The background

Like many others, my friends and I have trouble getting a refund from airline tickets, ordered long time ago. Due to the COVID-19 situation, travel agencies and/or airlines are complaining that they are hit extraordinarely by the crisis and more so than other industries and (appearently) more than the individual consumers.

Back in February 2020, my friend and me ordered a round trip for us and our wives to Thailand. Due to work constraints this was a seldom chance, where we as two pairs would be able to travel at the same time. We ordered airlines tickets through "flybillet.dk" (I will not link them!) at a price just shy of DKK 50000 for Brussel Airlines and Etihad.

At the 9th of April Etihad informed us, that the first leg from Denmark to Belgium was cancelled for good and we immediately contacted "flybillet.dk" through the internet (long waiting queues in the phone) and filed a complaint and requested a full refund, as we are entitled to under Danish and EU law. Got a robot-answer later the same day and heard nothing more.

At 9th of June we finally got an answer, but not an answer that indicated that anyone had read the original complaint, but just a note, that if the problem had not solved itself (by magic?) we should state the case again (on the same page as in April). Did so and added additional cancellations (now 3 of 6 legs was cancelled and one futher leg was moved a full day) and requested that the case was decided in 10 working days or we would proceed with a chargeback through the credit card company. The same robot answer as in April was received at the evening the same day.

27th June we got a mail stating the flight was cancelled and that they would contact the airline (Etihad) to see if there was any chance of an refund. Clearly the mail from 9th of June was not read and they took the price by stating the mail of 27th could not be answered.

So as this was unacceptable (we are entitled to a refund, no matter what the airline say) and as the letter was one-way communication, we proceeded with the credit company and are waiting for an answer from them.

How hard is the COVID-19 situation for the travel industry?

As I do not work in the industry, I can not answer this question, but I can make an argumented guess.

The airlines 

No doubt this crisis is hard on the airlines. However, this is not entirely because of the COVID-19 situation, but also due to times and decisions made well before the crisis started. Many people knows or have heard that legacy carriers has hard times due to high salleries and employee benefits. This is hard to cope with for these carriers, but they are one of the reasons this crisis is hard to handle. Fuel prices, aircraft financing, ticket prices and no clear plan on how to move forward is other reasons. The reason is will focus on here, is a industry wide habit of (partly) financing your day-to-day expenses by selling tickets in the future. That's right, the money we give the airlines when we order 2 or more months in advance, are not used for the flight you paid for, but to pay for the expenses today. So this is a big reason for the crisis at the airlines - they did not take you money to finance your actual flight, but to pay their expenses today. If the money was in a bank account wating to pay for the future flight, it would be no problem to refund the money!

The travel agencies

Again, the crisis has hit many industries, but how hard are the travel agencies hit in reality? If we look an the number of employees, I found these numbers for the largest travel agencies world wide, where the largest travel agency group has 24500 employees. Compared to that, CPH/Copenhagen airport has between 22000 and 23000 employees depending on the time of the year. When I add all 20 companies on the list, I get around 150000 employees or roughly double the number of employees in London Heatrow (LHR). That is worldwide travel agencies compared to a single big airport. So based on these numbers, the airports should be hit harder than the travel agencies. So unless the travel agency has to take the hit from a refund by themselves (and then, they have willingly obligated themselves to that in some form of contract with the airlines), then they are not hurt anymore than all other companies, that do not have any day to day sales because of the COVID-19 situation. 

You can't get hit twice!

So either the travel agencies are taking the hit from the refunds and declare bankruptcy, but the airlines are just hit by the day to day consequences like many other companies OR the travel agencies are sending the bill to the airlines and only loosing the day to day sales. Og cause the travel agencies has to return the profits from the sales refunded, but this is not different from other businesses that likewise has cancelled orders.

How about the future?

This is where this becomes very tragic: For my part, due to the incompetance of "flybillet.dk" I will actively ensure, that I never order though a company within that group again. I will even be cautious to ever order through any travel agent again and probably just order directly with the airline in the future. So for my money, there are no recovery for the travel agents in the future.

The airlines will probably also see into a hard future, because their model of selling tickets in the future for cash flow today, will most certainly be hampered by customer, who are less likely to order tickets months before their travelling date in the future.

And even if people want to order a future ticket, THEY DO NOT HAVE MONEY, because they have not been refunded for their cancelled flight.

You can't get hit twice, or...?

Some airlines, agencies and even IATA thinks it should be possible to give the customer a vouncher instead of a refund. However, from the argument above, this will not help at all. As the airlines runs its day-to-day business in part from the income of future trips, and as they can't pay their emplyees and creditors in vouncher, they will need the cash in the future for the daily business. However, there is a smart solution to this: As they industry expect an increase in ticket prices in the future due to reduced production (less routes being flown), it is fully possible the price of a ticket will increase even up to the double or more compared with the price before the COVID-19 crisis. So if you take a vouncher for DKK 50000 today, the same trip when you get the chance to travel can cost DKK 100000 so the customer pays another DKK 50000 and the daily expenses can be covered by this extra income. So the customer can actually get hit twice! So unless a vouncher comes with a guarantee of a similar trip in the same seasonal price-range at the same price, the customer will pay for the crisis of the travel industry, by paying double up on the original price.

Final ranting

As mentioned above, I will not personally buy from any company in the Etraveli group in the future! Them trying to disregard customer law and refer to the rules of the airlines as above the law, is comical as well as tragical. Reports on the internet even suggests, that when an airline has complied the refund request, Etraveli still holds on to the money and does not refund even when they themselves has been refunded.

And, excuse me, how difficult is it for travel agents to talk to the airlines regarding refunds? For a travel agent located in the EU, you contact them one by one and ask how they stand on refunds. If e.g. KLM says, "No refund, vouncher only", the agent asks them "Do you intend to deliver the service?" and if "No!", then "How do you then intend to comply with EU law regarding serices not delivered". You see, if the airlines, here KLM, is responsible for the service to the traveller, then ordinary customer laws apply, and that's a refund. If the airlines take the position, that the agents are the customer and they resell the service to the travellers, then the agents has to refund and then take the airlines to the courts. But in the current situation, the traveller (who in any case is entitled to the refund) is used as a ball in a game between the airlines and the travelling agents.