British Airways owner IAG and easyJet are still holding hundreds of millions of pounds’ worth of unclaimed travel vouchers, nearly three years after they were widely used to refund passengers for flights when the pandemic first disrupted air travel.
IAG, which owns airlines including BA, Iberia and Aer Lingus, reported more than €650mn of unclaimed vouchers last Friday alongside its annual results for 2022, when the airline group swung back to a profit for the first time since the start of the coronavirus crisis.
EasyJet had £111mn of unused vouchers on its balance sheet at the end September, according to its most recent results. Rivals Ryanair and Wizz Air are yet to report their full-year results.
The vouchers were given to passengers whose flights were cancelled, and can be used to book future trips with the airlines.
The high number of unclaimed vouchers highlights their controversial use during the pandemic, when some major airlines encouraged passengers to accept vouchers rather than cash refunds as border restrictions first hit their operations and led to a wave of cancellations in the spring of 2020.
Consumer group Which? in 2020 said passengers had complained they had struggled to get through to BA to request cash refunds rather than vouchers.
It said easyJet passengers were able to request a refund online for a cancelled flight, although many chose vouchers instead.
Robert Boyle, a consultant and former senior IAG executive, said the sudden rush of compensation claims in 2020 “was extraordinary and absolutely could have bankrupted all the airlines if they had literally paid out to everyone at the time”.
He added it was unusual for airlines to break out vouchers in their results, and there was no historical comparison to try to estimate how many will ever be used.
“It is going to be an upside of some sort . . . it could be quite a big number,” he said.
But Alexander Patterson, an analyst at Peel Hunt, said the unused vouchers were “less a windfall and more a liability”, given that the cash has been received and customers could use the vouchers to fly.
The Civil Aviation Authority, the UK regulator, criticised the industry for its initial response to the crisis, including a backlog of refund claims in 2020. It said the process improved as airlines recovered as the crisis wore on.
BA said it had “proactively contacted our customers to remind them to use their vouchers” with more than 700,000 redeemed in 2022. Vouchers issued in the pandemic are valid until September 2023.
EasyJet said the unused vouchers accounted for just 2 per cent of its ticket revenue in 2019, meaning “there is a very small proportion of customers who have not yet used their vouchers”.
The carrier added the number of unused vouchers would have fallen since September, particularly as the first two months of the year are typically a busy booking period, when the airline reports strong travel demand.