunds or, at a minimum, a credit good for a certain time measured from the date of the flight and not the date of booking. It unconscionable what they are doing to keep consumer money while simultaneously asking for taxpayer rescue after their fiscal mismanagement.

  2. This is nuts not give a passenger a refund when their confirmed flight is cancelled (for any reason)!

  3. Most airlines mention refunds for flight cancellations on their CoC. If they don’t want to follow their own CoC now, why have they been enforcing the rules when passengers needed help with a change or cancellation in the past? It’s not like every passenger they screwed over with their CoC had a lot of money too.

  4. Their healthy balance sheets and reserves would evaporate quickly if they had to give refunds on non-refundable fares.

  5. They should get creative. Your $300 flight gets cancelled. Offer a refund or a voucher worth $400. Or $300 voucher plus 15k miles.

    I bet many would take the extra voucher….as long as they were able to be used even if the airline goes bankrupt.

  6. If an airline does that, i will speak with my wallet. I will make a point of never flying them again. I am already getting screwed by some tours-one that is even covered through EU rules -that has not even bothered to answer me.

  7. I’m cool with a voucher. I plan to travel again. I am a nurse. I have cared for & lived to tell thru many epidemics (HIV, SARS, swine flu, etc.) not to mention patients with drug resistant bacteria, tuberculosis, & various forms of hepatitis. I’m getting old now so my immune system may not be as active. Yet…just another disease to me. Not to be dismissive of the power of pathogens I wash my hands, practice infection control, & stay calm.

  8. Corona Virus has impacted our plans to travel to Antigua for our wedding during a weekend in April.. We’re able to rebook at Sandals… but American Airlines is charging excessive rescheduling fees… $200/person + the difference in airfare. We have about 30 relatives and guests involved. AA requires travel within one year of ticket issuance… we booked our wedding in August…. but we’re afraid to reschedule this summer with worries that Corona virus may still hinder travel abroad. Furthermore, the US Government strongly advises against travel out of the country. Yet our flight still isn’t cancelled!
    Some of our guests… including my fiancé and I booked with JetBlue. They are doing the right thing and allowing us to bank the money we paid for our trip for one year. This allows for rescheduling! We’re trying to rebook for January or February of 2021. Im not sure what can be done…. This is a terrible time… Big companies, small business owners need help. And so does the individual. We just want to be treated fairly. (AA clearly states that if travel does not take place within one year of ticket issuance… the fare is lost! That’s over $400 per couple).
    How do we get assistance ? American Airlines won’t take our calls… only if you’re flight is scheduled within 72 hours.

  9. @ Texasilver – Vouchers are useless if they expire before they can be used. AA, for instance, has this:

    “Travel must start by December 31, 2020 or within 1 year of date the ticket was issued, whichever is earlier.”

    For anyone who booked last summer, there may be no flights and nowhere to go before their flight credit expires.

  10. I took a voucher from Virgin Atlantic earlier in the week. The choice was a refund or a Voucher where I need to rebook before end of 2020 and travel by end of March 21 + a whole pile of miles or club access for a year or a debit card for $100.

    I have no problem leaving my money with them as I will rebook with them before the end of the year. I thought it was good that they were offering incentives for me to take a voucher. I know this wouldn’t suit everyone – it’s fine for me.,

  11. This is a rough time but companies and people are trying to profit off of it as well. We all know that Boeing’s problems aren’t due to the virus but due to years of management incompetence and greed.

    I’m a bit concerned about vouchers and credits since whenever things start returning to normal, and I think it will be a long time, airlines are going to be slow to ramp up since they will want to get fill seats of planes, so you may have a number of vouchers/credits looking for limited seats and flight options.

    I think a few (hopefully very few) people are booking cheap flights now, and canceling them for credits to use later (i.e., snag a bargain) but may get burned when they can’t find seats.

  12. @rich — it’s only the change fee they’re waving. If there is a difference in ticket price you need to pay the add/collect on the ticket price difference. So if they cut service and then hike the prices on limited seats we’ll end up having to pay anyway — it’s lose/lose.

  13. According to the current published schedule, Delta Airlines has cancelled my AUS-AMS roundtrip FLIGHTS next month but has not cancelled my reservation or rebooked me. They have placed a message on my reservation board that I CAN CANCEL MY FLIGHT AND RECEIVE A VOUCHER and rebook. Of course all flights are now a lot more expensive but Delta graciously offers me the opportunity to pay over TRIPLE my ticket price, at a later date. I paid cash USD for my Delta One “first class” seat and WAS in the process of shifting my business from AA to DL. I’m thinking that brand loyalty for me may not be as wise a shopping an airfare. Before you jump in my **** I do realize that the problem is not of DL making but they have the solution and are apparently not willing to use it.

  14. Shame on them! Do they think we (their customers) do not need the cash they paid returned to them when many are out of work and only guaranteed at best 2 weeks paid leave? Shame, shame. If I learned anything with this situation it is NOT to make my travel arrangements very far in advance which is what we’ve done in the past. That is over and done with!!

  15. Gary,

    I think the airlines are getting quite upset with you wanting them to follow the law.

    ++++ to David telling Congress the airlines should not get money. Give it to the AIRPORTS

  16. If the airline cancels a flight the customer is not getting what he or she paid for and a full refund must always be one of the options. If the airline doesn’t have the money maybe they can sell back some of their stock they repurchased – or claw back part of the CEO bonus. If this is not done then NO bailout should be given.

  17. I booked a flight LHR-DEN on UA using Lifemiles, and 2 days later discovered–through Gary’s VFTW, no less–that the flight was going to be canceled. I called Lifemiles to reschedule the canceled flight to another operational flight (tomorrow, in fact), and I was told that if I wanted to change the canceled flight, or CANCEL THE CANCELED FLIGHT, I would have to pay a $200 cancel fee and a $150 redeposit fee!

    Insane.

  18. Did you call United – I’d expect them to rebook you on a a later flight without having to redeposit the miles …

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