Airlines are one of the least trusted industries in the country, even before they showed up to pick consumers pockets for nearly $60 billion (and it’s hardly the first airline bailout, American Airlines predecessors America West and US Airways both were kept alive with government subsidies after 9/11).
If there’s one thing consumers thought they could trust, though, it’s that if an airline flight doesn’t operate they can get their money back.
- This is a basic principle, a company can’t fail to deliver services but keep your money anyway.
- It’s black letter law in the U.S.
- And it was re-affirmed in Europe as recently as last week.
Airlines are so desperate to conserve cash that many around the world have made it as hard as possible to get refunds, misleading consumers into believing they aren’t entitled to one; hiding the ability to get a refund; taking the request for a refund and indefinitely round filing it; and simply refusing outright.
Needing money though isn’t an excuse to take money that belongs to someone else. And people don’t trust airlines to keep their promises to begin with, now they’re learning airlines may not even follow the law. (United Airlines has even been fined before for failing to properly process customer refunds.)
I should say though that I’ve actually had good experiences with refunds from American Airlines.
Gotta say kudos @AmericanAir to continue honoring refunds for cancelled flights, waiving redeposit fees on award tickets and refunding taxes.
Seems obvious it would work this way but many airlines showing their true colors at this time, holding customers' money hostage. #COVID19
— gary leff (@garyleff) March 24, 2020
Airlines in Canada, prominently Air Canada and WestJet, are getting some relief from refunds (HT: One Mile at a Time). The Canadian government says that airlines can now keep customer money for cancelled flights as long as they provide a voucher valid for up to two years.
On the one hand, passengers who have no prospect of completing their planned itineraries with an airline’s assistance should not simply be out-of-pocket for the cost of cancelled flights. On the other hand, airlines facing huge drops in passenger volumes and revenues should not be expected to take steps that could threaten their economic viability.
While any specific situation brought before the CTA will be examined on its merits, the CTA believes that, generally speaking, an appropriate approach in the current context could be for airlines to provide affected passengers with vouchers or credits for future travel, as long as these vouchers or credits do not expire in an unreasonably short period of time (24 months would be considered reasonable in most cases).
There are airlines who are willing to sacrifice their future to survive today. They aren’t even thinking about a future beyond next week and next month.
However the actions they’re taking today make buying tickets really risky going forward. The idea of buying deals now for future travel is jeopardized because of the uncertainty of what schedules will look like months into the future.
A common tactic airlines are engaged in is waiving change fees on new tickets, trying to goose sales by reducing risk. At the same time, since there will be many changes to flight schedules going forward based on what countries are open for travel, and where there’s demand, any ticket purchased today is subject to the risk it won’t operate.
If you buy a new ticket, and the airline changes its plans (or is forced to do so), you now know you won’t get your money back. Why would you buy a ticket until you’re sure of a flight schedule? Why would you buy a ticket on an airline that has open union contracts or furloughing employees?
Airlines are willing to steal today to survive until tomorrow. The Canadian government is willing to support that, it seems. But it’s an odd business model, and not one that’s sustainable, to make money by taking someone’s money and not delivering what’s promised. The most difficult times are when people and businesses show their true colors. No airline that does this deserves to survive.