Coronavirus: Flight Centre to waive cancellation fees in some circumstances

Flight Centre has announced it is waiving some cancellation fees, a move which will be retrospective and comes after an outcry from customers.

With global travel wiped out by the COVID-19 pandemic, many Kiwis have been forced to cancel their holidays overseas. But some have previously told Newshub of their frustration that Flight Centre has been charging a per person cancellation fee.

But the company's managing director David Coombes has now announced that it will remove some cancellation processing fees after listening to both the "positive and negative" feedback.

"This follows on from changes we made last week to reduce cancellation fees for groups and families who have been unable to travel due to the impact of COVID-19," he said.

"Today's change means that we will waive refund fees for all customers in situations where the third party supplier, usually the airline, has cancelled the service that was booked for the customer."

This retrospective move only applies to Flight Centre's own cancellation fees, not those that airlines or other third parties may impose. If these third parties have not cancelled a service, but customers decide to cancel anyway, a fee will still apply.

The company predicts it will process about 15,000 refunds as a result of the virus, which has infected millions of people worldwide and killed hundreds of thousands. 

The decision to waive the fees will cost Flight Centre about $7 million, but Coombes said it is an investment in its customers which it recognises are under considerable stress. 

"We have taken very positive steps to strengthen the company's liquidity position and we are well placed financially to weather a prolonged downturn in demand resulting from unprecedented and unforeseen Government restrictions on travel and trading."

He also said that the move hasn't been done out of fear for legal action and that the cancellation policy was in line with the Commerce Commission's requirements. 

"There will be other agencies and independent operators, including many we supply, who are simply not in a position to make this move. It's important that Kiwis understand that there is a considerable cost associated with servicing the travel industry's customers right now, and very little revenue coming in to cover those costs," he said.

"I urge the Commerce Commission and Consumer NZ to work with us to understand this situation. A robust agency community will be in the best interests of Kiwi customers when we are travelling again."

The company stresses that it has no control over how long third party suppliers take to process customer refunds, with some suppliers quoting up to six months to get the funds back to people due to the unprecedented demand.

In April, Flight Centre said it was temporarily closing 58 New Zealand stores and standing down 300 employees.