The Truth About Airline Refunds

As the coronavirus pandemic spread across the globe, many flights got canceled. For many prospective travelers, this meant that their vacation plans were effectively canceled, along with their plane tickets. While some customers managed to get refunds and credits from airlines, others struggled to get the compensation they were rightfully owed, especially with airline companies being overwhelmed by customer issues. When working with online travel agencies (OTAs), the process is even more challenging. Let's discover why airline refunds seem much more complicated than they appear.

How OTAs work

To understand why some refunds are complicated, you need to know where your money goes when you book a plane ticket online. When booking through an OTA like Expedia or Skyscanner, they typically use two types of booking models. The merchant model is where the OTA charges the customer directly for their booking, so the name of the OTA will appear on booking confirmations and receipts. On the other hand, the agency model sees OTAs acting as the agent in the transaction between the ticket buyer and the airline. In this case, the airline will appear as the company you pay on your bank statements. But how exactly do these business models impact your payment process?

Where does my money go?

Ultimately, the terms and conditions of your ticket and the fare are determined by airlines. While your OTA will likely have a customer service department, when you report an issue, the customer service representatives would speak with the airline to resolve the problem on your behalf. Cancellations are just one of the many issues that OTAs have to address, with Expedia reporting over 3,000 separate airline cancellation policies handled by OTAs during the first few months of the pandemic. As you can imagine, this resulted in quite a backlog. But now that the pandemic is subsiding, how long should a refund take to be processed?

How long a refund takes to be processed

When an OTA handles a refund on your behalf, it usually takes longer than if you booked through the airline directly because they're acting as the middle man. Still, if you opt for credits or a voucher in place of your canceled flight, it should take approximately 12 hours to appear in your account. Cash refunds, on the other hand, may take a little longer. Unfortunately, the enormous backlog caused by the pandemic has enormously impacted the wait times for customers' refunds. To relieve themselves of this workload and help customers quicker, many airlines and OTAs offer credits that travelers can use at a later stage. There were also many campaigns where travelers could cancel flights free of charge without penalties or calling customer service. Other companies also gave customers unlimited free date changes for their flight tickets. Still, if you're one of those unlucky customers still waiting for a refund or credit, what can you do to overcome this problem?

What to do if you still haven't got your refund

If you're still waiting for your refund, there's not much to do other than sit tight and wait. While it's taking longer than usual, airlines are still going through customer requests and are issuing refunds, so once they get to you, you will get your money back. But if you don't have the patience to wait, many airlines and OTAs provide a pathway to receiving a credit or voucher instead.