Flight Centre coronavirus cancellation fees capped after customer anger

Flight Centre is attempting to soothe customer anger over its $300 cancellation charge by capping fees and offering incentives for people to take travel credits rather than refunds.

The travel giant was facing a potential class action lawsuit after customers complained about the $300 per person fee for cancelling flights booked before the coronavirus outbreak, as well as a 12-week delay for refund payouts.

Some customers have had their refunds reduced to zero as a result of the cancellation fees, while others with large groups have been asked to pay thousands of dollars in fees or take a travel credit instead.

In a letter to customers on Friday morning, Flight Centre said cancellation fees would be capped at $600 for international bookings for two or more customers. Domestic travel cancellation fees will be capped at $100 per booking rather than $50 per person.

The company also extended the expiry date for using travel credits from July 2021 to December 2021, after the initial 12-month deadline was widely criticised.

Many customers have declined the offer of a travel credit, believing it to be useless if travel restrictions are still in place. The company’s financial difficulties have also left some customers questioning whether vouchers will be lost.

The company said those who accepted a voucher could get a refund, without having to pay fees, at the end of December 2021.

Flight Centre acknowledged the 12-week delay for refunds had caused significant anxiety among travellers but that airlines, not the travel agent, were to blame for the hold up.

"We are extremely appreciative of your understanding in this difficult time, and we apologise for any inconvenience and frustration you may be feeling," executive general manager Allisa O’Connell said.

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Before this latest effort Flight Centre has defended the $300 fee – which was included in its terms and conditions – saying it covers lost commission, as well as the time and cost involved in managing the refund process.

The embattled travel group is closing 428 Australian stores by the end of July in an attempt to radically slash costs while raising $900 million in fresh equity and debt to last it through the coronavirus pandemic.

Adam Glezer, who had booked a trip to Israel via Europe for his sister's wedding through Flight Centre subsidiary BYOJet, was among the customers considering mounting a class action.

He said hundreds of people had put their hand up to be part of the class action.

For a deposit for a cancelled cruise in Italy, Mr Glezer was offered either a $600 credit or a $600 refund - minus the $600 cancellation fee - for a net return of zero.

The company's subsidiaries include Aunt Betty, BYOJet, Travel Smart, Advance Traders, GOGO Vacations, Topdeck, Travel Partners, Liberty Travel, Round the World Experts and Stage and Screen Travel Services amongst many others.

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