[READER QUESTION] Thoughts on Airline Cash Refunds (Props to Flair Airlines)

Today’s post was inspired by one of our readers who suggested that we write more posts regarding the following idea: “Let’s get a bit bold and post articles making airlines accountable for their actions“. This seems like an interesting idea, thanks for your suggestion Ismail! 

No Refunds, Credits Only?

The premise of this post is that airlines have been giving passengers a difficult time when it comes to who qualifies for refunds during the pandemic. You probably already heard lots of stories of people losing their jobs, and really needed a refund back for a trip that was cancelled by the airline. In some cases, the flight might still take off, but due to the government telling the public to restrict travel to essential trips only, it may be more prudent to forgo a trip. For the most part, airlines have been offering free re-booking or future travel credits instead of cash refunds.

In other situations, we are hearing stories about airlines selling tickets for flights that never take off. Since these flights are cancelled, airlines are apparently keeping the money and only offering a travel credits instead. I assume to help with their cash flow issues? Some may feel that they are even doing this on purpose?

So how do we hold airlines accountable for such actions?

Accountability?

My view of this topic might seem like I’m siding with airlines, but I personally feel that I am in the middle between the two sides. But if someone feels very strongly about one side, it may seem like I’m arguing for the other side. But here me out and feel free to share your own thoughts in the comment section below!

Basically, Canada is supposedly a free market (some may argue it’s not). Theoretically, it means that airlines can do whatever they want. They have no obligation to do anything for the passengers. The general rule, I would think, is that when a passengers purchases a ticket, he or she is agreeing to the terms and conditions laid out by the airline at that point in time. Where it gets tricky is when the government gets involved. However, the more the government intervenes, the less of a free market it is.

For example, if the government forces the airlines to issue cash refunds that was not part of the terms and conditions at the point of sale. Alternately, if the government announces lock-downs preventing or discouraging non-essential travel, whereby a passenger gives up their trip against their own will. This actually puts the airline in a difficult position, because the rules would usually favour the passenger. I would think that the whole point of the government getting involved is for consumer protection and not the other way around? Think about it the other way, imagine the government implementing a law that says that favours airlines who would “not have to issue refunds“. Sounds a little ridiculous?

The reality is that airlines need to survive and passengers want their money back when services are not rendered (not a credit). However, airlines do not want to go bankrupt and have to answer to shareholders. Conversely, passengers may call this a “lack of humanity” on the part of the airline.

So does it come down to free market (i.e. let the competition figure it out) or versus more government intervention (i.e. which will probably come with “bailout” packages for airlines)? I think that whether it’s the airline, consumer or government, someone is going to have to give and someone will take. I don’t think the economy would survive if we only have takers and no givers on the other side. Should there be some balance?

That being said, I would like to share my personal experience with an airline, which focuses more on the competition side of things, rather than the political or legal side.

Personal Experience (with Flair Airlines)

I waited to share my experience with Flair Airlines (Flair) because I felt like I had a positive experience and I felt bad writing about it since so many people seem to have a bad experience. I did not want to seem like I was rubbing it in. But now I feel that enough time has passed.

I booked a trip for my family (wife and kid) at the beginning of 2020 for a trip to occur in August of 2020. It was a direct flight between Halifax (YHZ) and Ottawa (YOW) when Flair was offering $78.60 one-way tickets (taxes included) between the two cities as a way of celebrating the new route to start in June 2020. So we wanted to give this airline a try! But when June 2020 rolled around, Flair postponed introducing this new route, so we received an email confirmation that our flight was cancelled.

When I called in to inquire my options, I was expecting to ask about how the travel credit works. Instead, they told me that I was going to get an automatic refund in the next 4 weeks and I didn’t even need to do anything to trigger it. Surprisingly, we only waited one week from the email, instead of 4 weeks, Flair gave us a full refund of $471.60 for 3 round-trip tickets (see below).

Like I said, great experience with Flair Airlines, so props to them!

Conclusion

At the end of the day, I do not know if there is ever going to be a right or wrong answer. I think that we have to ask ourselves if we are the type of person who wants more government intervention or more free market. But I cannot see how it can go both ways.

Personally, in an ideal world, free market probably works out, as long as there is a healthy amount of competition. More rules and regulations by the government usually comes with strings attached. However, we do not live in an ideal world and since Canada does not currently have heavy competition between airlines, I feel that some resemblance of balance will need to occur.

I could probably go on more about this topic. If there is an interest, please let us know in the comment section below! More importantly, what are your thoughts about airline cash refunds?