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$12.8 Billion Was Refunded To Travellers In 2020 By US Airlines, Says Industry Group


$12.8 Billion Was Refunded To Travellers In 2020 By US Airlines, Says Industry Group
The head of airline industry trade group of the United States Airlines for America (A4A) said in a letter to lawmakers that during 2020, a total of $12.84 billion in cash refunds was given by 11 airlines of the country to customers because of the Covid-19 pandemic that had virtually stopped air travel.
The manner in which airlines in the United States have handled of redemptions for flights that were cancelled during the pandemic has drawn criticism and backlash from passengers and some lawmakers.
A call to airlines to issue cash refunds to customers irrespective of whether the cancellations were done by the airline or the traveller was made earlier this month by US Senators Edward Markey and Richard Blumenthal.
Many carriers encouraged customers to accept vouchers for future travel instead of cash, acknowledged Nicholas Calio, A4A chief executive. He however said that such a measure was undertaken with no "ill intent" but rather to avert possible bankruptcy declarations of the airlines.
"The facts clearly show that U.S. airlines have maintained a steadfast commitment to the traveling public over the course of the pandemic and routinely issued refunds in accordance with all federal laws and regulations," Calio wrote in a letter to the two senators.
In addition to the billions of dollars of travel credits that customers are now using "at a rapid clip" to book fresh flights, the airlines also made the cash refunds which accounted for about 20 per cent of airline revenues last year, Calio also said.
Calio said in the letter that about 10-15 per cent of the monthly ticket sales of the airlines is accounted for by the redemption of vouchers by customers and this trend is also expected to increase in coming months with the ebbing down of the Covid-19 pandemic and the reopening of the markets and venues.
Following record losses last year because of the pandemic hit, it is forecast that airlines would likely return to positive cash flow because of an anticipated surge in leisure travel during the summer as more Americans are getting vaccinated against the coronavirus.