Travellers Face Six-month Wait For Refunds As Airlines Owe £7billion
Millions of travellers owed refunds for cancelled flights face months of chaos amid a crisis in the airline industry.
Carriers and tour operators owe an estimated £7billion to holidaymakers whose trips have been ruined by the pandemic.
Under EU laws, customers should get their money back within seven days.
However, the number of cancelled trips means customers are waiting much longer as airlines struggle to deal with a colossal backlog of claims.
Ryanair boss Michael O'Leary warned it will take up to six months for the airline to process 25million refunds as industry leaders fear crisis-hit airlines will be bankrupted (file image)
The sheer scale of the crisis was underlined yesterday as Ryanair boss Michael O'Leary warned it will take up to six months for the airline to process 25million refunds. Industry leaders fear many crisis-hit airlines will be bankrupted.
To weather the storm, they have been urging passengers to accept vouchers towards a future flight.
However, the Competition and phượng hoàng cổ trấn Markets Authority is concerned that many have been pressured into accepting them.
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Last night EasyJet founder Sir Stelios Haji-Ioannou warned that customers who accept vouchers could end up losing their money.
Documents seen by the Daily Mail suggest EasyJet has saved at least £700million, partly by encouraging passengers to choose vouchers.
But Sir Stelios warned that the vouchers, which have little consumer protection, could be ‘worthless' by the end of the year due to the uncertainty facing the industry.
EasyJet founder Sir Stelios Haji-Ioannou warned that customers who accept vouchers could end up losing their money as they have little customer protection (file image)
The tycoon, whose family is EasyJet's largest shareholder, is calling on the company to cancel a £4.5billion contract for 107 new Airbus planes.
He said: ‘If you are a voucher holder hoping to use the voucher to fly on EasyJet in 2021, you must call on EasyJet to cancel the Airbus order.'
EasyJet said customers ‘can be absolutely confident to accept vouchers'.
It follows complaints from consumer groups and MPs, who have accused airlines of using underhand tactics to avoid paying out.
Yesterday the Civil Aviation Authority warned airlines not to ‘systematically deny' refund rights and to pay out ‘as soon as practically possible'.
Ryanair boss Mr O'Leary warned it will take ‘many months' to process 25million refunds for cancelled flights.
This came after reports that the Government turned to Morgan Stanley for advice on how to keep airlines in business. Pictured is Heathrow Airport deserted amid Covid-19 pandemic
He told Radio 4's Today programme: ‘We're working through the March refunds, that will certainly take us two or three months, then we move to the April refunds, then the May refunds.
‘The May cancellations will take us four to six months at the moment to process.' Customers with British Airways - which will no longer serve alcohol on flights to reduce interaction between passengers and crew - say they have been getting refunds relatively quickly.
However, they are being asked to call a customer service line which often plays an automated message before hanging up.
EasyJet is promising refunds within 28 days, but admits this could take longer.
Virgin Atlantic is automatically offering vouchers, but customers have to contact the airline if they want a refund paid within 90 days.
It came as reports emerged that the Government has turned to Morgan Stanley for advice on how to keep airlines in business.
The Wall Street bank was initially drafted in to handle a possible bailout of Virgin Atlantic, but has been awarded a broader mandate covering the entire sector.
Ryanair vows to refund 25million customers in six months: Michael O'Leary insists he will take 50% paycut from £3m salary as he slashes 3,000 jobs - while Heathrow sees 97% drop in passengers in last month
By Amie Gordon
Ryanair boss Michael O'Leary has today cut up to 3,000 jobs but vowed to refund 25 million out-of-pocket customers - as Heathrow sees a 97 per cent drop in travellers in the last month.
The airline said a stringent restructuring programme will begin in July, with some 3,000 pilot and cabin jobs under threat.
Speaking on BBC Radio 4 this morning, under-fire Ryanair Chief executive Michael O'Leary said his stricken airline was facing a backlog of 25 million customer refunds.
O'Leary, whose £3million salary was slashed by 50 per cent for April and May, has agreed to extend the pay cut for the remainder of the financial year, to March 2021.
The CEO, who is worth an estimated £3.8 billion, vowed to give all passengers their money back, but warned it could take 'many months'.
The budget airline added that flights will remain grounded until 'at least July' and passenger numbers will not return to 2019 levels 'until summer 2022 at the earliest'.
Unpaid leave and pay could also be slashed by up to 20 per cent, kynghidongduong.vn as well as the closure of aircraft bases across Europe.
The airline industry is facing dire financial problems after passenger numbers plummeted due to travel restrictions imposed amid the ongoing pandemic.
The number of passengers travelling through Heathrow last month was down by around 97% compared with April 2019, the airport has announced.
The company also said it would operate less than 1 per cent of its scheduled flights to the end of June. Despite most flights being grounded the budget airline are still operating limited services out of Dublin, London, Manchester, Bristol, Cork and Glasgow.
This is part of a wider agreement with European governments to keep flight links open for emergency reasons.
Ryanair's fleet has been grounded since March and will remain so until 'at least July', confirmed CEO Michael O'Leary today
The airline announced the planned job cuts as it revealed it expects to operate under 1% of its schedule between April and June. Pictured, A Ryanair departures board in terminal one at Dublin airport today
Heathrow recorded an 18.3% year-on-year decline in demand to 14.6 million passengers between January and March, while earnings before tax and interest fell by 22.4% to £315 million.
It comes as the airport's chief executive John Holland-Kaye warned that introducing social distancing at airports is 'physically impossible'.