Travel Agent NewsTrade body says airlines can’t afford to offer refunds

Ticket refund or travel voucher? This is what IATA wants

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IATA’s de Juniac: “These are dark days for our industry, but we are resilient, and we will get through them, together."
IATA’s de Juniac: “These are dark days for our industry, but we are resilient, and we will get through them, together." Photo Credit: IATA

GENEVA - IATA CEO and director general Alexandre de Juniac recently wrote an open letter to travel agents about the 'dark days' for the industry why the association is calling for regulators to ease requirements for cash refunds and allow airlines to issue vouchers. Here's an extract what he said:

IATA is willing to engage in open and collaborative discussions with the travel agency community represented in the Passenger Agency Programme Global Joint Council to formulate a structure for these vouchers that will bring value for airlines, travel agents and consumers.– IATA CEO and director general, Alexandre de Juniac

“On the issue of airlines withholding ticket refunds in the BSP, or issuing vouchers in lieu of refunds, I'm afraid that the message I have to deliver is not one that will provide comfort.

“Our industry is experiencing a critical liquidity crisis. Most airlines are spending more cash in reimbursing their passengers than they receive in new booking revenues.

“We recently estimated the industry's liability in this area at US$35 billion. In this context, airlines' most urgent need is to keep their remaining liquidity to pay salaries and face their fixed costs.

“It is practically impossible for industry players to find sufficient financial means to keep the air travel value chain operating in the short time that airlines have before facing bankruptcy.

In this context, we believe the best answer for both airlines and travel agents is for regulators to ease requirements for cash refunds and allow airlines to issue vouchers instead. These vouchers can be managed through the IATA Billing and Settlement Plan (BSP) using processes and procedures that already exist today.

“This would remove the pressure that is currently on agents to issue cash refunds at a time when airlines are making decisions based on their own need to preserve cash.

“IATA is willing to engage in open and collaborative discussions with the travel agency community represented in the Passenger Agency Programme Global Joint Council to formulate a structure for these vouchers that will bring value for airlines, travel agents and consumers.

“We are grateful that regulators in Canada, Colombia and the Netherlands have recognised the necessity of this approach and we hope others will do the same.

“While I know that this is not the answer that you want to hear, it's important that you understand that IATA is working hard to find a solution to this problem that will enable us to endure and move forward.

“People want to travel, for the horizons it broadens and the connections it enables and maintains. These are dark days for our industry, but we are resilient, and we will get through them, together."

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