Money

Airlines are breaking the law on refunds. Should we be sympathetic? | Patrick Collinson


Since the coronavirus gripped Europe there has been one main theme to the emails pouring into the Guardian’s Consumer Champions column: why is my airline refusing to give me a refund?

The rules are quite clear: if a flight is cancelled, the airline has to offer you a refund. The Civil Aviation Authority states explicitly that “If your flight has been cancelled, your airline must offer you the choice of a refund or alternative flight.”

But the airlines are trampling all over consumer law and the CAA appears to have abdicated responsibility for enforcing the rules.

As we reported earlier in the week, easyJet has removed its refund option from its website, obliging those who don’t want to reschedule to join the lengthy queue for the helpline.

British Airways is no better. Its website simply says: “If your flight has been cancelled you can rebook or claim a voucher online”, without any mention of your right to a refund.

My brother has spent many hours fruitlessly trying to call the airline after it cancelled his £800 flight. There’s no way to email the airline, or even an address for post. It’s a matter of take the voucher – or wait endlessly in a call queue.

Meanwhile, Ryanair bluntly says it cannot process refunds until the pandemic has subsided, and the best that passengers can hope for, right now, is a voucher valid for 12 months.

Cue fury all round? Yes, people are right to be utterly frustrated at this behaviour and the denial of their rights.

Yet I have a smidgen of sympathy for the airlines. They are on the peg for huge lease costs on now-grounded planes and are still paying a large chunk of staff costs. They are heading for losses of $252bn (£202bn) should the lockdown last three months, says the International Air Transport Association (Iata). Realistically, how are they going to cash-flow billions of pounds in refunds? It’s not a surprise they are sticking their fingers in their ears and not picking up the phones.

Is there a halfway house, a solution that might satisfy the majority of people yet not permanently erode consumer rights?

The big problem with vouchers is the restrictions around their use. BA, Ryanair and easyJet say they are valid for 12 months only. Why? What if you don’t plan another journey on a route served by that airline in the next year?

Irish airline Aer Lingus has got it mostly right. Firstly, it has offered travellers a 10% bonus if they apply for a voucher; if you paid £100 for your flight, you’ll get a voucher worth £110.

Secondly, it lasts five years, not one. Aer Lingus is part of the same company, IAG, as British Airways, so it’s a mystery why BA is not making the same offer.

Thirdly, vouchers need to be fully transferable to other individuals without penalty. So if my brother were to accept a voucher for his cancelled £800 flight, he’d get a £880 voucher that I or someone else will happily pay him £800 for. It’s win-win-win. My brother gets his money back, I get a discount ticket, and the airline does not have to cash-flow a refund.

I was asked to volunteer to come off an overbooked £250 BA flight from London to Bangkok in 1997. It offered me a £400 voucher, an overnight hotel at Heathrow and a definite seat the next day. The voucher had no expiry, and six years later I used it during a BA sale to buy two return tickets to New York. It was a total bargain. Vouchers really can work.

The banks and credit card companies have offered coronavirus victims payment holidays. In a sense, opting for vouchers is giving a payment holiday to an airline while the business is in an almost impossible financial position.

But if we do let the airlines go down this route, it should be time limited, and the usual rules reinstated when normal life resumes.

It’s certainly better than a taxpayer-funded bailout, which is what the airlines will demand if their cash runs out.

But I write this working from home in an attic room. One of the few joys from the ghastly virus is to look up to a sky brilliantly free from vapour trails. Maybe once the issue of refunds is sorted, the question that will be ever more pressing is whether we should be flying so much anyway.



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