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In the wake of the coronavirus pandemic earlier this year, thousands of Britons’ holidays abroad were cancelled as travel restrictions were introduced. Customers are legally meant to receive refunds for cancelled package holidays and flights within 14 days. Unfortunately, due to such high demand, some customers did not receive their money for months.
Other airlines and travel companies only offered their customers credit notes for future flights when travellers were entitled to a full cash refund.
Now, online travel agent TravelUp has launched a campaign for a total reform of the flight payment process to stop passengers being denied airline refunds in the future.
TravelUp, which passes ticket payments straight on to airlines, found itself having to battle to get money back on behalf of customers after COVID-19 cancellations.
The agent is lobbying the Civil Aviation Authority (CAA), MPs and government Ministers to propose a ‘trust account model’ where payment for customer tickets is ring-fenced until flights depart.
The firm is proposing the CAA introduces a new system, in association with the International Air Transport Association (IATA), so money is only transferred to the relevant airline once the flight has departed.
It says the new system would replicate what happens in other areas of the industry.
Ali Shah, CEO of TravelUp, said: “It is completely unacceptable that airlines have been slow in issuing refunds and even worse that some have refused payment. We have experienced a constant battle trying to get our customers’ money back for cancelled flights.
“Many airlines have been guilty of not refunding money quickly enough and some have completely disregarded current legislation.
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“The Civil Aviation Authority needs to be much stricter and look at ways to ensure travellers are not at the mercy of the airlines. We have found it very frustrating and can understand why travellers are so angry.”
Before the pandemic began, TravelUp processed over 1,000 bookings per day and handled 2,500 enquires.
However, this soon changed when flights were grounded and holidays were cancelled.
At one point TravelUp experienced more refund requests per hour than they previously had in one month.
Craig Ashford, Director of Marketing and Communications at TravelUp told Express.co.uk: “We’re trying to push a trust campaign at the moment which forces airlines into holding customers’ money in a trust fund so they don’t get released the money until the flight literally takes off the ground.
“Our trust fund idea was mentioned in the backbench debate earlier this month.”
TravelUp added: “The Travel industry was subject to a recent backbench business debate in Parliament, which attracted an extraordinary amount of interest.
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“Over half of the MPs due to speak were unable due to time constraints, however, the SNP’s Shadow Transport Spokesman, Gavin Newlands, highlighted the issue of whether airline bookings funds should be held in a trust account moving forward.”
Richard Stephenson, Director at the UK Civil Aviation Authority, told Express.co.uk that they were aware of TravelUp’s campaign and the issues surrounding flight refunds.
He said: “We are aware of this campaign and that airline refunds have been a significant issue for consumers in recent months.
“In order to support consumers, we have undertaken a review into airline refund practices and performance during the coronavirus pandemic.
“Our work has secured significant improvements for consumers, with call times and refund backlogs reduced.
“We keep our handling of consumer issues under review and have called for more powers including the ability to impose fines in the past.
“This is something that would bring us in line with other sectoral regulators and would allow us to take stronger and faster action.”
Mr Ashford also revealed what his hopes were for the future in regard to travel.
He said: “Even if we get rid of the [travel] corridors and implement [airport] testing, I think the major issue that we’ve got is what happens when we try and go to other destinations, and if other destinations want UK travellers.
“For us, we would love to see the US borders open again, I don’t think that’s going to happen until well after the election.
“It’s such a big market for the UK for both internal and outbound travel. My hope is that those borders open pretty quickly.”
IATA has been contacted by Express.co.uk for comment.
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