Airlines 'Can't Afford To Refund Tickets', Global Aviation Body Says
Airlines cannot afford to refund cancelled flights due to the coronavirus crisis, the head of the industry's representative body has declared.
And carriers are issuing vouchers instead as they conserve cash to survive.
"The key element for us is to avoid running out of cash, so refunding the cancelled ticket is almost unbearable financially speaking," International Air Transport Association (IATA) director general, Alexandre De Juniac, said during an online news conference on Tuesday.
Airlines have copped backlash from consumer groups for breaking rules over providing refunds within set time limits.
IATA also noted one-third of global airline employees have either been furloughed or lost their jobs.
The news comes just days after budget airline Tiger revealed all pilots would lose their jobs because of the coronavirus crisis, while Qantas and Virgin Australia have halted international flights and slashed domestic capacity.
Virgin has cut down its capacity by 90 percent while temporarily laying off between 8,000 and 10,000 of its workers.
Some will be able to access accrued leave entitlements, however, leave without pay will be "inevitable" for some employees, the airline said.
The Qantas Group has taken a similar approach, announcing it will suspend international flights from the end of March through May and temporarily stand down two-thirds of its staff.
This means Qantas and Jetstar will ground more than 150 aircraft and slash 60 percent of its domestic capacity, which will impact up to 20,000 employees.
The nation's regional aviation industry is also struggling, prompting the federal government to invest almost $300 million to help the regional aviation sector get through the coronavirus pandemic.