Today, the American Society of Travel Advisors (ASTA) released an updated statement, and a co-signed letter, on the need for increased airline flexibility for the traveling public during the COVID-19 pandemic. In the letter, ASTA explains the need for carrier relaxation of their strict refund and exchange policies needed now to help consumers during this COVID-19 crisis
The letter reads as following:
It is not surprising that the traveling public—consumers—bear the brunt of the strict refund and exchange rules and processes that exist throughout the travel supply chain. Indeed, these policies existed well before the current circumstance we are in—the coronavirus pandemic. However, these rules, particularly those of the airlines, are now causing an unprecedented degree of frustration among travelers and travel advisors alike. Will this have a lasting impact on supplier brand loyalty?
Airlines are struggling as they move from selling seats in a pre-pandemic world, to a new world where seat sales are non-existent and refund requests are now the norm. The financial impact to carriers is great for which we cannot help but empathize. Travelers are becoming increasingly concerned with their inability to quickly obtain, or obtain at all, air ticket refunds for flights booked for trips that simply cannot take place as originally planned. Air isn’t needed if the cruise departing from the flight’s destination city has been canceled indefinitely; a hotel in that city that is now closed for business, or a tour that can no longer operate as scheduled due to border closings. Business travelers won’t fly to attend a meeting or event that has been cancelled and will not be rebooked as long as the entire city is effectively closed. In these instances, and countless others, rebooking the flight makes no sense to either the leisure traveler or corporation. Air alone is only a part of the broader journey—the transport to the holiday of a lifetime, or an important business event—now canceled, and not merely postponed.
All this is exacerbated by the huge negative cash flow airlines are now experiencing. What was only a month or two ago a lucrative business, has now almost come to a standstill with aircrafts parked and idle through no fault of any carrier.
To add to the complexity, credit card companies are focused on consumer protection looking for any source to hold accountable when a consumer chargeback on an air ticket occurs. They don’t take into account the intricacies of the travel agency debit memos that may occur even more so now during this time of crisis. Travel advisors are simply “agents” handling other peoples’ money in this case. They should not be liable for credit card disputes now arising as a result of the traveler’s concern for their own health and financial wellbeing as this pandemic continues. Especially during the midst of this pandemic, travel agencies—many women owned small businesses—are not banks and should be held harmless.
For airlines, in particular, to restore consumer trust and brand loyalty when the world opens up to travel again—as it will soon—a complete review of how these policies morphed into a cumbersome and overly burdensome ordeal must occur. Their work with the major credit card companies on solutions that will ultimately hold the travel agency harmless for money that is not theirs, is a significant part of the equation as well. In the end, carriers cannot expect consumers to remain loyal, or even return at all, to their respective brands. It’s long past time to revise the rules now in place and to do what’s right. This means, among other things, honoring refund requests made for the reasons described and permitting the consumer’s trusted travel advisor to process that refund through their GDS or otherwise and ensuring credit card companies are aligned with this effort.
A hypothetical case example illustrates the need for significant changes to airline policies. In October 2019, a family of four booked a cruise to the Caribbean for departure in early May 2020. That cruise is no longer an option, as due to the pandemic it had to be cancelled by the cruise line who, for the same reason, is unable to provide any other cruise options in its place. The flights to and from Miami, the cruise departure point, have not yet been cancelled by the airline, though it is almost certain they will be. The family is offered only credit for future flights, however, it is obviously not what is needed. They simply want their money back, the only meaningful remedy given the instability of the world from a health and financial perspective, coupled with the uncertainty as to when things will return to “normal.” Curiously, their particular flights are no longer showing “for sale” through their advisor’s GDS nor on the carrier’s own website, yet they have not been officially canceled, because to do so would entitle the travelers to a refund under the airline’s policy.
While we are pleased to learn just moments ago that today, the U.S. Department of Transportation issued an Enforcement Order providing carriers an opportunity to become compliant with existing refund obligations before the Department takes further action. This is a first step in the right direction. ASTA calls on airlines, globally, to work with credit card companies where applicable to do what’s right by:
- Relaxing existing fare rules to accommodate requested refunds for any flight through the end of 2020
- Refraining from issuing agency debit memos for credit card chargebacks on canceled flights/trips for which the airlines are refusing refunds today
- Ensuring travelers who have booked through an agency are advised to contact their advisor to process refunds and exchanges rather than directly on the carrier’s website
- Ensuring all tickets are fully refundable and not merely credited for future travel
- Permitting travel advisors to process all refunds via their GDS and ARC
- Protecting original agency commissions/incentives on air bookings should the tickets be exchanged or rebooked
- Protecting advisor commissions on refunded tickets
- Confirming and/or clarifying that penalty charges or change fees will not apply for canceled or rebooked flights during the current crisis
- Providing travelers the opportunity to use any credit issued for unused tickets for a minimum of two years from the original departure date
- For those tickets booked on or after March 1, extending the window for rebooking flights to a minimum of one year from date of travel with no change fees
- Ensuring that ancillary fees for any flight booked in 2020 that is subsequently cancelled are fully refunded to the traveler
The U.S. travel agency community generated $97.4 billion in ticket sales in 2019, continuing an upward year-over-year trend in place for some time. An additional $84.6 million in electronic miscellaneous document (EMD) revenue was generated by the agency community in 2019 as well, reflecting ancillary sales made on behalf of airlines. These figures equate to well over 302 million passenger trips and 1.4 million ancillaries sold in 2019 alone. Clearly, the U.S. travel agency community represents an extraordinarily significant source of revenue to the airline industry, and as such its views on the harsh impact these refund and exchange policies have on both advisors and the traveling public should be given the most thoughtful and serious consideration. Doing so will help promote and solidify brand loyalty as the agency and airline world continue to align and grow in support of the traveler in a post-pandemic world.
The letter is signed by the America Society of Travel Advisors (ASTA) and lists all the agencies which support it including: the ASTA Corporate Advisory Council, DCB Trave, Chirstopherson Andavo Travel, Cruise Planners, Ensemble Travel Group, GIFTED Travel Network, Hickory Global Partners, KHM Travel Group, Leisure Travel Alliance, MAST Travel Network, NEST, Nexion Travel Group, OASIS Travel Network, Palm Coast Travel, Signature Travel Network, TerraMar Travel Inc., Travel Experts Inc., Travel Leaders Network, Travel Planners International, TRAVELSAVERS, Travel Quest Network, Virtuoso, Western Associatio of Travel Agencies, and Your Travel Center/Montecito Village Travel.