South American carrier LATAM is rolling out a new and innovative way to raise some quick cash to sustain itself through this pandemic. Unveiled recently, the program is called #TravelAgain, and it puts forward an exciting proposition: Buy a travel voucher now, and the longer you wait to redeem it, the more it will be worth. So is it a good deal? Let’s find out!
Buy now, redeem later
What LATAM is offering through its #TravelAgain vouchers is rather unique and something we’ve not yet seen with any other airline. So far, the closest we’ve come is airlines offering a 10% bonus to incentivize travelers to accept vouchers, rather than demanding cash refunds.
However, with LATAM, a $500 voucher purchased today could be redeemed for $650. That’s a 30% bonus and something worth looking at! If we understand the airline’s FAQ‘s correctly (translated from Spanish), here is how it has structured its program:
- These $500 vouchers cannot be exchanged within the next three months. This seems fair – especially because most operations are suspended, and travel restrictions mean that many are unable to fly anyways.
- However, after waiting three months, the value of a $500 voucher is now $575.
- From there, it gains $25 in value for every month you wait, up to a maximum of $650 after six months.
From a pure investment point of view, a 30% return after six months sounds pretty great! Surely there has to be a catch…
The fine print
As the old saying goes, if it sounds too good to be true, it probably is.
We’re not saying this is a scam or false advertising by any means. But there are some things to be aware of before you conclude that this is the deal of a lifetime.
Here’s what you should know:
- If the amount of your voucher is greater than the cost of the service exchanged, you’ll have to contact the Call Center within seven days of redemption to get a travel voucher for the balance. While not a deal-breaker, no one likes to spend time on the phone with a customer service agent – especially not if you have to wait for hours to talk to someone.
- The voucher is only valid for 12 months from the date of purchase. This means there is, at most, a nine-month window to redeem, considering you have to first wait three months. But if you want to let your voucher ‘fully mature’ to its full value, then you’re left with only six months to use it. According to the FAQs, however, if you redeem your voucher and there’s money left over, it’ll be re-issued as a voucher which will be valid for another 12 months.
- This is probably the most important part of the program: The airline says that the voucher will not cover fees and taxes. These must be paid separately. We’ve talked about this crazy rule before as it pertains to unlimited travel passes. Sometimes taxes and fees account for over half the ticket price!
There are a few more terms and conditions to be aware of, which you can find on the program’s FAQs page.
From an aviation industry perspective, this sounds like a great way to raise some much-needed cash now. This is essentially borrowing money from customers, which may allow the airline to avoid the fate of other carriers: issuing warrants, going into administration, seeking more government bailouts with extensive conditions.
On a perhaps more cynical note, the airline could, in theory, manipulate the actual value of these vouchers by merely inflating the cost of its flights and services in the months to come. We often see something similar with the way airlines adjust their frequent flyer programs and redemption charts every so often.
Finally, travelers are still going to have to pay cash for taxes and fees, which certainly eases the burden for airlines when it comes time to redeem these vouchers. Perhaps this doesn’t matter as much if you’re aiming to fly business class somewhere since the full value of the voucher will cover the flight before taxes and fees.
Ultimately, whether or not this voucher program is valuable to LATAM travelers will highly depend on their expectations and how they plan on using their credit. If you make your purchase knowing about these conditions, you’ll probably be satisfied when you redeem your $500 for $650.
But that’s our opinion. What do you think? Is this program a good deal or too full of exceptions? Let us know in the comments!