The Federation of ASEAN Travel Associations (FATA) has raised concerns that many passengers and travel agents are not getting refunds from flight cancellations as a result of the pandemic. In response to an open letter circulated by the International Air Transport Association (IATA) to the travel agency community on April 2, FATA president, Tan Kok Liang, shared that airlines should issue refunds instead of vouchers which have little or no value should they be liquidated. He said, “As (air) services are (halted) due to the current circumstances, it is a matter of principle to return payments that have been collected from customers.” He warned that lawsuits might result if the matter was not resolved. Tan stressed, “IATA has a duty to include traveller claims as a component of its members’ responsibilities with respect to existing Resolutions and ensure those are respected by airlines in terms of fulfilling contractual obligations with both passengers and travel agencies. Without this action (taken) now, the collapse of the distribution channel is inevitable. IATA recently estimated the industry liability in this area is at US$35 billion and stated that airlines’ most urgent need is to keep their remaining liquidity to pay salaries and face their fixed costs. While we are sympathetic, we remain in our position that taking deposits for future services and the inability to provide refund is poor financial management. Customers’ deposits should be placed in a designated or trust account until services are rendered.” Tan added that FATA is ready to engage in an open discussion at the respective countries Agency Program Joint Council (APJC) or through Passenger Agency Program Global Joint Council (PAPGJC) to resolve the issue. FATA also calls on government worldwide to provide financial resources and reliefs to the aviation and travel industry which is crucial to facilitate industry recovery.
