Issues with Airline Refunds

2020 was a momentous year. The economy was booming, the unemployment rate for all segments of society had been beaten down to historic levels.

Then the Coronavirus hit and within a few weeks, it was becoming obvious that it was soon to a pandemic.

Many things happened as a result. Factories were forced to shut down because of fear of sickness as well as the supply chain dried up. Workers who were laid off were forced to depend on government largesse to survive or had to cut back non-essential spending.

Included in that non-essential spending was travel, both for business purposes and leisure travel. Cruise lines were forced to lay up ships and airlines reduced their flying schedule to a bare minimum of flights. Suppliers (those companies that provide essential services such as hotel reservations, transfers from airports to hotels, tour managers, etc.) could not provide those services and they either laid off or furloughed many of their employees. Some of these employers could sustain reduced operations for quite a while others were forced to go out of business.

I am giving you a background for part of the issue that travelers were faced with when they attempted to get refunds for airline tickets.

In some instances, the airlines canceled flights while in others, travelers canceled their tickets because the tour, cruise, or hotel was shut down. Even worse, some countries closed their borders to foreign visitors. Then the traveler attempted to get a refund on the cost of the airline ticket.

Some travel advisors were able to intercede and negotiate an adequate refund. For many, however, the only alternative given by the financially-strapped airlines was a voucher. A voucher is a document that entitles the holder to exchange it for a service in the form of a future flight at the same price. It is NOT a refund. However, some vouchers have conditions that the holder cannot meet – like a time limitation for its redemption. This is because the traveler might not have the time for the future trip.

In addition, some airlines have a policy that they do not have to issue a refund if they can take care of the passenger within two hours of the originally scheduled flight. Then, because of the pandemic, at least one airline changed that time period to six hours. The Department of Transportation ruled that airlines could not change ticket policy after they sold them. Imagine you as a purchaser of an airline ticket connecting you to a port where you would board a cruise ship. Because of the changed or canceled flight, you missed the ship departure. Now you have two issues to negotiate: the refund of the cruise price and the airline ticket. If the cruise terminated at a different port and you had made hotel reservations there and a car rental charge plus a return flight on a different airline, can you see the problems that are mounting?

An article in the Wall Street Journal of 13 August 2020 (p. A9) describes some really difficult situations. There is no guarantee that an airline issuing a voucher will even be able to honor that voucher if the airline is then bankrupt. One instance in this article is of an individual who spent more than $10,000 on airline tickets for his family trip of 14 to the island of St. Thomas. He had paid for all of the tickets assuming that any refund would go back to his credit card. The involved airline issued vouchers, but as the individual tickets had specific names, the vouchers were issued to each of the 14 passengers for credit as only the ticketed passenger can fly on that voucher. The possibility of getting all 14 on a future trip was almost impossible. After complaint, the airline relented in its strict policy in a one-time exception.

With the complexity of travel – even with on-line capabilities – I still strongly recommend a professional travel advisor. At minimal or no cost to the potential traveler, the advisor stands behind him/her and is there to assist if things go awry.