We don’t want to see the travel industry suffer further as a result of the pandemic, but it cannot be on consumers to prop up airlines and travel firms. Here’s why.
Why have Business Secretary Alok Sharma and Transport Secretary Grant Shapps remained silent over the scandal of travel firms denying refunds for coronavirus holiday and flight cancellations?
For nearly seven weeks since international travel was shut down, airlines and some tour operators have been hoarding billions of pounds in customer payments for holidays that are no longer happening – effectively interest free loans to get them through the crisis.
Most British holidaymakers are protected by legislation that entitles them to a refund within seven days for a flight or 14 days for a package holiday if their trip is cancelled.
Yet we found 20 of the biggest airlines and tour operators breaking the law by delaying or denying refunds. Many are doing it brazenly and in plain sight. And they’re getting away with it, with barely a peep of protest from the government or the regulator, the Civil Aviation Authority.
20 of the UK’s biggest travel operators and airlines are openly breaking the law by delaying refunds for cancelled trips or removing customers’ refund rights altogether.https://t.co/Wlrcc28Uso— Which? Travel (@WhichTravel) April 22, 2020
No-one wants to see these businesses collapse. Millions of us rely on them to help us get away for what might be the most enjoyable and relaxing week or two of our year.
But that does not mean it’s acceptable for millions of families and other travellers – who may be facing serious financial problems of their own due to coronavirus – to fund the travel industry through this crisis.
We’ve heard from people out of pocket by more than £10,000 on a holiday of a lifetime and others who really need their £150 flight refund so they can pay this month’s bills. Many are understandably concerned about whether they will ever see their money again.
We’ve seen holiday companies wrongly telling customers that consumer protections have changed and they are no longer entitled to a refund. Some are forcefully pushing vouchers and credit notes on customers – even though these may prove worthless if the provider goes bust.
Yes @WhichUK The company @HolidayExtras emailed 100s of customers (including me) who had to cancel, saying in writing they would get a full cash refund within 30 days. BUT once that time passed no refund in sight, just an email saying vouchers only now!! #RefundPassengers— Rebecca Willey (@RebWilley) April 22, 2020
The major airlines have hardly covered themselves in glory. They are withholding money from their passengers, and also from holiday companies that need the cash to refund their customers.
British Airways passengers have been infuriated by the airline taking refunds offline and asking them to ring a phone number that plays a recorded message before hanging up on them.
Ryanair customers have been bombarded with vouchers – even after making it crystal clear they are only interested in a refund. The airline has been through several iterations of its refund policy during the pandemic.
All of them have had one thing in common: no-one actually seems to get a refund.
People are also finding they are out of luck when they turn to their insurer or card provider in a last-ditch effort to get their money back. Insurers say the holiday firm or airline is responsible.
Some banks are rejecting debit or credit card dispute claims, leaving people wondering if anyone will help them.
In short, it is an unholy mess. And it’s not going to get better without urgent government intervention.
Support the industry, protect consumers
We’ve produced a 10-point plan for supporting the industry and protecting consumers – so that airlines and holiday firms can weather this storm without neglecting their legal obligations to customers.
We have shared it with the government and MPs on Parliament’s Transport Committee, who will be questioning industry representatives this morning.
The airlines hold the key to getting the system moving again and we believe ministers and the aviation regulator must start getting tough with carriers that are breaking the law or playing fast and loose with the rules.
Our proposals also include a temporary extension of the 14-day statutory refund period for package holidays to a maximum of a month, because we know operators face a challenge to process so many refunds with fewer staff available – but a cash refund must still be an option for those who want it.
The government must guarantee that the refund credit notes being offered instead of cash refunds are insolvency protected. But even with that reassurance, many will still want a refund and we have concerns that some firms are simply not in a position to honour their obligation to pay up.
That’s why we’re also calling for the creation of a temporary Government Travel Guarantee Fund, which would support holiday companies ordinarily in good health that are struggling to fulfil their legal responsibilities due to coronavirus cancellations.
The actions in our plan, taken together, are necessary to secure a return to a thriving UK travel sector as coronavirus restrictions are gradually lifted.
But unless action is taken now, there is a real risk of permanent damage to consumer trust and confidence in the travel industry.