Southeast Asian travel associations are urging airlines to refund passengers for flight cancellations due to the coronavirus outbreak, rather than issuing travel vouchers.
The International Air Travel Association estimates industry liability in this area at US$35 billion, but told the travel agent community in a letter earlier this month that airlines’ most urgent need amid the crisis was to keep their remaining liquidity to pay salaries and other fixed costs. As such, IATA said airlines should be allowed to issue vouchers in lieu of cash refunds to ease their burden.
But the Federation of ASEAN Travel Associations, which represents over 7,700 travel agents in 10 Southeast Asian nations, says it is “a matter of principle” to return payments collected from customers. While it is sympathetic with airlines, it says it is “poor financial management” to take deposits for future services but unable to provide refund.
The federation urged IATA in a statement today to compel airlines to process cash refunds, failing which it warned could stifle forward bookings, travel patterns and consumer confidence as well as spur unnecessary lawsuits. It also urged governments worldwide to provide financial resources and relief to the aviation and travel industry.
With a third of global fleet parked as countries sealed their borders due to the virus outbreak, IATA has estimated that revenue for passenger ticket sales will fall 44 percent from last year.-AP
