Expect long delay in ticket refunds as Covid-19 chokes airline revenues

Travel agents are anticipating long delays in ticket refunds due to a surge in requests and the stressed financial condition of airlines.

International airlines are offering affected passengers an option of refund, vouchers, discounts on future bookings and opportunity to hold tickets for up to two years following travel bans. Refunds are being processed as per applicable rules and may include a cancellation fee.

Travel agents, however, say there is uncertainty as to how soon the refunds would be paid. "We do not know whether it would take one week, one month or even longer to get refunds," said Rajat Bagaria,  national joint secretary of Travel Agents Federation of India.

Last week, travel agents, airline executives and International Air Transport Association representative held a tele-conference on issues related to agents' remittances and refunds. 

Full service airlines give agents seven days to make payment for ticket sales. In a normal scenario agents deduct the refund amount while making their weekly remittance. But in March several airlines airlines suspended this facility and asked agents to make separate refund applications which would be processed by their finance teams.

"Agents have not received refund money from airlines. Customers who enjoy credit too have not paid and advances given to low cost airlines too are stuck as flights are suspended," Bagaria added. 

"Travel agents are handicapped and many will have to pay March salaries out of their pocket. April is even bigger challenge for agents as there are zero sales," said Madhav Oza, director of Blue Star Air Travels.

Cathay Pacific said the airline is receiving an increase in refund requests. " While we endeavour to process the refunds quickly, the process may take longer than normal. We have already started initiating refunds for passengers who have booked tickets through our direct channels," it said. 

An Emirates spokesperson said " Our teams are working round the clock to assist impacted passengers and with the scale of our operations there is a substantial backlog which will take time to process."

Lufthansa said reimbursements (refunds) remain possible in principle but in the current situation this is not possible within the usual limits. The German airline is also offering 50 Euro discount on rebooking and an option to choose a new destination.

• Travel agents say refunds could take one week to one month
• International Air Transport Association estimates $ 35 billion refund liability for airlines globally
• Emirates allowing passengers to hold ticket for upto two years from date of booking
• Lufthansa is offering 50 Euro discount on rebooking and option to choose a new destination.
• For flights till April 14, IndiGo and SpiceJet are creating a credit shell of entire ticket amount that can be used for rebooking. IndiGo is also offering refund after levying cancellation fee.