The public debate over flight refunds versus vouchers wages on.
Last week, Prime Minister Justin Trudeau touched on the hot button issue at his daily press briefing in Ottawa, saying that his government will need to have “very careful discussions” with airlines, the air travel sector and Canadians to determine how this argument will end.
Last March, hundreds of thousands of flights were cancelled due to COVID-19 restrictions and most air passengers received vouchers valid for 24 months.
Since then, thousands have called upon the federal government to mandate a sector-wide provision for refunds instead.
A House of Commons petition dedicated to the cause – one of three prominent petitions making the rounds – has already garnered more than 27,000 signatures.
The Canadian Transportation Agency (CTA) has declared its position, twice, first posting a statement on its website siding in favour of vouchers, saying that flight disruptions caused by COVID-19 were beyond the airlines’ control.
The CTA later clarified its position in an FAQ, saying: "If you think that you're entitled to a refund for a flight that was cancelled for reasons related to the COVID-19 pandemic and you don't want to accept a voucher, you can ask the airline for a refund."
Speaking to media last week, Trudeau suggested that finding the right balance in this dispute “will be delicate.”
That’s putting it lightly.
The travel industry – arguably one of the hardest hit sectors in the coronavirus crisis – will need to conserve whatever cash it has during this unprecedented event if it's going to survive through it all.
Travel advisors also suffer if hard-earned commissions get recalled when a customer pursues a refund or credit card chargeback.
Refund-seekers, generally speaking, are demanding money back for services they paid for but have not received (and thousands have joined attempted class-action lawsuits to make this point).
The issue is also not as black and white as it is sometimes portrayed.
Not every trip is booked the same way – customers are bound to different sets of contracts, rules and conditions that dictate if whether or not a refund is guaranteed.
Air Canada, just recently, stepped forward with new options for flights that were cancelled during the pandemic.
In a press release issued Friday (May 22nd), the airline announced revisions to its goodwill policy, revealing that customers will be given the choice of a travel voucher with no expiry date that is fully transferable or the ability to convert a booking into Aeroplan Miles and get an additional 65 per cent bonus miles (more on that here).
The carrier also noted that customers with refundable tickets can, indeed, receive a refund if they wish, claiming that since January 1st, 2020, Air Canada has refunded nearly $1 billion in tickets.
Now that the federal government is presumably working with the airline industry to settle this feud, similar (if not new) developments are expected to surface in the near future.
What do travel agents think?
Canadian travel advisors – a group that has been caught in the middle of this – have a vested interest in the matter given that they, presumably, would want to provide their clients with the best, most accurate information available.
Lois Barbour of Travel Time - TPI in St. John’s, Nfld., “sees the validity” in both sides of the debate.
“As a travel advisor, my primary concern always lies with my customers, from the moment they book with me until they return, and this hasn’t changed,” says Barbour. “However, the position that we are all in right now is a difficult one for clients or for any businesses.”
Barbour says that most of her clients have “happily accepted” travel credits, and for those that have preferred a refund, “I have tried to be helpful and assist in any way I can.”
“Those with insurance policies have been the easiest to facilitate,” says Barbour. “I like that the airlines have added more flexible terms, and extended validity, which will make it easier to utilize for future travel. The interest in travel is still there, as I have been making new bookings over the last couple of weeks for travel later this year and in 2021.”
Mike Kroeker of Winnipeg, MB-based Bonaventure Travel says that “if the airlines are going to survive, they can’t be issuing refunds.”
“If clients purchase a refundable fare that’s one thing. A non-refundable fare is still non-refundable, no matter what the circumstance,” says Kroeker. “I think the airlines are already being generous by giving a 24-month credit on non-refundable tickets….My agency has hundreds of credits on file as we do a lot of GDS ticketing. We all want to be in business once this is over.”
Travel consultant Etelka Klee of Laval, QC, thinks it’s “great that airlines can protect themselves with future travel credits.”
However: “What about all the travel agents being sued for cash refunds?” she asks, speaking from personal experience. “Our hands are tied. We’re being harassed nonstop.”
Klee says “a standard rule” needs to be introduced.
Travel consultant Justin Clarey of Marlin Travel in Port Hope, ON, says vouchers are fair “unless the terms of the booking allowed refunds,” he says.
“I think this is a great lesson for people not realizing that just purchasing the lowest fare without a concern for the terms of that fare has repercussions,” says Clarey.
Clarey says most of his clients have been fine with vouchers “because they all still want to do the trips they had booked.”
“The ones initially hesitant about the vouchers changed their tune when I explained that if airlines are all forced to refund, they will all likely go out of business,” he says. “If you’re a traveller and you want to continue travelling in the future with fair competition, it’s time to accept the voucher and support the industry.”
If airlines start going under, there may not even be a refund (or a voucher for that matter) to give, which means everyone could lose in the end if it gets to that point.
Another possible outcome is this: if airlines cease to exist, or if only one or two carriers survive the pandemic, “travel will only be reserved for the very wealthy,” suggests Clarey.
Laurie Keith, president of Romantic Planet Vacations in Hamilton, ON, believes future travel credits have “literally saved our industry.”
“If our Canadian suppliers are forced to issue refunds, this will leave them at a major financial and bankruptcy risk. Our industry needs them. Our consumers need them for fair competition and rates, and we need them,” says Keith.
The commission recalls would also be “truly devastating and damaging on all us,” says Keith, noting how a colleague of hers had to return $21,000 in commission for a group booking, which forced that individual to go out of business.
Keith understands why some consumers would want a refund.
However: “I strongly believe the decision of issuing future travel vouchers has been the win-win-win scenario for all of us involved – the airlines, the retail travel agencies and the consumer,” she says.
Cathy Stradling of TPI Harmony Travel Services has been in the travel business for more than 20 years. (Previously, she worked for the provincial government for 24 years).
She believes travel credits are an acceptable option, noting that “the people seeking refunds are generally those that chose not to take travel insurance.”
“If refunds are now to be given, all of the work that travel advisors have done over the past three months will have to be redone,” says Stradling. “And, quite frankly, it is an insult to the people who did take travel insurance to protect their monetary investment.”
Stradling understands that people are looking for a “quick fix” to their financial woes during the pandemic.
However, refunds are “not the solution to the problem,” she argues.
“The CERB has been very generous to Canadians, as have all of the federal government programs. It would be a huge mistake to dilute what the government has already done,” she says. “I think it is always better, in the long run, to deal with the programs already in place and then assist the airlines as necessary.”
Unprecedented times call for creative measures, Stradling says.
“I personally think that this can be handled, creatively, by the government and travel providers so that everyone can carry forward,” she says.
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