Capital A’s aviation arm, AirAsia Group, today has released a statement to inform that it has finalised over 99% of all customer refund requests caused by flight cancellations or delays caused by the COVID-19 pandemic. The remaining 0.8% is still currently being processed and expected to be settled “in the coming months”, it added.
“AirAsia airlines have already paid back nearly everyone,” said Capital A CEO Tony Fernandes in the statement. “Now that travel restrictions have been removed substantially in our major markets, we saw that many of our guests have already utilised their credit shells to start travelling again.”
Credit shells, which Fernandes claims to be the preferred compensation choice, is an open ticket that is issued to customers when an airline holds on to the booking amount in the form of credit. To recap, the CEO previously urged customers to consider this compensation approach instead of refunds in February of last year, noting it to be the “best support” to AirAsia and its staff. On that note, neither AirAsia Group nor Fernandes revealed whether the majority of the finalised requests are compensated through credit shell or cash.
The CEO also took the opportunity to clarify that the AirAsia Aviation Group are separate entities to AirAsia X and Thai AirAsia X – both of which are its medium to long haul affiliate airlines. The latter two, Fernandes explained, are still in the process of refunding their customers with “outstanding credit back” such as travel vouchers equivalent to the amount owed. “[AirAsia X] was in a much more difficult situation with international borders closed, so they were completely grounded for over two years with limited cash flow coming in during that period,” he said.
In the same statement, AirAsia X CEO Benyamin Ismail and Thai AirAsia X CEO Patima Jeerapet also followed Fernandes’ lead, urging their customers to opt for travel credit or vouchers as compensation instead of refunds. As you may recall, the former announced the completion of its debt restructuring earlier this year, which would enable it to write RM33 billion back to profits in the next quarter. “Under the terms of the scheme of arrangement that was sanctioned by the High Court further to our recent debt restructuring, we are legally restricted from making any cash refunds to our guests,” Benyamin explained.
Meanwhile, the latter had recently and successfully filed for bankruptcy protection, which enabled it to implement a rehabilitation plan to bolster its liquidity and ensure full operational capacity. “Thai AirAsia X is processing requests for guests who requested a refund during the COVID-19 pandemic, in accordance with its rehabilitation plan and gradual resumption of operations,” said CEO Patima Jeerapet.
It’s no secret that a great number of customers have been waiting a long while for their reimbursements from either airline. With all three companies still struggling to recover financially, chances of receiving cash-based refunds are slim, therefore making the travel credit option being the more viable form of compensation. But whether customers are actually happy with this outcome, well, that’s a whole different story altogether.
(Source: AirAsia press statement)
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