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Jakarta Post

I prefer it in cash: Passengers, travel agents upset over airline refund policy

  • Riza Roidila Mufti
    Riza Roidila Mufti

    The Jakarta Post

Jakarta   /   Fri, April 24, 2020   /   01:32 pm
I prefer it in cash: Passengers, travel agents upset over airline refund policy Passengers line up while maintaining a safe distance between each other at Ngurah Rai International Airport in Denpasar, Bali, following the COVID-19 outbreak. (AP I/Handout)

Air passengers and travel agents are not happy about airlines’ refund policies as the COVID-19 pandemic hits air travel demand. A recently issued government policy that bans all passenger travel further exacerbates the situation.

Chandra Hidayatul Akbar, 24, who lives in Medan, North Sumatra, has to accept the fact that low-cost carrier AirAsia Indonesia will only give him airline credit after his flight on May 16 from Medan to Yogyakarta was canceled by the airline. The credit, which is equivalent to his ticket price, can be used for future travel with the airline.

“Honestly, I prefer a cash refund because credit like this is not flexible,” he said on Tuesday, adding that the credit was valid up to 365 days after being issued. 

He also found the refund process to be complicated. 

Read also: 95 aircraft parked at Indonesian airports as virus puts airlines’ operations on halt

“I failed several times when filing a report via AirAsia’s chatbot and once I succeeded, I needed to wait one week before my request was accepted. Now they’ve told me to wait another month for the credit points to be transferred,” he said, adding that he had yet to receive the points. 

National flag carrier Garuda Indonesia, AirAsia Indonesia and low-cost carrier Lion Air have all offered vouchers or credit rather than cash for canceled flights. 

The Transportation Ministry’s civil aviation director general, Novie Riyanto, said on Thursday that airlines were allowed to provide refunds in the form of a voucher.

"Airlines have no obligation to make the refund in cash, it can be a voucher as long as its value is the same as the price of the issued ticket," said Novie.

The government restricted on Thursday all passenger travel starting on Friday as it worked to prevent people from participating in the annual Idul Fitri mudik (exodus) to curb the spread of the pneumonia-like illness. All air travel to domestic and overseas destinations – both commercial and chartered flights – will be suspended until May 31.

Jakarta resident Dimas Maulana, 33, was also offered a travel voucher instead of cash when requesting a refund for a ticket valued at more than Rp 5 million (US$321.81),  for a flight from Jakarta to Semarang. After filling a refund request at the beginning of April due to the health crisis, Dimas was made aware that the entire process could take up to 90 days. 

Read also: Flag carrier Garuda Indonesia cuts employee salaries by up to 50%

“I understand that the impact COVID-19 has had on airlines is huge, so although I am upset that my ticket can only be replaced by voucher, I’m trying to be OK with that. But, I really hope Garuda’s response can be swift,” he said on Tuesday. 

Lion Air Group stated on Wednesday that vouchers were one option in its refund policy and that the voucher could be exchanged for cash but only under certain conditions. 

Indonesia Travel Agent Association (Astindo) secretary-general Pauline Suharno said separately that customers only wanted their money back in cash, while at the same time agents were not able to access cash refunds from the airlines. The situation adversely affected travel agents' cash flows, she added.

The COVID-19 pandemic has hit the aviation hard as the number of flights dropped significantly following the implementation of physical distancing measures.  

The Indonesia National Air Carrier Association (INACA) said there had been a drastic decline in the number of air passengers since early March, forcing all airlines to cut flight frequency and routes by 50 percent or more. Finance Ministry data on April 17 estimated that national airlines’ revenue loss had reached Rp 207 billion as a result of the pandemic.

INACA secretary-general Bayu Sutanto said disrupted cash flows was among reasons why many airlines had provided vouchers as refunds. 

Read also: Airline employees worried about job security as COVID-19 takes its toll

“INACA reminds our airline members to communicate with their passengers to explain this situation regardless of the refund they give,” he said on Wednesday. 

International Air Transport Association (IATA) CEO Alexandre de Juniac said in a statement on April 3 that passengers had the right to get their money as they had spent money on a service that could not be delivered. However, during this difficult time, airlines were facing an imminent depletion of cash. 

Providing vouchers as a refund that could be used for future travel would give the industry “vital time to breathe” and eventually survive the crisis, he said.

“Without this flexibility, airlines will collapse and jobs will disappear. Accepting a voucher or delayed refund today will mean that the airlines will be around for when we have our freedom to travel restored,” he said.