By mid-2020, approximately 100 million passenger journeys were canceled in Europe alone. Many of these tickets were converted into vouchers instead of refunds, allowing travelers to redeem them for future travel. A recent study of finance leaders revealed that an average canceled trip costs a company $889, partly because companies don’t rebook or claim refunds on unused travel vouchers before they expire.
Companies often hold a substantial amount of unused airline tickets as plans inevitably change. The disruptions of 2020 have exacerbated this issue, with some businesses estimating they hold around $1 million worth of unused tickets. Tracking these unused tickets is challenging, and even when companies do manage to track them, they often assume refunds are not possible due to inflexible airline policies.
However, many airlines have relaxed their policies in response to the pandemic, meaning unused tickets could be refunded if redemption isn’t possible before the expiry date. The catch is that these tickets are not automatically refunded; they must be requested.
Case Study: A Canceled Trip
Let’s revisit a scenario from March 2020. Your Chief Commercial Officer (CCO) has a flight booked from Tel Aviv to New York via London for the following week. However, the client she was traveling to see cancels the meeting due to the disruptions of 2020. Your CCO contacts your Travel Management Company (TMC), which cancels the ticket with Airline X. The ticket then becomes ‘unused,’ and the airline keeps the paid fare while issuing a voucher for future travel. Airline X provides a six-month window for redemption.
Segment Cancellations and Unrefunded Tickets
Next, the airline cancels each segment within your CCO’s booking. A part is each portion of a booking, so Tel Aviv to London would be one segment; London to New York another. The same applies to the return journey, meaning there are four different segments to cancel. The airline is now free to resell those seats.
The unused ticket remains active but unrefunded
Subsequently, the airline cancels each segment of your CCO’s booking: Tel Aviv to London, London to New York, and the return segments. The airline can now resell those seats. Throughout the next few months, your TMC regularly reports on the unused ticket, but your company’s travel ban remains in place, leaving no opportunities for redemption. Meanwhile, Airline X changes its refund policy, allowing for partial refunds on unused tickets, but only if requested. Unbeknownst to your TMC, the unused ticket remains unredeemed and unrefunded.
The Invisible Ticket “invisible.”
By August, the ticket is still active with the airline, but reporting from your TMC has ceased, making the ticket “invisible.” There is no way to track its status, value, or expiration date. As a result, the prospect of a refund diminishes, and the unused ticket is forgotten.
Expiry and Loss of Refunds
By September, the unused ticket expires and becomes worthless, ineligible for redemption or refund. Like many businesses, your company lost track of it, assuming the airline wouldn’t refund or lacking the resources to pursue it. Without awareness of the ticket, obtaining a refund is impossible.
How to Reclaim Lost Funds
Oversee has deployed a module that tracks refund policies and potential refund amounts based on companies’ passenger name records. For example, Oversee recently identified around $200,000 in unused air tickets for one client, making up about 20 percent of the corporation’s monthly air spend. The client was unaware these unused fares existed or that they could be refunded.
Due to policy changes, the opportunity to reclaim money through cancellations is significantly higher than before the pandemic. Oversee’s data shows that in the 60 days following April 1, clients could recover 64 percent of air spending through canceling flights, compared with just 30-40 percent in the same period of 2019.
Conclusion
Corporations could be sitting on hundreds of thousands of dollars in unused tickets, running out of time to convert them into cash. If your company has a large pool of travelers, consider using a refund travel policy tracking tool like Oversee’s to gain visibility into unused flights and claim refunds before it’s too late.
