Thousands of Kenya Airways customers are faced with the choice of accepting travel vouchers or waiting for uncertain cash refunds for tickets unused due to Covid-19 flight cancellations.
The national carrier, in an interview Tuesday, admitted that it is grappling with a huge backlog of refund applications stretching back to early last year, when countries shut down their borders to curb spread of the coronavirus.
The airline, like its peers across the world, is now asking customers to accept vouchers which allow them to travel in future, while conserving the much-needed cash to remain afloat.
“When the crisis hit, we stopped flying and this is why we cannot honour in cash all those seeking refunds,” said the Kenya Airways (KQ) Chief Commercial officer Julius Thairu while declining to reveal the number of customers owed or the amount they are claiming from the carrier. But he disclosed that the majority are from Europe.
Short of cash
While customers are hesitant to take vouchers due to the lingering international travel uncertainties, KQ says it is short of cash to refund ticket holders as it had committed costs based on the advance revenues from the seat sales.
But Mr Thairu says that the airline is considering refunds on a case-by-case basis, as he explained that ticketholders would not lose their money.
“The voucher is not just a KQ approach. It is in line with industry standards. Customers must rest assured that we cannot take their money. That will not happen,” he said.
KQ says on its website that processing of the travel vouchers may take up to 21 days due to the high volume of requests it is receiving.
Customers who have accepted the voucher offer have up to one year to travel. On expiry without redeeming the vouchers, the airline will give them an option of extending the vouchers for another year, or taking a cash refund.
Customers also have the option of converting the voucher to redeem any other services offered on the airline including additional baggage or seat upgrade.
Mr Thairu says KQ is also working with agents to reach out to all customers and resolve their claims. He says more than 80 per cent of the affected customers had reached out to KQ directly on the refunds.
“We are engaging with the agents. What we know so far is that most of the customers have accepted the voucher system. There are still a few cases who want cash refunds,” Mr Thairu said.
Travel restrictions in Europe have limited voucher use options for these customers.
Refunds are also the number one customers’ complaint globally, accounting for 80 per cent of all grievances against US airlines by August 2020, up from the fifth complaint category in August 2019.
Kenya Airways has remained in the loss-making territory for over five years. The government recently advanced the carrier a Sh10 billion bailout to keep it afloat.
This comes at a time when the airline is struggling to generate additional cash coming from months of zero revenues.
Last week, the airline launched a new product allowing passengers concerned about social distancing to book an extra seat or row on their flight.
The service — dubbed Economy Max — targets flyers who want extra space for in-flight safety.
Passengers are allowed to book a seat or the row next to them between 48 hours and three hours of travelling.