Airline operators have come under scrutiny from travel agents and passengers over the issuance of travel vouchers in place of cash refunds for flight cancelations amid the coronavirus crisis.

The global travel industry ground to a halt last month, following government directives suspending all non-essential air travel. As a result, passengers who had bookings with airlines through their travel agents opted to cancel their itineraries and sought full refunds.

But carriers have so far withheld cash refunds and instead offered travel vouchers, as they struggle to keep their current cash flow intact with the global aviation industry at risk of collapse without adequate government COVID-19 intervention. “Airlines need $200 billion in liquidity support simply to make it through. Without immediate government relief measures, there will not be an industry left standing,” said Alexandre de Juniac, President of the International Air Transport Association.

The decision by airlines has been criticized by travel agents, who are caught in between carriers and consumers. Kenya’s regulator for travel agencies has asked for the intervention of IATA to compel airlines for speedy refunds to passengers who booked flights through agents during this crisis but could not travel, The EastAfrican reported.

Agnes Mucuha, CEO of Kenya Association of Travel Agents accused airlines of taking unnecessarily long to process refunds owed, thus causing customers even more distress. “Several airlines have been responding to the refund requests by issuing vouchers under the name of the booked passenger, instead of issuing a cash refund through the travel agent,” she said. 

“This has caused conflict for the agents, as customers are demanding full refunds paid out in cash because they do not have immediate travel plans in the foreseeable future,” Mucuha added. More so, travel agents are unable to assign vouchers on other bookings due to restrictions, leading to a “stalemate between customers and travel agents,” the chief executive added.

Outside Africa, the United States Department of Transportation and European Commission recently claimed that cash refunds have to be provided to passengers in the event that flights are canceled or schedules are changed significantly. However, this has been a tough point for airlines, with many likely to go out of cash or even bankrupt amid the devastating coronavirus pandemic.

Travelers are owed $35 billion in refunds, according to IATA. Although passengers have the right to a refund, as they did not get the service they paid for, if airlines processed those refunds, many of them would be out of business, de Juniac said in a note. 

IATA, the trade association that represents about 290 airlines or 82 percent of total air traffic, has also indicated that its members are facing an unprecedented high number of global refund requests, a leading cause of processing delays. 

“There is a very harsh economic reality setting in. Airlines cannot cut costs fast enough,” he said, adding that carriers face an “imminent depletion of the cash they need, not just to maintain employment, but ensure that they will be around to support the economic revival when the COVID-19 crisis is over.”

“Passengers have the right to get their money. They paid for a service that cannot be delivered. And in normal circumstances, repayment would not be an issue,” he said. “But these are not normal circumstances. If airlines refund the $35 billion immediately, that will be the end of many airlines. And with that, an enormous number of jobs will also disappear.”

In the U.S., up to 750,000 jobs are at risk if airlines went under, each of which supports 13 additional jobs in the wider American economy, IATA said. Worldwide, a collapse of the industry would translate into the loss of 65 million jobs because one job in the airline transport industry supports another 24 jobs in the global economy.

On the way forward, the IATA head said airlines need time, which either should come in the form of vouchers rather than refunds, or at least a delay in issuing refunds. “This would buy the industry vital time to breathe – surviving the crisis so that they are ready to fly when better days arrive,” de Juniac said.