Travel lobby boss urges clients not to cancel plans
Airlines have been hit hard by the Covid-19 pandemic, with most having to ground their planes as travel shrinks to near zero. Our reporter NOEL WANDERA talked to Kenya Association of Tour Agents chief executive Agnes Mucuha on the effects of the pandemic on the local aviation sector. Here are excerpts...
Q: In view of Covid-19 pandemic, where international and local airlines are grounded, have your members started receiving refund requests from travellers who had booked three months in advance for holidays? If so, how is the association dealing with this issue.
A: The government suspended all international flights from operating in the country as at last week for purposes of safeguarding Kenyans from contracting imported Covid-19.
You will appreciate that safety of Kenyans takes precedent under these circumstances.
Domestic travel has not been suspended and this has been operating as scheduled, and of course, with various schedule alterations in view of the 7pm to 5am curfew.
Domestic airlines have taken necessary precautions towards ensuring that their passengers arrive on time as per the stipulated curfew hours.
Q: What is the anxiety like?
A: Refunds have created anxiety for the passengers or customers who cancelled their travel itineraries, and they now have to wait for a longer time for the travel agents in collaboration with the airlines to process their “valid” refunds.
When a passenger buys a ticket through a travel agent or airline, they enter into a direct contract with the said carrier.
Hence the airlines must assess the refund application against the prevailing fare rules on the air ticket purchased, and against the commercial refund policy for the airline.
Upon the completion of this assessment, the airline authorises the refund and transmits the refund value through the IATA billing settlement plan from where a travel agent’s account is debited for onward remittance to the passenger.
However, due to the high volume of refund requests airlines are now taking a much longer time than usual to process these refunds back to the passengers.
We anticipate that the delay could last up to six months owing to the fact that most airlines also sent most of their employees on leave. Hence an unprecedented delay is expected.
However, as KATA we encourage passengers to work closely with our travel agents in managing these refund requests.
Q: Mid-March or thereabouts, the government, through Tourism Cabinet Secretary Najib Balala gave the sector Sh500 million to enable it to recover from the impact of the Covid-19. Is the travel sector a beneficiary?
A: Yes, the travel industry is anticipated to be a beneficiary of the funds. The industry contributes over $1.7 billion in terms of outbound travel with a direct gross domestic product (GDP) contribution of 4.5 per cent.
We are engaging and collaborating closely with the Ministry of Tourism on the aligned utilisation of these funds for purposes of preserving the health of the sector.
Q. If so, how would you wish the money be spent?
A: At this point it is imperative that businesses in the travel and tourism sector are safeguarded towards ensuring that they bounce back post Covid-19.
To safeguard their health, access to working capital and marketing funds post Covid-19 would provide the right stimulus to jump-start the entities back into operation.
Q. Has it been released?
A: We are awaiting further guidance from Ministry of Tourism.
Q: So far, how has the pandemic affected the travel sector in terms of employment, that is, how many have been sent home, if any?
A: In the immediate term, employees have not been sent home, as this is not a humane approach towards the handling of the employees.
Senior management in the sector opted to take a 90 per cent pay cut and proceeding on unpaid leave remains an option should the situation not change in the coming months.
Q. What of monetary losses (from February to end March)?
A: Travel industry lost 50 per cent of its revenues in February, 95 per cent by March, and when we forecast on the forward travel bookings for April onwards, the travel agents are holding NIL bookings!
This is a very catastrophic situation for the tourism industry. It has never been witnessed before, and the sector continues to count losses since international airlines are not operating.
Q. Any measures to stay afloat while we wait for the situation to level-out?
A: Travel industry has been grounded to a halt. We are calling out for a bailout from the government in two ways.
First, to settle all outstanding bills that are owed to the travel agents, as this will release significant cash-flows into the sector.
Second, we are seeking interest-free grants travel agents can access for purposes of maintaining their companies in operation in anticipation of post Covid-19.
We are calling upon our customers not to cancel their travel itineraries but to consider re-booking for a future date of travel.
This will safeguard the sector from being in a zero position when we resume operations at a future date.