KLM Bows To Cash Refund Pressure From Passengers

Dutch flag carrier KLM is updating its policy on vouchers and refunds. Today, the airline updated its policy, now offering a choice of travel voucher or cash refund for flights affected by the coronavirus pandemic. The update seems to come as a result of a change in Dutch government policy, which came from “the latest recommendations of the EU Commission.”

KLM Bows To Cash Refund Pressure From Passengers
KLM previously offered travel vouchers that could be redeemed for cash, but only after a 12-month waiting period. Photo: Chris Loh/Simple Flying

“KLM will therefore adjust its policy accordingly for passengers whose flight may be cancelled in the coming period. These customers will be offered the choice of a voucher or a cash refund. However, in view of the magnitude of this crisis and the number of cancellations, it may take longer to process these transactions.”

KLM’s previous policy

Before this latest announcement, KLM was issuing refund vouchers for tickets booked on canceled flights. The benefit of these refund vouchers, compared to most airlines, is that they could be redeemed for cash after 12 months. However, this was only possible if the voucher was not (fully) redeemed.

The change is a result of the latest recommendations of the EU Commission, which the Netherlands Minister of Infrastructure and Water Management has responded to.

KLM Bows To Cash Refund Pressure From Passengers
Vouchers could be redeemed for cash after 12 months. Photo: Chris Loh/Simple Flying

Of course, it seems as if regardless of whether or not the Dutch government supported travel vouchers in the first place, KLM had the power within itself to offer cash refunds if so desired – as any business would.

Most airlines, however, have become increasingly protective of their cash and have made it difficult or ‘not possible’ to acquire a refund. At least with KLM, vouchers could be exchanged for cash after 12 months.

What are other airlines doing?

On the other side of the Atlantic Ocean, there is a legal storm brewing in Canada’s aviation sector as a class action lawsuit takes shape against Canadian airlines. This is due to an unwillingness to offer refunds and instead issue travel vouchers valid for 24 months.

In the United States, a small group of lawmakers joined together to announce a new bill yesterday. The Cash Refunds for Coronavirus Cancellations Act of 2020 will require airlines and third-party ticket sellers to offer full cash refunds for tickets (plus ancillary fees) for cancellations regardless of whether the airline or a passenger cancels a ticket. While this is not yet law, the US Department of Transportation has been in support of full refunds for weeks now.

Emirates, Airbus A380, Storage
Emirates, at one point, said it had nearly half a million refunds to process. Photo: Emirates

Simple Flying has reported extensively on airlines and how they have been dealing with refunds for passengers. It seems like many carriers have been allowing refunds without much of a fight – although it may take some time for the cash to get back to customers. Last month we reported that Emirates has almost half a million refunds to process. Finnair itself had 100,000 as of late April.

Since the beginning of April, Irish low-cost carrier Ryanair has been refusing to issue refunds for canceled flights until the coronavirus situation has eased. Emails received by passengers booked to fly suggested that the airline was unable to process cash refunds due to not having staff to process the payments. Seemingly against EU rules, this drew extensive backlash from passengers wanting their money back.

Schiphol KLM Planes
KLM plans to add perks to its vouchers to encourage their uptake instead of refunds. Photo: Chris Loh/Simple Flying

Conclusion

It’s certainly not an easy situation for the airlines or passengers requesting refunds. However, this looks like a big win for customers – many of whom are out thousands of dollars (or euros) due to canceled flights.

KLM, however, warns that customers may have to wait some time to receive their money back, saying “in view of the magnitude of this crisis and the number of cancellations, it may take longer to process these transactions.” It continues by saying, “KLM will, in the near future, also present a plan to make all vouchers more attractive by adding extra perks.”

What kind of perks would you like to see added to a voucher to convince you away from demanding a refund? Let us know in the comments!

33 Shares: