Another round of airline groundings due to the CoVid-19 and airlines are back at behaving as if it is business as usual, opening up the sale of tickets for future flights. The first round of tickets that were opened up from April 15, 2020, is now being given out as credit shells to customers if they were scheduled to fly by May 3. This situation will repeat itself if air travel is not allowed to resume on May 4, 2020, as well.
What we see are a lot of troubled customers on social media for one. People who want their money back, and are foxed about why they can’t have it back because they can’t travel. Airlines tell them in sweet language that “they got you covered”, while this money could be put to more uses right now and should not be left in the airline’s pockets. While I empathise with the entire aviation world, and I am looking forward to flying again when I can, I believe they should be fair and not be making their cashflow problems those of the customers by keeping the customer’s money in their pocket for no explainable reason. If they need more money on their books to refund to their customers, the airlines should either get investors or take a loan from a bank or an NBFC.
Airlines in other jurisdictions have been already reminded by their regulators, such as the Department of Transportation in the USA, that for whatever reason there is a cancellation, including CoVid-19, airlines have to meet their obligation of offering a full refund when there is a schedule change or cancellation. In India, there is no such reminder that has been issued to the airlines, and at the moment, regulators are not commenting on this critical issue for the passengers.
Customers, on the other hand, are looking for all the information they can on the issue. Look at the spike on Google for people looking for information about Credit Shells.
Here are some of the policies from various airlines at the moment:
- IndiGo: Credit Shell for bookings cancelled up to April 30, 2020. Shell valid until one year from date of creation. Pick your date as per your convenience. Only the same passengers can use the credit shell. Re-use the shell if more money remains.
- SpiceJet: Credit Shell will be provided to you for one year. Shell valid for travel by February 2021. Bookings for travel till May 30, 2020, can be rescheduled for free one time till September 2020.
- GoAir: For new and existing bookings – travel between March 19 to May 03, 2020, GoAir is automatically protecting your ticket and fare for travel up to May 03, 2021. You can use the value of your ticket for travel on a future date and any GoAir sector. While sector change is permitted, a name change is not permitted.
The point I am trying to make is, there are quite a few problems with the current approach, where airlines are the judge and jury on the situation, pretending to act to our benefit, aiming to get us to follow a contract we never signed up for. The new offers are all one-sided and loaded in favour of the airlines.
- Name changes not permitted. This is a pretence. Let’s say a person had never travelled by air before and does not have any reason to travel again. Now, the airlines Insist they should travel to make good their money the airlines kept to themselves.
- Dates are being decided by the airline. GoAir will allow you to use your credit shell by May 2021, but IndiGo will only allow you to use it by April 30, 2021. Let’s say there is a businessman who came back from the brink of his/her business collapsing due to keeping it shut for 40 days and has no intentions to travel anywhere but to re-establish his business. So, now, Airlines will decide he better travel if he wants to use his money.
- New fares will be applicable only when it helps the airline. Let’s say a customer paid INR 5,000 for a ticket between Mumbai and Delhi. Now, the same ticket is available for INR 2,500 for even the next day flight. Will the airline give you another opportunity to use the INR 2,500 remaining? Only IndiGo has clarified that you can re-use the rest of the cash. But if your new ticket on BOM-DEL costs INR 6,000, the airlines want you to pay more.
- Airlines are not paying us anything to use our money. Airlines in other parts of the world, such as Etihad are offering an incentive to keep your money with them. For instance, Etihad is offering miles, and some other airlines are offering a 10-20% more in ticket value. Airlines in India are doing no such thing.
- Convenience Fees is being stomached by airlines. Airlines charge you anywhere between INR 100 to 400 per person per sector, and now they are trying to chop off this money from the amount they will give you back for re-use later. They would later be chopping off another deduction from the credit shell towards Convenience Fees.
- Breakage. At least till so far, I don’t see any policy from domestic operators which allows us to combine many credit shells in one place. One PNR gets one credit shell only. So when I need to book tickets worth INR 6,000 and I have only INR 3,000 in one credit shell and INR 4,000 in another, there is no choice but to only use one of them.
- Credit Shells with Travel Agent Bookings: Online travel agents play a huge role across the world. The proposition that airlines are making is that customers who booked via an OTA will get their money to be used by calling the same OTA. So, expect to hold on the phone with a long hold, depend on an agent to book your ticket and perhaps pay a second convenience fee. So, hardly seamless and very expensive.
Like you can see, using these credit shells has been hardly made to help the customers but more to help the airlines (yes I know you already know that my dear reader). Perhaps the regulators need to step into this situation and create harmonious rules for all the passengers, for instance, no need to use the same names and give the customers what a fair deal, not the most honest, but better than the situation they are in right now is. Also, someone needs to counter-guarantee these shells. What if an airline evaporates between now and the time to use these credit shells.
What do you think should be done for the customers in the current situation to make it better?
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