There are many reasons which could lead to an airline being grounded, including issues with operating licenses, missed payments and necessary safety checks. We address the difference between a grounded airline and an airline which has filed for liquidation and look at the way forward for consumers.
Featured Image above by photographer Andrey Landin
What should you do when you’ve booked that holiday flight and you receive the frustrating news that your airline has been grounded?
To clarify grounded doesn’t spell the end, it means that the airline has been suspended. The airline may yet recover and take to the skies again. If it is unable to resolve the issue for which it was grounded then the airline will be forced to file for liquidation (the process by which a company is brought to an end, and the assets and property of the company are redistributed).
What are my rights as a consumer?
Attorney Carmen Mckinlay advises that “in terms of the Consumer Protection Act customers are fully entitled to a refund from a grounded airline when services have not been rendered.” The spokesperson of the National Consumer Commission (NCC) Trevor Hattingh said earlier this year that the Consumer Protection Act stipulates that service providers cannot sell something to a consumer that does not exist.
What if the airline is grounded right now but my flight might still fly?
The frustrating truth is that the consumer is unable to act until their flight has not flown and services have demonstrably not been rendered. Once this has happened they can apply for a refund from the airline. If the airline does not resume operations and files for liquidation the customer can apply for a refund but this may take many months while the assets are redistributed. If you took out airline insurance you can apply for compensation from the insurance company.
Will the grounded airline fly?
This depends on whether it can resolve the issues for which it was grounded. In the case of a payment issue, if the creditors assist the airline then it will be able to continue operating.
Is this fraud?
Low-cost carriers operate on very small margins in order to give the customer the cheapest, most competitive flights possible so there is the chance, as with any start-up company that it may fail, however an airline selling flights it believed it would be able to deliver at the time of sale, is not fraud.
When will I get my money back?
This depends on the airline, typically it may take 8 weeks or longer to get a refund from the airline.If they decline a refund, request a statement in letter form stating the reasons for refusal of refund –this will help you in the case that the airline becomes insolvent. Travelstart South Africa can request refunds on our clients’ behalf and will do everything possible to assist our customers.
Other avenues of assistance
In some cases an operating airline may step in to pick up the short fall and accommodate stranded passengers on their flights at a discounted rate. After 1time declared liquidation in 2012, airlines stepped in to help out stranded passengers. However, during the busy holiday season this is less likely.
What if I bought a mix-and-match ticket?
If you purchased a ticket to a destination on the grounded airline, returning on an ungrounded airline you can only submit a refund request on the carrier which has defaulted but not on the other, still functioning carrier. For example if you bought a flight to a destination on Carrier A but booked the return flight on Carrier B and Carrier A is grounded, you will only be able to get a refund for Carrier A. The best recourse, if possible, is to book a new ticket to the destination and still use the originally booked return ticket on carrier B while applying for a refund from the airline for the flight which has not been rendered.
How to prepare for this situation in the future
Check that your carrier adheres to the policies outlined in the Consumer Protection Act as they legally should. They should state that due to the cancellation of its flights and it being unable to “honour the passenger’s reservation resulting in the passenger being denied boarding”, ticket holders are entitled to receive a full refund.
Take out airline insurance and make sure to read the terms and conditions and verify that your low cost carrier is covered by this insurance.
Today’s news that Fitch Ratings has downgraded South Africa’s long-term foreign and local currency issuer default rating constitutes a warning to reckless government spending but also serves as a rallying call to local and international investors and customers to lend support to South African businesses with hope of a brighter 2016 and improved rating. There is certainly space in the South African market for several carriers, as the route between Johannesburg and Cape Town is one of the busiest in the world.