Travel agencies ask struggling airlines for full refund of canceled flights
MANILA, Philippines — As the country reopens skies for leisure travels abroad on Wednesday, travel agencies renewed their call for airlines to speed up paying refunds worth over P300 million for canceled flights during the lockdown period.
Airlines are yet to clear an estimated P315.55-million refund requests as of late September based on an “Outlook Survey” conducted by Philippine Travel Agencies Association (PTAA), an industry group, among members.
The amount could be higher, however, as only "close to half" of members reported the balances in the polling. That said, the latest reported balance was already down from P940 million unpaid as of last August.
“We continue to ask for the public’s understanding on their refunds," PTAA President Ritchie Tuaño said in a statement.
“Although we relatively have a good assessment on where we are in terms of the pending refunds, we will go through again with those who have not answered the survey to get the complete outlook,” he added.
By carrier, flag-carrier Philippine Airlines, Cebu Pacific, AirAsia, Emirates and All Nippon Airways accumulated the largest amount of unpaid refunds among 35 airlines mentioned in the poll of travel agencies. Local airlines have not responded to request for comment as of this posting.
That airlines have unpaid arrears are not surprising considering the financial struggles the industry is still trying to cope with. Among themselves, paying up customers was also a struggle. Last September, PAL has only finished refunding 80% of over $300 million it owed prospective flyers. Meanwhile, Cebu Pacific returned P2.4 billion to passengers as of last month, or equivalent to 50% of total requests.
Both airlines previously said their systems were not prepared for the influx of refund requests set off by the pandemic that ushered travel bans and lockdowns since March. That said, carriers committed to paying their dues and beefed up their processing capacities to clear backlogs.
PTAA, however, is unsatisfied so far, saying refunds "have been coming in trickles."
“Considering that three of the top five airlines that have yet to provide refunds fly the domestic route, it gives us pause to evaluate the pending refunds further," Tuaño said. "We want our member travel agencies to have the financial capacity to resume their operations normally,” he added.
The local aviation industry has asked government for help amid depressed travel demand, including direct state loans, credit guarantees and suspension of regulatory fees. But the industry said even these forms of assistance were hardly granted nearly 7 months into the pandemic.
For its part, PTAA said members are working to gain immediate access to financial assistance and soft loans provided under Republic Act 11494 or the Bayanihan to Recover as One Act, which has allocated an additional P140 billion for crisis response programs.
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