16 airlines commit to processing refunds within 7 days of flight cancellation

Lufthansa is one of 16 airlines that have committed to reimburse passengers within seven days if their flight gets cancelled. (Photo via Wikimedia Commons 4.0)

In much-awaited relief to air travellers, 16 airlines including Air France, British Airways, KLM and Lufthansa have committed to reimburse passengers within seven days if their flight gets cancelled.

The airlines have also promised to provide better information regarding passengers' rights in the event of a possible cancellation by the airline, according to a recent official statement by the European Commission.

Other airlines that have promised to provide better conditions for their passengers are Aegean Airlines, Alitalia, Austrian Airlines, Brussels Airlines, EasyJet, Iberia, Eurowings, TAP, Norwegian, Ryanair, Vueling, and Wizz Air.

Overview of the airlines’ commitments

- To avoid confusion and delay in refunds, the airlines’ will make a clear distinction between flight cancellations by the airlines and flight cancellations by passengers themselves.

- Airlines have promised to give equal prominence on their emails, websites, and other communication means to different options (rerouting, refunding, and vouchers) that a passenger has in case of a flight cancellation.

- Passengers can be given vouchers only if they explicitly choose that option.

- Unused vouchers that passengers got during the early stage of the pandemic can be reimbursed in money if passengers want.

- Passengers who booked a flight through an intermediary (agent or online aggregator) and have not been refunded can now seek refunds directly from the airline.

Great Indian burden of refund

While passengers are heaving a sigh of relief at the quick refund pledge of 16 airlines, Air India passengers are still waiting for their refund. The national carrier owes Rs 250 crore in fare refunds to passengers.

Last month, the airline had said that it is initiating an automated refund system in India and abroad, and added that it had cleared refunds worth Rs 130 crore since the process began in July this year.

While Air India lags, earlier this year, IndiGo claimed to have processed 99.5% of its refunds after flights were cancelled during the lockdown. In August, MakeMyTrip had said that it had disbursed over Rs 642 crore in refunds and had resolved almost 99.6% of its impacted bookings during the lockdown period.

Though most international carriers mention no-charge for date change of flight tickets, passengers who booked through an intermediary (travel agent, online aggregators) still end up losing money if they choose to cancel or postpone their flights.

Anil Haribal, owner of Mumbai-based Travel Forte, explains, “Initially, all airlines paid a cut/commission to travel agents on every sold flight ticket. The commission gradually dwindled from a high of 12% to zilch nearly seven years ago. Like any other service provider, travel agents charge a fee for the service provided, and if your refund is less than the original payment, the deducted amount will probably be the travel agent’s service/convenience charge.”

As an example, Haribal said that if one were to buy a Goa-Doha-Riyadh return ticket, date change would entail a charge of Rs 1,300 (subject to same class booking) while cancellation charges will be Rs 4,500.

US department of transportation report

In its September report to the White House Competition Council, addressing lack of timely airline ticket refunds associated with the Covid-19 pandemic, the US department of transportation (DOT) has reported an increase of 4,552% in refund complaints relative to the corresponding period pre- pandemic. From January 1, 2020 to June 30, 2021, DOT received a total of 124,918 consumer complaints related to air travel. Of these, 105,327 (84.3%) complaints concerned refunds. Of the 105,327 refund complaints, 30.8% (32,466 complaints) were against US carriers, 52.4% (55,209) complaints were against foreign carriers, and 16.7% (17,575) complaints were against travel agents and tour operators.

DOT had initiated investigations against 20 airlines for failing to provide the timely refunds, with investigations of 18 airlines involving approximately 30,100 complaints still pending. The department has also initiated rulemaking that would enhance passengers’ rights when a flight is operating but the passenger decides not to fly because of government restrictions. Current regulations do not address this situation.

Passengers’ Rights in case of flight delays and cancellation

According to the government of India’s department of consumer affairs passengers’ charter, the rights of a passenger include:

- At the time of booking, the airline must clearly ‘indicate’ the amount of refund money that will be given to passenger in case of cancellation.

- Airlines need to inform passengers about flight cancellation 24 hours before the scheduled departure time. In this case, the customers should be offered either a full refund of the ticket amount or an alternative flight.

- If the flier is not informed 24 hours before departure or she misses a connecting flight due to cancellation, the airline has to offer compensation. The compensation amount is between Rs 5,000 and Rs 10,000, depending on the block time (block time is the time between the departure of a flight from the gate and arrival at the destination gate).

- A passenger has the right to receive refund of statutory taxes, user development and passenger service fees levied by the airlines is case s/he cancels the ticket.

- If the airline is not sticking to the norms, the passenger must first complain at the airline’s help desk or email them. If the resolution is not satisfactory, the person can file a grievance with the ministry of civil aviation through its AirSewa portal or app.