Global airlines cannot afford to refund the cost of tickets cancelled due to the crisis caused by the coronavirus pandemic, stated the Director General of the International Air Transport Association (IATA), Alexandre de Juniac, as operators are issuing vouchers instead to preserve cash for survival.
Consumer protection associations have criticized airline operators for violating rules and not refunding ticket costs.
IATA explained that one-third of global airline employees are either on technical unemployment or have lost their jobs.
Recently, IATA officials estimated that government fiscal measures and central bank actions are expected to result in higher demand for air travel in the fourth quarter, following an extended quarantine in the second quarter and a weak situation in the third quarter.
However, IATA warned that airlines face severe short-term difficulties as the economy is on the brink of recession.
IATA represents approximately 290 airlines worldwide, equivalent to 82% of global air traffic.
Frequently Asked Questions
Why are airlines refusing cash refunds?
Airlines are issuing vouchers instead of cash refunds to preserve liquidity and ensure survival during the severe financial crisis caused by the pandemic.
What is the current employment status in the aviation industry?
According to IATA, approximately one-third of global airline employees are currently facing technical unemployment or have lost their jobs entirely.
When does IATA expect air travel demand to recover?
IATA anticipates a recovery in demand during the fourth quarter, supported by government fiscal measures and central bank interventions.