Airlines, bankrupt and otherwise, stiff passengers for refunds

Travel agency booths at Incheon International Airport Terminal 1 are almost empty on July 20. [YONHAP]

With the collapse of global air travel, ticket holders are demanding refunds. Many are out of luck and out of money, as some airlines are bankrupt and others are stalling for time.

Those who had prepared for overseas trips months in advance, before Covid-19 became a serious travel issue, are suffering the most.

In February, a 40-year-old working mom purchased tickets for a flight from Incheon to Palawan, the Philippines. She paid 2.4 million won ($2,000) for three people to travel on Eastar Jet, hoping to enjoy summer vacation with her family in early August. But in May, she was told the airline would no longer handle refunds.

When she first called, the cash-strapped airline said it would cost 800,000 won to refund the tickets. Now, she can’t even get through to a call center.

“I asked for a refund from the travel agency and card company, but was told they can’t help unless the airline gives specific instructions,” Choi said.

An office worker was told to pay a million won to get a refund for four tickets on Austrian Airlines that cost 4 million won. The airline didn't answer the phone, and the travel agency didn't help.

“I heard people who canceled flights from a travel agency in January and February still haven’t gotten their money back. Airlines are just telling consumers to wait,” the worker said.

The number of people who filed complaints at Korea Consumer Agency for the damages related to airline tickets skyrocketed to 7,145 this year during the Jan. 20 to July 28 period, up from 1,786 last year.

Those who purchased tickets from airlines that later went bankrupt aren’t able to get a refund because the standard for consumer dispute resolution by the Fair Trade Commission does not include cases involving bankrupt airlines.

Chile's Latam Airlines, Columbia's Avianca Airlines and Mexico's Aeromexico are some of the carriers that have filed for bankruptcy protection. Virgin Australia declared bankruptcy after it failed to get a government bailout.

Credit and charge card companies may be able to help. Users of Visa, Master and American Express can apply for a chargeback within 120 days of the transaction. For UnionPay, the period is 180 days.

With a chargeback, a customer disputes a charge and the credit card company mediates the dispute.

Eastar Jet is known to have more than 6 billion won in account payable to travel agencies. Airlines overseas also have these unpaid obligations, making it more difficult for customers to get refunds.

BY KWAK JAE-MIN [jin.minji@joongang.co.kr]