As more flights are cancelled amid the Covid-19 outbreak, airlines and consumers have a new issue to tackle — refunds.
Under the law, airlines are required to remit refunds to customers within 30 days of receipt of complaints. The problem is that airlines around the world are facing cash flow constraints as they cut capacity and ground almost all of their fleet, and cannot afford to refund customers for cancelled flights. The state of the industry is dire, and several airlines have warned of imminent collapse without government help. AirAsia Group Bhd group CEO Tan Sri Tony Fernandes took to Instagram recently to urge customers of the low-cost carrier to accept credit as an alternative for flights cancelled.
Given the current circumstances, the Malaysian Aviation Commission, tasked to protect consumer rights, is giving airlines some leeway to respond to and complete refund requests.
Still, let us not forget the consumers who have helped the airlines get to where they are today. Perhaps giving consumers a timeline to receive their refunds will provide some assurance, as suggested by the Malaysian Association of Tour and Travel Agents. And for those who opt for credit for future travel, airlines can take a leaf out of Singapore Airlines’ book: it is offering extra flight credit in addition to waiving no-show and booking fees. Airlines can also offer added incentives to persuade customers to take flight vouchers, which Qatar Airways is doing.
The airlines’ lamentable response to Covid-19 has also exposed flaws in their financial management. It is time that new rules are put in place, where customers’ money for tickets purchased well in advance ought to be placed in a designated or trust account until services are rendered so that airlines would have no problem giving refunds.
These extraordinary times call for extraordinary measures. In this regard, airlines need to be flexible and empathetic, even as they expect this from their customers.