Agent launches campaign to overhaul flight payments after refund chaos

Online travel agent TravelUp has launched a campaign for a total reform of the flight payment process to stop passengers being denied airline refunds in the future.

TravelUp, which passes ticket payments straight on to airlines, found itself having to battle to get money back on behalf of customers after Covid-19 cancellations.

It said some airlines refused to issue refunds at all and have only offered credit vouchers for future flights.

The agent is lobbying the Civil Aviation Authority, MPs and Government Ministers to propose a ‘trust account model’ where payment for customer tickets is ringfenced until flights depart.

The firm is proposing the CAA introduces a new system, in association with the International Air Transport Association (IATA), so money is only transferred to the relevant airline once the flight has departed.~

It says the new system would replicate what happens in other areas of the industry, such a some travel consortia.

CAA needs to be stricter

Ali Shah, CEO of TravelUp, said: "It is completely unacceptable that airlines have been slow in issuing refunds and even worse that some have refused payment. We have experienced a constant battle trying to get our customers’ money back for cancelled flights.

"Many airlines have been guilty of not refunding money quickly enough and some have completely disregarded current legislation.

"The Civil Aviation Authority needs to be much stricter and look at ways to ensure travellers are not at the mercy of the airlines. We have found it very frustrating and can understand why travellers are so angry."

Pre-pandemic TravelUp processed over 1,000 bookings per day and handled 2,500 enquires.

When flights were grounded, over 122,000 customers had flights cancelled – resulting in an unprecedented volume of refund requests. At one point there were more refund requests per hour than they previously had in one month.

A minority of airlines complied and processed refunds through the existing framework.

But over 100 airlines prevented agents applying for refunds in the normal way and introduced more difficult and time-consuming systems.

Many of those more complicated refunds are still pending.

To cope with the volume of customer enquiries, TravelUp restructured its business and introduced new ways of working, reopening phone lines as soon as safe to do so and increasing its customer service team from 15 people to 60.

TravelUp also developed and launched a new dedicated section of the website where customers can easily apply for credit vouchers and refunds and track the status of their application.

The agency was founded by Ali Shah in 2004 and has a turnover of £327m per year with 700,000 unique visitors per month.