Help

BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Millions of aviation jobs at risk, airlines can't afford refunds

Reprints
United

(Reuters) — Global airlines warned that 25 million jobs across the world could be at risk from the coronavirus travel downturn and the industry's representative body said airline finances were so fragile they could not afford to refund customers.

The International Air Transport Association has held a series of weekly news conferences, issuing increasingly desperate messages about the state of airline industry, and urging governments to help carriers.

In its latest warning, IATA, whose members include the likes of Lufthansa and British Airways parent IAG, said global air travel slumped by 70% at the beginning of the second quarter, and its Director General Alexandre De Juniac said airlines could not afford to issue refunds. He said customers should accept vouchers.

"The key element for us is to avoid running out of cash so refunding the canceled ticket for us is almost unbearable financially speaking," Mr. De Juniac told reporters on Tuesday.

In the United States, a passenger filed a class-action lawsuit on Monday against United Airlines for refusing to pay a refund after his family’s flight was canceled.

IATA highlighted the loss of jobs and the impact on the world economy if governments let airlines collapse.

Three months of severe travel restrictions plus lower traffic over 2020 could put 25 million jobs at risk, IATA warned, adding that about a third of 2.7 million direct jobs in the airline sector had either been lost or were furloughed.

Airlines are burning through their cash reserves as they try to stay afloat, IATA said, and providing refunds for canceled flights, as rules in many parts of the world such as EU261 in the European Union, require them to do, was not possible.

Consumer groups are angry at airlines for ignoring those rules and say hard-up passengers need the cash just as much as the airlines.

IATA said about $35 billion of tickets were due for refund at the end of the second quarter, and vouchers or a delayed refund was all airlines could offer. IATA has approached governments to ask them not to force airlines to provide cash refunds.

But the U.S. Transportation Department has told airlines they must refund tickets for flights that they cancel, or make a significant schedule change that passengers do not accept, following a rising number of consumer complaints and inquiries.

Separately on Tuesday, an environmental group called Stay Grounded published an open letter signed by 250 environmental groups and charities from across Europe calling on governments to attach climate and labor conditions to any airline bailouts.

IATA has been asking governments for a reduction of charges and taxes to help its members, which represent 82% of global air traffic, survive, and for funds to help restart routes in future.

It said on Tuesday that European countries had agreed to defer air traffic control charges totaling some 1.1 billion euros ($1.2 billion) from February to May.

More insurance and risk management news on the coronavirus crisis here.

 

 

 

 

 

 

Read Next

  • Outbreak could cost South Korean airlines $5 billion

    The Korea Civil Aviation Association has said that the coronavirus outbreak could cost local airlines around 5.875 trillion South Korean won ($5 billion) in lost sales in the first half of the year, if the number of international passengers to the country continues to decline, Business Korea reported. The loss figure could increase if the business environment worsens.