Airlines obligated to provide cash refund for flight cancellations, says MATTA

The Malaysian Association of Tour and Travel Agents
(MATTA) has expressed concerns that many passengers and travel agents may not be getting refunds from flight cancellations as a result of the Covid-19 pandemic.

MATTA Vice President Air Transportation Shazli Affuat Ghazali said, “Airlines should make cash refunds as their top priority and not issue credit notes which may have little or
no value should they go insolvent. While they are being bailed out or given loans to resume operations post pandemic, they must first pay out cash refunds to restore public confidence.”

“It is a matter of principle to return payments collected from customers for services not rendered due to the current extraordinary circumstances.”

“We are disappointed by the silence of the authorities that include the Ministry of Transport Malaysia (MOT) and Malaysian Aviation Commission (MAVCOM),” he stated.

The vice-president also stressed that one of MAVCOM’s functions is to provide a mechanism for protection of consumers and the Commission should have stepped forward to announce clearly what measures are in
place or will be introduced for customers to get their money back.

“Airlines should give full refund for payments made by passengers and travel agents without applying standard terms and conditions, which are applicable during normal times but not in a pandemic. Also, airlines should not differentiate between group bookings for Group Inclusive Tour (GIT) and individuals travelling as Free Independent Travellers(FIT),” he said in a statement.

He also pointed out that the same treatment will hasten refunds across the board and recovery post pandemic. Shazli also pointed out that the country needs a strong and decisive leadership to resolve the issue.

“For example, in the United States, airlines have been warned by their Department of Transportation (DOT) that passengers should be refunded promptly when their scheduled flights are cancelled or significantly delayed. Airlines have long provided such refunds in the aftermath of major but localised disasters, and they should continue with the precedents set in handling this pandemic,” Shazli said.

MATTA is looking forward to MOT issuing a directive to airlines that includes:

• Notifying passengers and travel agents that normal cancellation and rebooking
charges do not apply from the time of Covid-19 outbreak until end of pandemic.

• Granting customers the option for cash refund or available credit can be used within
three years. Rebooking allowed within two years from original date of travel.

• Refunds for flight cancellations must be made in full, including ancillary fees paid.

“But if refunds due to travel agents are unfairly withheld, affected passengers will not be getting back their money. It could trigger unnecessary lawsuits which do not auger well for the tourism industry”, concluded Shazli.

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