Ghost Fares And Extensions: What To Do With Flight Credits For Covid Cancellations

In early 2020, Siobhan Hannan found herself in a game of chicken with an airline. Her teenage daughter was booked to fly to Singapore, accompanied by family, as Covid-19 cases were starting to escalate abroad. So that she could obtain a refund on the fare, Hannan was hoping the airline would cancel the flight. But even as case numbers grew, Singapore didn’t close its borders and the flight wasn’t cancelled. Eventually, unwilling to send her daughter overseas as the pandemic began to rumble, Hannan pulled the plug on the trip.

Instead of a refund, she was offered a flight credit. Two years down the track, Hannan and her family are still yet to successfully travel anywhere using that voucher.

She says the airline has in effect “had $1,600 of mine for over two years now. They have my money and they won’t give it back.”

Hannan’s situation is not unusual. Research from consumer advocacy group Choice found that one in five Australians with pandemic-acquired travel credits across all airlines have been unable to use them – or secure a refund.

A widespread problem

Research by consumer group Choice found that 72% of Australians who’ve had a flight cancelled due to Covid-19 received a flight voucher instead of a refund, and 21% of those who’ve tried to use their flight voucher have been unable to.

The main reason consumers have been unable to redeem their vouchers is that many came slapped with a 12-month expiry date – nowhere near enough time for borders to open and the travel industry to get back up and running.

Obscure terms and conditions have also complicated matters. Some credits won’t cover the cost of things like fuel levies and taxes, forcing customers who want to use their vouchers to pay extra cash on top.

Many vouchers can only be redeemed once – meaning that if you have a $2,000 credit from a cancelled international flight and can only find a $300 domestic route to use it on, the balance would be forfeited.

Most airlines also have longstanding policies that won’t let consumers change the name on a voucher. This means credits cannot be passed (or sold) on to a friend or family member. Even though Hannah had bought her cancelled fare, she was unable to redeem the credit herself – it could only be used for a flight taken by her daughter, who is a minor.

“What we’ve seen from this research is that the terms and conditions placed on these travel vouchers just make it unnecessarily difficult for people to use them,” Dean Price from Choice tells Guardian Australia.

Onerous though they may be, airlines are within their rights to impose these sorts of conditions.

So what can you do?

If you’re still sitting on unused vouchers, your best bet is to try to negotiate a longer expiry date – something the Australian Competition and Consumer Commission (ACCC) tells Guardian Australia it is encouraging travel providers to offer.

It’s also the course of action Choice advises.

“We recommend that people who have vouchers contact the airline and see if they can get greater flexibility than they have been given so far,” Price says. “And if that fails, then we would highly recommend that people get in touch with their state or territory fair trading or consumer protection department and make a complaint to them, so that there is a record of what’s been going on.”

The ACCC also points out that most credit expiry dates are the date by which the credit must be used to make a booking, not the date by which consumers must travel. Many travel providers allow you to book a year in advance of the date of travel, meaning you could use soon-to-expire credits to (perhaps optimistically) secure a holiday in early 2023.

If you booked through a travel agent, there is another possible workaround. Hannan eventually booked a flight for her daughter using part of the credit (a domestic holiday the family are still yet to take, and hope won’t end up being cancelled). Instead of forfeiting the balance, her agent booked a “ghost fare” with the airline, that can be redeemed in the future.

“I would have lost the balance without that,” Hannan says. “I wouldn’t have known how to do that, or that it was a possibility.”

What about a refund?

If you no longer feel comfortable travelling, you could try to pursue a refund. However, your odds of getting one may not be great – Choice only found one consumer who managed to get their travel credit converted to a real refund, after six months of haggling with the airline.

“We know that people have had a lot of trouble trying to get in contact with the airlines, but we would encourage people, if they have the energy, to push for a full refund,” Price says. “We know that people have complaint fatigue, we know that people have already spent hours on the phone to the airlines trying to get a refund.”

“But if you do have the energy, we definitely recommend pushing further to get the refund that you deserve.”

While Hannan hopes the “ghost fare” workaround has saved the balance of her travel credit, the long process has left a bad taste in her mouth.

“I just find it extraordinary that consumer protection has failed so many people in this instance,” she says. “If I walked into a shop and bought something that turned out to be faulty, I’d take it back and I’d get my money back. It’s pretty simple and straightforward. I think consumers should have that basic and really simple consumer protection, no matter what good or service they’re buying.”

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