IATA told to compel airlines to give refunds instead of vouchers

The Federation of Asean Travel Associations (FATA) has urged the International Air Transport Association (IATA) to resolve refund issues from flight cancellations due to the Covid-19 pandemic.

FATA president Tan Kok Liang said airlines have to prioritise making refunds instead of issuing vouchers which might have little or no value should they be liquidated.

"The travel agencies are cognisant of the financial difficulties of the airline industry during these times. However, we also expect it would be equally respectful of the rights of the travel agencies.

"More so, to our mutual clients who have entrusted their hard-earned money with the airlines through the travel agencies. 

"As services are put to a halt due to the current circumstances, it is a matter of principle to return payments that have been collected from customers," he said in a statement.

Thus, FATA urged IATA to compel the airlines to process refunds in compliance with the rule of law in the respective ASEAN countries including IATA-set resolutions which have been stringently imposed on travel agents, he said.

Tan said FATA is also ready to engage in an open discussion at the respective countries' Agency Programme Joint Council (APJC) or through the Passenger Agency Programme Global Joint Council (PAPGJC) to resolve the issue on an urgent basis.

He said IATA recently estimated the industry liability is at US$35 billion and stated that airlines’ most urgent need is to keep their remaining liquidity to pay salaries and fixed cost.

"While we are sympathetic, we remain in our position that taking deposits for future services and the inability to provide refunds is poor financial management.

"Customers’ deposits should be placed in a designated or trust account until services are rendered.

“Finally, FATA calls on governments worldwide to provide financial resources and reliefs to the aviation and travel industry which is crucial to facilitate industry recovery," Tan added.

FATA, is the umbrella body for national travel associations within the Asean region. 

The combined number of travel agents under FATA exceeds 7,700 serving a population of over 622 million people in Asean.

- Bernama