World airlines suspend online refund system

All international airlines have suspended the option of claiming refund through online system, offering vouchers for future travel instead of cash refunds of unused tickets.

The global aviation industry has generated around 68 million jobs and earned US$ 572 billion as passenger revenues in 2019.

However, the global air travel dropped by 70 percent in ongoing quarter due to COVID-19 crisis and airlines with grounded fleets and decreasing cash could not afford to issue refunds, according to International Air Transport Association (IATA).

The passenger revenues could plummet over US$250 billion after thousands of flights cancellation. Therefore, airlines are likely to face US$35 billion of potential refund claims by the end of this quarter. IATA said airlines were running out of cash so refunding the cancelled ticket was almost unbearable financially speaking and hoped passengers would accept vouchers instead. IATA said that three months of severe travel restrictions plus lower traffic could put 25 million jobs at risk and added that airlines were burning cash reserves in order to stay afloat hence refunds payments for cancelled flights, as per rules was not possible. However, Travel Agents Association of Pakistan (TAAP) in a statement refused to accept vouchers for future travel instead of cash refunds of cancelled flights. It said that travel and tourism sector was facing severe financial shocks due to unilateral and unfair policies adopted by IATA and airlines, putting hundreds of thousands of jobs at risk. It further stated that the travel agencies on one hand were under acute pressure from passengers, demanding cash refunds whereas on other hand, airlines were denying to give refunds of unused tickets.

It said that airlines were offering travel vouchers for future travel, which TAAP termed unacceptable and added that travel agencies could not claim refunds of unused tickets as airlines had suspended the option of claiming refund through online system. Keeping the said problems in view, the TAAP has demanded IATA & airlines to open its auto refund system and release full amounts of refunds of all unused tickets without any deduction because passengers were not responsible for flights cancellation. We cannot accept vouchers instead of cash refunds as passengers are demanding cash refunds only, TAAP said and urged govt to put restriction on any remittances (outflow) by the foreign airlines from Pakistan to their parent countries until the refund issue was resolved.