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A worrying number of airlines are currently doing their very best to either make it very hard for customers to request the full refund that the law says they’re entitled to, or they’re offering passengers incentives to accept travel vouchers in place of refunds. This is not good news for flyers and you should almost certainly refuse a travel voucher if a refund is due to you.
What Do The Rules Say?
First and foremost let’s get one thing very clear: The current pandemic does not allow airlines to ignore the rule of law in the countries they operate within and to/from.
Airlines cannot pick and choose which laws they’ll adhere to and which they ignore and this applies as much to situations where an airline cancels a traveler’s flight(s) as it does to any other situation that may arise.
In the United States the Department of Transport (DoT) regulations on canceled flights are very clear:
If your flight is canceled and you choose to cancel your trip as a result, you are entitled to a refund for the unused transportation – even for non-refundable tickets. You are also entitled to a refund for any bag fee that you paid, and any extras you may have purchased, such as a seat assignment.
The DoT goes on to say the following:
If the airline offers you a voucher for future travel instead of a refund, you should ask the airline about any restrictions that may apply, such as blackout and expiration dates, advanced booking requirements, and limits on number of seats.
As far as the law in the European Union goes (yes, this still covers the UK), this is the advice:
If your cancelled [short-haul, medium-haul or long-haul] flight is covered by EU law, your airline must let you choose between two options:
1. Receive a refund
You can get your money back for all parts of the ticket you haven’t used. For instance, if you have booked a return flight and the outbound leg is cancelled, you can get the full cost of the return ticket back from your airline.
2. Choose an alternative flight
If you still want to travel, your airline must find you an alternative flight. It’s up to you whether to fly as soon as possible after the cancelled flight, or at a later date that suits you. Airlines often refer to this as being ‘rerouted’.
Although most airlines will book you onto another of their flights to the same destination, if an alternative airline is flying there significantly sooner then you may have the right to be booked onto that flight instead. You can discuss this with your airline.
For clarity, a flight is covered by EU law if it departs from or arrives into:
- Any EU member country
The home country of an airline has no bearing on whether or not it is subject to EU law.
Airlines in the US and EU cannot refuse you a refund if they have canceled your flight(s).
What’s The Issue?
A number of airlines (like British Airways, United Airlines, SWISS, and Lufthansa) have been making it deliberately difficult for passengers to request refunds by either:
- Forcing them to call in and wait on hold for hours for a refund (when refunds were previously requestable online)
- Directing them to areas of their websites which suggest that they’ll be offered a refund but which actually only offer them the option to request a voucher for future travel (British Airways is very guilty of this)
- Lying to them by saying that they cannot process refunds at all and letting them believe that a travel voucher is their only viable option (this appears to be the preferred tactic of SWISS).
Other airlines (like American) are trying to persuade customers not to request the cash refunds they’re entitled to by offering them bonus travel credits on top of the travel vouchers they’re automatically entitled to.
In all these cases, what the airlines are trying to do is to minimize the amount of cash they have to give back to travelers so that they can shore up their own finances and, by issuing travel vouchers, airlines are effectively getting customers to provide them with interest-free loans.
Moreover, not only are the travel vouchers effectively interest-free loans to the airlines, they’re also loans that expire.
Most of the travel vouchers that the airlines are currently issuing are valid for a period no longer than 12 months from when the originally booked travel was due to take place so if a passenger doesn’t use their voucher(s) in that time, the voucher is useless and the airline owes them nothing in return.
That’s a phenomenal deal for the airline and a very poor deal for the customer.
Don’t Be Naive
No one knows what the airline industry will look like in 6, 12 or 18 month’s time and there’s a very real chance that not all the airlines in existence today will be in existence when all of this has blown over…at least not in their current guise.
Airlines around the world are begging their governments to bail them out of trouble right now, and there are some governments that are showing a great deal of reticence when it comes to handing over billions of dollars to corporations that, fundamentally, didn’t save for a stormy day.
Yes, eventually most (probably all) of the major carriers are likely to be bailed out in one way or another, but there’s absolutely no guarantee what those bailouts will look like and there’s every chance (at least in some jurisdictions) that passengers holding promissory notes for future travel from a distressed airline may see themselves categorized as unsecured creditors and, as a result, never see a dime of value out of their travel vouchers.
If you have the legal right to a cash refund why would you put yourself in a position where you have exchanged that cash for a voucher that may turn out to be worthless?
Ok, yes, all the US airlines have been through bankruptcy at least once before (they really are appalling corporations for the most part) and I don’t think that passengers with vouchers for future travel have been wiped out in those bankruptcies (someone please correct me if I’m wrong)…but that’s no guarantee that things won’t be different this time around.
No one knows what any of the airline bailouts will look like this time around and no one knows for sure which airlines will get the government aid they claim to need, so why offer them an interest-free loan if you don’t have to? If you feel like gambling then sure, go ahead…but be very aware that you’re very clearly taking a gamble.
I strongly recommend that no one settles for an airline voucher for future travel in place of a cash refund just because they’re having trouble getting a response from the airline or because they have to wait on hold for a long time.
- Stay on the phone line as long as it takes and get your money back regardless of how long you have to stay on hold.
- If the airline tries to tell you that you’re not entitled to a refund (and it canceled your flight) make sure you have the relevant local law(s) to hand, quote them down the phone line (or via social media if that’s how you’re dealing with them) and tell them you’ll lodge a complaint with the relevant authorities if they ignore your legal rights.
- If an airline still refuses to listen (and you have checked that you’re entitled to a refund) report them to the department that regulates them (the DoT in the US) and get in touch with the credit card company that you used to book the trip to see if you can request a chargeback.
Do not give up. Do not let the airline wear you down. If an airline has canceled your flight(s) you are entitled to 100% of what you originally paid in the original currency you used – that means that you’re entitled to all the money you handed over (fares + fees + taxes + ancillary fees) as well as any miles, points, and co-pays that you handed over.
It is not your job as a traveler to support billion-dollar corporations with interest-free loans (that you may never see repaid) – get your money back and don’t settle for vouchers.