Airline passengers still in limbo over refunds for flights cancelled due to Covid-19 pandemic

A nearly empty Changi Airport T4 due to cancelled flights in March. Case has urged airlines to offer cash refunds as it is unclear when widespread commercial travel could resume.
A nearly empty Changi Airport T4 due to cancelled flights in March. Case has urged airlines to offer cash refunds as it is unclear when widespread commercial travel could resume.ST PHOTO: ALPHONSUS CHERN

Same airline gives one customer cash refund, another told credit voucher her only option

Two women but two very different outcomes - when they both confronted the same airline about holidays ruined when flights were suspended after countries went into Covid-19 lockdown mode.

When Ms Janice Wong's family vacation in April was cancelled, she was later given a credit voucher by Jetstar Asia and told that the airline does not offer cash refunds.

But Ms Kimberly Camille Orgula managed to get money back for her pair of non-refundable promotion tickets from the same carrier.

Their experiences underscore the issue facing many affected airline passengers here: inconsistent refund policies across airlines and even within the same airline, as well as inconsistent application.

The Consumers Association of Singapore (Case) has received more than 350 complaints about such airline refund issues since Jan 22, when the Government put out its first Covid-related advisory against travelling to China.

The consumer watchdog urged airlines to offer cash refunds as an option given that it is unclear when widespread commercial travel could resume again.

Case executive director Loy York Jiun said he has been engaging airlines that offer only credit voucher refunds, asking them to be more flexible and allow passengers the "right of reimbursement if the vouchers remain unused at the end of the validity period". Case has managed to help some customers get a full refund.

The issue of refunds has put airlines in a tricky situation.

While most would by and large honour their contractual obligations in their refund policy, some passengers have cried foul over not being given a cash refund.

Alton Aviation Consultancy predicts that global travel demand will return to 2019 levels only in late 2021 or 2022.

Its analysis of airlines suggests a significant number of carriers do not have sufficient liquidity to tide them through more than two months of the crisis without additional injections of capital, said Mr Joshua Ng, engagement manager based in Alton's Singapore office.

TICKETS NOW 60% DEARER

Jetstar cancelled the flight in March and gave me a travel voucher. There was no other option. I was shocked to find out that the price for the same trip would now cost 60 per cent more.

MS JANICE WONG, on her experience trying to get a refund for a cancelled Jetstar Asia flight to Okinawa in April.

  • Airlines' refund policies amid virus situation

  • SINGAPORE AIRLINES

    • Cash refund of the unused value of your ticket, or

    • Flight credits with bonus credits of between $75 and $500, awarded based on the cabin class you had booked previously.

    SCOOT

    • 100 per cent cash refund of the value of your original ticket, or

    • 120 per cent refund in Scoot vouchers.

    AIR ASIA

    • Unlimited flight changes: Change to any new travel date on the same route an unlimited number of times before Oct 31 without any additional cost, subject to seat availability, or

    • Flight credits to be redeemed within 730 calendar days (two years) from the issuance date.

    JETSTAR ASIA

    • Cash refund, depending on destination's consumer laws, or

    • Travel credit voucher valid for 12 months that can be used for multiple bookings, or

    • Free move to an available, like-for-like service from August.

Case's Mr Loy said that in addition to refund issues, some consumers were unhappy that they were charged a financial penalty or administrative fee for cancelling or postponing flight bookings.

In April, Singapore Airlines (SIA) and Scoot changed their refund policies and offered passengers the option of a cash refund.

The two airlines are also offering higher credit value, which is seen as an incentive for passengers to take this option. Previously, most affected customers were "eligible" for refunds in the form of credit vouchers that cover the unused value of their tickets.

A Scoot spokesman told The Sunday Times that its tickets are generally non-refundable, but the airline changed its policy after "having had time for our financial position to stabilise", as well as taking into account customers' feedback. About 25 per cent of customers who have responded have opted for Scoot travel vouchers, which offer a 20 per cent bonus on top of the original ticket value.

An SIA spokesman said the bonus flight credits are to thank customers for their loyalty and support and "can be used to offset airfare changes as a result of demand and supply, or a change in the customer's itinerary".

Last week, Jetstar Asia extended its credit voucher validity from six months to 12 months and gave passengers the flexibility of using the vouchers for multiple bookings.

Said Ms Wong, 44, who paid $1,120 for three Jetstar Asia tickets to Okinawa: "Jetstar cancelled the flight in March and gave me a travel voucher. There was no other option. I was shocked to find out that the price for the same trip would now cost 60 per cent more.

"So I tried to contact the airline. I was put on hold for over an hour. When I eventually got hold of a customer service agent online, I was told to pay the price difference of $690 for the new booking as there is no other option for me.

"There isn't even an e-mail address that I could send my appeal to. I feel this is unfair. I can't afford the new fare and I have no other option."

MULTIPLE REFUND REQUESTS

Meanwhile, Ms Orgula, 29, from the Philippines, managed to get her airfare refunded last week after she sent Jetstar Asia multiple refund requests. This was despite her tickets to Singapore being non-refundable as they were purchased during a promotion.

Asked about the inconsistency in its refund policy, a Jetstar Asia spokesman said the offer of an alternative option, including "a free move to an available, like-for-like service from August 2020 or a cash refund", depends on the destination's consumer laws.

Unforeseen events such as this pandemic can be covered by force majeure clauses in the terms and conditions of an airline ticket purchase, and this will determine whether a passenger is legally entitled to a refund.

 
 
 
 

Mr Paras Lalwani, director in Drew & Napier's Dispute Resolution Practice, said: "Whether the Covid-19 pandemic falls within the definition of a force majeure event will depend on the precise terms of the agreement between the airline and the passengers. If a pandemic falls within the definition of a force majeure event in the agreement, passengers can seek remedies under the agreement and/or under the law generally."

Lawyer Chia Boon Teck of Chia Wong Chambers said passengers may also be able to rely on the Unfair Contracts Terms Act and the Frustrated Contracts Act to argue that the terms are unfair or that the contract is frustrated and seek a full refund from the airlines. But taking such a route may not be worthwhile as legal costs are likely to outweigh the value of the refund.

"Passengers may want to appeal to the airlines to exercise goodwill in return for customer loyalty and reach an amicable compromise," said Mr Chia.

Mr Ng of Alton Aviation Consultancy added: "While an airline can curate its brand image through marketing campaigns, policy decisions - such as refunds - can have a lasting impact on consumer perception of the airline's brand and will certainly influence their future travel buying behaviour."

 
A version of this article appeared in the print edition of The Sunday Times on June 21, 2020, with the headline 'Inconsistent refund policies for flights cancelled due to pandemic'. Print Edition | Subscribe