Tackling air travel refunds and credits in business travel

Unused Air Tickets for Cancelled Flights

By Natasha Samuel, senior product marketing manager

As the world reeled from the significant impact of COVID-19 in early March, something else was brewing in the travel industry: travel cancellations and how the airline industry, travel agents, and travel management companies (TMCs) responded.

For Egencia customers, as border closures and country-specific travel restrictions increased around the world, this meant unprecedented cancellations and the need for rapid support to get business travellers home. Our business travel consultants handled upwards of a 200 percent increase in normal call and email volumes, with over 240,000 contacts managed by customer services in just one week. And that was at our TMC alone.

Egencia also recognised that unusual times called for new approaches. We accelerated the development of several features on the Egencia website and app. We created a new channel for travel consultants to help travellers, with an online cancellation form to prioritise the volume of cancellation requests.  And we supported travel managers with a process to manage mass cancellations, rather than adding an additional burden to hundreds — and at times thousands — of travellers to self-service.

Now, as the dust has settled on the cancellation front, companies are turning their attention to how they can better manage cost, particularly as they plan to move beyond the COVID-19 crisis and book travel in the future.

The 35bn dollar question: Where’s my refund?

Yes, you read that right: The International Air Transport Association (IATA) estimates that in Q2 alone, airlines were facing a major cash crisis with one big contributing factor — 35bn dollars of refundable tickets due to both consumer and business travellers from airlines worldwide.1

Corporations are looking to the future and planning for when their operations start to return to normal.  These businesses want to ensure their cash liquidity is in a strong position to operate, meaning they too are focused on the question of airline refunds.

It’s not that simple

We in the industry — the business TMCs, industry bodies, and airlines — assume that the average leisure or business traveller understands what goes on behind the scenes.  That they will just know that getting a travel credit, or a refund from their original ticket, in a complex air distribution model, in the middle of a global crisis, is going to take longer, and they will just know the reasons for that.

When a business traveller logs onto a website, they’re presented with results that include hundreds of potential flight options from hundreds of airlines.  It’s a simple process in the business traveller’s seat when they book with Egencia.  As a traveller, I log in, I see relevant flight options for me, and I book in less than five minutes on average.

Take a step behind the scenes and what the business traveller doesn’t see is:

  • There are a multitude of Global Distribution Systems (GDS), direct connections, and New Distribution Capability (NDC) that sits behind a clear, simple to book interface
  • How airlines distribute their content when they put their flights on these systems differs. What you see on Egencia may look slightly different to what you see if you book on Expedia for your holiday. Similarly, what you see on another TMC’s website will look different to what you see with Egencia
  • That airlines constantly change their terms and policies, which during the current crisis could mean changing from minute to minute every single day

When you combine the complexity of the systems that allow us to travel anywhere in the world and quickly book online and set off with the volumes of refunds and unused tickets sitting on those same systems, the scale of the challenge becomes much clearer. So, what can we do to help?

Prioritising enhancements and service for customers

After responding to the cancellations in March, Egencia mobilised into a new phase with three key elements:

  1. Managing refunds due to cancellations at the height of the crisis

During March and April, our customer services team submitted and processed over 70,000 refund requests online via the GDS and over 35,000 directly to airlines on behalf of customers. We achieved this by drafting an additional 200 colleagues from across our customer services organisation to support the processing of unprecedented refund volumes.  Egencia has now cleared this refund processing queue.

The other challenge to call out — which alludes to the previous point around frequent airline policy changes compounded by the current crisis — is that refunds are taking significantly longer to process by airlines and are dependent on the individual airline’s own backlog for processing.

  1. Working with our airline partners and the travel industry

Our airline account managers and supply team are in constant contact with airlines, working through the challenges they and our customers are facing. We’re active in several travel industry associations, providing our input and sharing our knowledge on what business travel customers need, alongside our colleagues at other business TMCs. We are working through many challenges unique to business travel, for example, transferring unused tickets between travellers, and even between TMCs and allowing name changes on previously issued tickets.

“What I’m hearing from our current and new customers at Egencia is, what do they do if a traveller leaves their business and has an unused ticket? Can I transfer that and not incur the sometime significant charges associated with that change?  Or, what if a new customer has joined with several unused tickets, how can they transfer that to Egencia for use? And there’s no clear answer. We’re working with our industry associations and with airlines to look at these challenges. 

While not new, there are significant bigger questions we need to address. We’re having these discussions as a group across business travel companies with the Business Travel Association (BTA) weekly.”

— Andrew Clarke, Sr Director, Global Pre-Sales & Onboarding, Egencia (BTA Executive Board Member)

  1. Prioritising customer requests for product enhancements

Egencia has long provided the capability for customers in North America to manage and redeem unused tickets online — launching self-service redemption and visibility of unused tickets for travel managers in 2008.  In 2018, we launched online exchange for air, and in early 2019 activated proactive unused ticket management for customers in several European and Asia-Pacific countries.

Today we have prioritised product development on several air related enhancements.  One of these is accelerating and unifying our unused ticket management offer.  While elements of unused tickets exist around the world for customers today, as noted above, we’re actively building the next generation of a global offer for all customers.

In the interim, keeping customers’ cash flow and business needs front and center, we have released a report to customers in Europe and Asia Pacific, giving them immediate visibility of unused tickets through Egencia Analytics Studio.

We know there is more to do.  Remember the GDS complexity I mentioned above? Well, one of the challenges that all TMCs face today is how we’re able to capture and surface a very basic element of an unused ticket: it’s expiry date.  Today, there’s no consistent, mandated way that all airlines use to give TMCs this information via the GDS.  To combat this disparity, Egencia is working hard to develop solutions to bring this simple visibility, in a clearly defined way, to customers online.

Our top priority right now is ensuring that our customers have access to the data they need, in a way that will enable visibility into pending air credits. Credits that could play a big part in contributing to any company’s financial and business success as they come out of COVID-19. By leveraging these credits, those who manage travel programmes will be better positioned to look at the ways their travel budgets can be optimised in the coming months.  At Egencia, we are committed to help.

Read more about how to encourage business recovery with corporate travel savings

1. “IATA Economics’ Chart of the Week Airline liquidity crunch.” International Air Transport Association (IATA). 3rd April 2020.