First off, if an airline cancels your flight, you’re more than likely entitled to a refund, rather than a voucher. That’s true in the United States, Europe and likely other parts of the world too. The last place to find that information, of course, is on your airlines website.

While asking for bailouts and other considerations, airlines are going to great lengths to dupe, deceive or just frustrate passengers into accepting vouchers, rather than their actual money back. For better, and for much worse, airlines are starting to get creative with it.

Here’s the low down on airlines behaving badly, and a clear print out of what legal rules are in place..

What are the actual rules for airline cancellations and refunds?

The United States Government and European Union each clearly state that if an airline cancels your flight, you’re entitled to a refund of any unused portion of the ticket. If you’ve yet to fly, this means you’re entitled to the entire cost of the ticket, even taxes and fees, and even if the ticket was non-refundable.

Here’s the US Department of Transportation Policy

What happens when my flight is cancelled? 

If your flight is cancelled, most airlines will rebook you for free on their next flight to your destination as long as the flight has available seats.

If your flight is cancelled and you choose to cancel your trip as a result, you are entitled to a refund for the unused transportation – even for non-refundable tickets.  You are also entitled to a refund for any bag fee that you paid, and any extras you may have purchased, such as a seat assignment.

If the airline offers you a voucher for future travel instead of a refund, you should ask the airline about any restrictions that may apply, such as blackout and expiration dates, advanced booking requirements, and limits on number of seats.

And here’s the European Union Flight Refund Policy, even updated to the current situation…

3.2. Right to reimbursement or re-routing
In the case of a flight cancellation by the airlines (no matter what the cause is), Article 5
obliges the operating air carrier to offer the passengers the choice among:
a) reimbursement (refund);
b) re-routing at the earliest opportunity, or
c) re-routing at a later date at the passenger’s convenience.

It’s worth pointing out that since the global crisis began, leaders in both the EU and USA have reaffirmed the validity of these laws. In other words, airlines have been warned that even in these wild times, these laws still apply and must be adhered to. Still, some aren’t.  Worse, many are playing cancellation games to confuse passengers.

What should I do if an airline cancels and won’t refund, even though it’s the law?

If an airline plays hardball by cancelling your flight and refusing to refund you, you’re left with one powerful option – the charge back. This is one of millions of reasons to book travel with a credit card, rather than a debit card, since credit cards carry consumer protection rights.

If an airline outright refuses to follow the law, your last recourse is to call your credit card company, let them know the airline is breaking the law and initiate a charge back against the airline. This is the only pretty much guaranteed way to recover your funds in cash, not airline vouchers.

Creative Bad Actors

United, British Airways and Jet Blue have been among the worst in the game, and have each gotten creative with how to dupe passengers.

United offered a travel flexibility policy, which it changed days later and chose not to honor, and now aim to hold customer cash for a year. That was textbook false advertising, and more than likely outright illegal.

British Airways then did its own best, actually going to the trouble to re-code a refund and voucher website to remove the button which allowed passengers to process their own refunds online. Only a workaround on Google Chrome would make the button appear.

With the shutdown of British Airways main call center in Delhi, India, the only realistic way to get a refund is now even more challenging. And IAG Group airline Iberia isn’t doing any better, failing to process a single documented refund since chaos broke out.

Lufthansa Group is specifically telling even travel agents that it plans to break the law, leaving Swiss, Lufthansa and other customers without a refund options. The airline is specifically stating that it doesn’t have a legal obligation, when it does.

Kenya Airways is also doing their best to be the worst, not honoring refunds on 100% refundable tickets.

And then there’s Jet Blue, which is taking a creative approach to their own contract of carriage and the US Department of Transportation rules on refunds in the event of a cancelled flight. They’re basically pretending they don’t exist.

Creative Good Actors

Obviously, both situations call for a refund, but with airlines bleeding cash by the minute, many are doing their best to buck the law and encourage vouchers, even if it means breaking it.

Fortunately, there was a silver lining today, with the one airline taking a creative pass at encouraging passengers to accept vouchers, whether it works or not…

American Airlines joins in

American Airlines is offering a 20% bonus if you take a voucher, over cash refund. It’s great to see the ante being upped, after Aer Lingus kicked this option off at 10%.

Aer Lingus Incentive

Aer Lingus is offering a voucher valid for 5 years on any Aer Lingus flights, not just your current routing for the full amount of your flights, plus 10%. A $1000 flight could be exchanged for $1100 in flight credit, and so forth.

Qatar joins in…

Qatar Airways is now offering a voucher for the full amount of each ticket, with a matching 10% bonus if you don’t go for the refund. Again, it’s not a huge amount, but it’s an positive incentive. Past flights which are due vouchers will still be eligible, but the airline asks to wait 30 days while it clear a backlog.

Should you take a voucher, if you can?

For many, particularly those whose jobs are at risk, the $1000 in cash back in the pocket is more appealing, but for those with more security, or who wish to support the travel industry during a hard time, it’s at least the framework for a square deal.

GSTP understands that other airlines are mulling plans to offer similar bonus incentives to accept vouchers over cash refunds, and with any hope, it’ll start a bidding war. 10% isn’t really that enticing, but 10% and either guaranteed perks, or entry into a prize pool for benefits like upgrades, free bags or something of the sort would help.

So what would move the needle? Cash in hand is king in the times of economic uncertainty, but a number in the 15-25% range, perhaps with a few perks attached could start to become significant.

If you’ve got $1000’s in bookings on the table and know you’ll return to the skies when its safe, you could secure tremendous value, particularly knowing that airlines will be forced to offer competitive prices to get people traveling again. And above all, you’d be helping to buy precious time for airlines as they find ways to survive.


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