ASK GEORGIE
Can you get a refund on an airline ticket?
EVER tried making last-minute travel reservations and rued the fact you hadn’t booked months earlier? If you’re booking a flight at the 11th hour, you’re not only going to pay dearly for your seat, but you’ll be lucky to get one. Why, then, should you forfeit your money if you cancel?
Last week, two readers mailed me about the issue, both involving the same airline.
The first, Bernadette Stafford, said: “I booked a flight with Safair for September 22, 2017. Unfortunately, due to unforeseen circumstances, I needed to cancel. When I phoned them, they informed me that there was no refund for a cancellation.”
The second complaint came from Emmanuel Kazadi. He bought a ticket to Johannesburg from Cape Town on August 24, to fly four days later. But then his traditional healer forbade him to fly that day, Safair didn’t accept the certificate and he lost out.
That sick note didn’t pass muster though: A labour lawyer, who declined to be named, said such notes – whether from medical doctors or traditional healers registered with the Traditional Health Practitioners’ Council of South Africa – must include vital information such as physical addresses, the medical doctor or healer’s qualification and practice number, date the patient was seen, how long they have been booked off etc to be valid.
It got me wondering: why are budget airlines refusing to refund consumers their ticket prices? The Consumer Protection Act says advanced bookings can be cancelled at any time, subject to a reasonable cancellation policy, and blanket “no-refunds” policies are not allowed. Yet some airlines refuse to refund while Safair insists on a 45-day cancellation period for a partial refund.
I asked Safair about it. Kirby Gordon, its head of sales and distribution, said: “Any ticket can be cancelled at any time, but is not always eligible for a refund. To work around this, we offer customers the opportunity to make changes to any ticket (routes/times/travellers), which are subject to the relevant fees, up to four hours before the flight departs.”
Refunds are a different matter. “(We offer) some leniency above the basics as far as is commercially possible.”
Stringent rules have been put in place around full refunds. These are given only if customers are hospitalised or have died (both supported by relevant paperwork); tickets are bought through direct marketing (and cancelled within five days of purchase); the flight is cancelled; or the plane was overbooked.
For a partial, 50% refund, Safair customers would have to be deemed medically unfit to fly, or the booking was cancelled within 45 days of departure.
“You’ll find that (the latter) is a unique clause to us and not something you will find on any of the other low-cost airlines that make no provision for the cancellation of advanced bookings. We feel we have a 50% chance of selling a ticket again if we have a minimum of 45 days or more.
“Our firm intention is to be South Africa’s favourite airline. We respect that in order to do so, we need to develop the best sets of rules and terms and conditions to protect both the customer and the commercial viability of the airline. While rules are valuable and necessary guidelines, it’s the aforementioned principles that underline them that are most important to us and we gladly assess every case based on these principles.”
Yet the 45-day cancellation period seems extraordinarily long and the CPA is not clear-cut about what can be considered “reasonable”.
Rosalind Lake, the director at Norton Rose Fulbright, notes consumers must be allowed to cancel a ticket at any time regardless of the airline’s policy on notice periods – the length of notice given will influence the size of the penalty the airline can impose.
“Entirely non-refundable tickets are problematic under the CPA. Airline tickets usually comprise two components, the fare component and taxes, including airport taxes. Some of these taxes the airline has to pay over only if you fly. Therefore, if you cancel your ticket, they could possibly retain the airfare portion of the ticket, but airlines are not entitled to keep the portion you paid for taxes if these are paid on a per passenger basis.
“Even if an airline can show its loss is equivalent to the total fare paid (this is possible on low-cost airlines), it is not entitled to keep money that you paid for taxes.
“Suppliers are entitled to charge a reasonable cancellation penalty commensurate with the loss they have suffered (unless the passenger dies or is hospitalised), and in particular how long it will take to find a new customer. When it comes to airport taxes, if the airline does not have to pay these over because you cancel your ticket, it has made no loss and therefore should, at the least, be refunding the money you paid for airport taxes,” Lake said.
Broadly speaking, the sooner a booking is cancelled, as per the CPA, the greater the refund should be.
To determine the “reasonableness” of the cancellation charge, Gordon said Safair considered what its competitors did. “Our competitors charge a 100% cancellation fee – or effectively (denying) a refund.
“Determining the ‘reasonable amount’ and the ‘reasonable potential to resell’ was a difficult task. What we did was get a statistical evaluation of the sales of our seats to establish an opinion based on fact. The finding was that, on average, we sell half the seats on a flight within 45 days of departure. At this stage (45 days) there’s a 50% chance (on average). Forty-five days before departure, the chance is under 50% and 46 days before departure, the chance is just over 50%. Based on this, we felt that it would be fair to use this as the cut-off point for whether a flight reservation was going to be refundable or not.”
Gordon said “refundable” ticketing options were available with most airlines, but they usually cost more. It’s a type of self-insurance premium for the airline to protect itself from financial losses should the seat remain empty.
“Airfares are expensive purchases and people tend to feel that airlines make large margins as a result of this, but this is not the case. The truth is that operating costs are high, which is why fares are generally expensive. At no point do we, or any of our competitors, operate with the will or intention to be punitive towards customers, or greedy. All we seek to do is establish terms of engagement with our consumers that allow us both freedom to achieve what we want, but without either party causing any undue harm to the other. From the consumer side, it’s easy to understand how not receiving a refund costs the consumer, but it is more complex to understand how issuing full refunds after having had seats taken out of the market can harm the airline.”
Last year, AP reported that airlines now get a quarter of their revenue from fees and one of the biggest is the cost of changing or cancelling a ticket. Airlines are also benefiting by reselling the cancelled tickets and by charging ancillary fees for checked luggage, seat reservation and on-board snacks.
To ensure you don’t lose out, make sure you’re covered by selecting flexible or refundable tickets and read the terms and conditions and cancellation policy before you buy. They cost more, but it will allow you to amend your schedule without additional charges and covers you if you miss a flight. Or, try to resell the ticket – you might have to pay for the admin charges but you could recoup some costs. If you do try to receive a refund you are entitled to and the airline refuses, you should consider lodging a complaint with your provincial consumer commission.