The Kenya Association of Travel Agents (KATA) has called upon the International Air Travel Association (IATA) to act urgently in compelling the IATA accredited airlines to fast-track refunds processing for the customers who booked flights through travel agents during the Covid-19 crisis period.
KATA Chief Executive Officer Ms. Agnes Mucuha stated through a brief update on the ongoing devastating impact of the Coronavirus on the travel industry in Kenya, that airlines are taking a longer time to process refunds owed to customers of travel agents, and this has created unnecessary anxiety and distress.
“The travel industry grounded to a halt in March 2020 following the government directive suspending all international flights into Kenya. Consequently, passengers who were holding bookings with airlines through their travel agents opted to cancel their itineraries and sought for full refunds.” She said.
“Several airlines have been responding to the refund requests by issuing vouchers under the name of the booked passenger, instead of issuing a “cash” refund through the travel agent. This has caused conflict for the agents, as customers are demanding for full refunds in “cash” claiming that they have no immediate travel plans in the foreseeable future. Similarly, the travel agents cannot assign this voucher on other bookings owing to the issuing restrictions. This has also led to a bad stalemate between the customers and travel agents owing to the inflexibility demonstrated by the airlines issuing the refund vouchers”, the CEO noted.
Ms. Mucuha further reported that “In our engagement with IATA, they have sighted that airlines are facing an unprecedented high volume of global refunds requests, and this has been the the main cause for the processing delays. IATA emphasized that the refunds shall be guided by the airline’s commercial policy guideline while determining the “valid” refund value on the tickets. On the other hand, customers are also facing cash constraints under the current Covid-19 pandemic and they cannot afford further delay.”
She further pointed out that the Travel Industry has grounded to a complete halt, and most travel agents have temporarily closed shop as they don’t have any travel related business to conduct during this time. Unfortunately, their debtors have also deferred payments sighting Covid-19 for the delays. This is exacerbating the situation, and the outlook is very bleak for travel agents and their customers. In Kenya, we have over 1000 registered travel agents distributed countrywide, a majority of whom are SMEs and MMEs with over 300,000 employees.
Travel agents submit refund applications through the airline booking portals or in this case through the IATA regulated portal, and upon assessment of the “valid” refund request, the airline authorizes the “valid” refund through the same portal and remits it to the travel agent. In turn, the agent processes the refund back to their customers, which is in line with the IATA policy guidelines.
Other notable findings in the refunds delay include:
- A majority of Airlines are seeking for government bail outs and relief owing to the negative cashflow impact caused by Covid-19.
- Airlines are opting to issue vouchers instead of “cash” in order to preserve their already constrained cashflow position.
- Kenya has over fifteen international airlines who were on scheduled operations into Nairobi and/ or Mombasa.
The Kenya Association of Travel Agents has pushed for immediate intervention saying that it is imperative that the IATA steps in to provide immediate solutions for the industry.
“There are countless stories of travel businesses working hard to serve their customers transparently and professionally. The truth is that travel agents are not withholding refunds owed to their customers, and they are pursuing the refunds aggressively from the airlines and with the help of the Kenya Association of Travel Agents association.” Ms. Mucuha emphasized.
Travelers can visit the Coronavirus Updates page on the KATA website on https://katakenya.org/corona-virus-updates/ for more information