Trouble travel company Flight Centre dumps excessive cancellation fees

Flight Centre has finally bowed to pressure by customers and the consumer watchdog and dumped exorbitant cancellation fees.

Troubled travel company Flight Centre has finally backed down on charging customers exorbitant cancellation fees on bookings they can no longer take.

The Brisbane-based company on Saturday revealed it was waiving cancellation fees where third-party suppliers have cancelled their services because of COVID-19.

Thousands of customers were left outraged when the company was initially charging customers $300 per person to cancel their international bookings in order to get a full refund.

They then reduced to this to a capped charge of $600 for two people or more but this too was seen as too excessive by the consumer watchdog, the Australian Competition and Consumer Commission’s chair Rod Sims.

Domestic travellers were hit with a revised capped charge of $100 per booking.

ACCC Chair Rod Sims said the cancellation fees charged by Flight Centre were too high.

In an issued statement from Flight Centre executive general manager Allisa O’Connell she acknowledged many customers were “frustrated” their holiday plans had been disrupted and they could be “experiencing financial uncertainty as a result of COVID-19”.

“Our business and our industry have also been significantly impacted by the unprecedented travel restrictions that have been implemented to slow the virus’s spread,” the statement said. “However our customers remain our highest priority and to support you at this difficult time, Flight Centre will waive its usual cancellation fees for bookings where the travel provider (eg airline, cruise line or tour operator) has cancelled its service and you are unable to travel as a result.”

The decision comes after Mr Sims said he would be pushing the embattled travel group further to lower the fees.

Flight Centre confirmed the dumping of the fees came only after ongoing discussions with customers and regulators including the ACCC.

Retiree David Evans, 69, had four return tickets from Perth to Los Angeles booked in July for $1000 each through Flight Centre travelling with American Airlines. 

He was outraged by the excessive cancellation fee which would have cost him $300 per customer to get his money back.

Retiree David Evans, 69, had four flight tickets booked to the US that he now can't take due to COVID-19 and has been trying to get his money back from Flight Centre without paying an excessive charge.

He said the latest move to remove the charge was “a great result for consumers”. 

“It’s a shame public companies have to be forced kicking and screaming to do the right thing for their customers,” Mr Evans said. 

“It has taken two months for Flight Centre to admit that their initial response of significant repayment fees to clients was morally wrong.

“In that time the damage to their reputation has been reduced to tatters.”

Students Zoe Rumble, 20, and partner Noah Churches, 21, had a European holiday booked in June which they can no longer take due to the travel restrictions.

Zoe Rumble, 20, and partner Noah Churches, 21, were booked to go to Europe for a month in June and had been fighting with Flight Centre to get all their money back. Picture: Wayne Taylor.

They shelled out $5000 for the trip and were told they would have to pay $600 in cancellation fees.Mr Churches said he was relieved about the dumping of the charges but vowed to never use Flight Centre again. 

“It means that the hard work we put into that money isn’t disappearing,” he said. 

“But next time I’ll book direct with the airline.”

It will apply retrospectively to all bookings cancelled as a result of COVID-19 on or after March 13 for which a Flight Centre cancellation fee was charged.

The fee waiver only applies to Flight Centre’s fees, not the fees airlines or other third-parties impose.

An ACCC spokeswoman said the refund of cancellation fees will also apply to cancellation fees charged by Aunt Betty, Travel Associations, Student Universe, Universal Traveller and Jetescape Travel (trading as Boyjet Travel), which are part of the Flight Centre.

Flight Centre’s decision follows weeks of pressure from the ACCC for the company improve its treatment of customers during COVID-19 travel restrictions.

But Mr Sims said this was not the end of problems for travellers.

“We are continuing to discuss issues in relation to refunds and cancellations with the travel sector and encourage travel providers to treat consumers fairly in these exceptional circumstances,” he said.

“While we know some consumers are very concerned about getting a refund or credit for their cancelled travel plans we do ask people to be mindful of the significant impact that this pandemic has had on the travel industry.”

The ACCC had received more than 6000 complaints relating to the travel industry since the COVID-19 pandemic struck.

Flight Centre said they are processing refund requests in date order and were focused on bookings for travel up to and including 30 June this year.

The company has also offered credit vouchers of up to $200 per person to customers with international or domestic bookings who choose to take a credit instead of getting a refund.

Flight Centre is shutting more than 400 Australian stores by the end of July to significantly reduce its costs.

@sophieelsworth

Originally published as Trouble travel company Flight Centre dumps excessive cancellation fees