Mastering Compensation and Refunds: An In-Depth Guide

Definitions

A refund is a return of money paid for a service that was not used or cancelled. In the aviation world, a refund refers to a reimbursement of money paid by a passenger for their booking. This can include full or partial refund of a ticket price and its components, as well as additional services associated with the booking. A passenger can be refunded a meal price, airport taxes, full ticket price, etc. It all depends on fare rules and particular circumstances. 

Compensation is additional money provided to someone as redress for an undesirable situation. In aviation, compensation refers to an amount aimed to compensate for inconvenience caused primarily by disruptions. This can include additional money paid for flight irregularities, misplaced luggage, overbooking, or even additional uncategorized compensations. 

Conditions And Eligibility

When it comes to refunds, in order to receive one, a passenger needs to be entitled for it either by fare rules or specific circumstances. If a ticket fare is fully refundable, a passenger is entitled for a full refund regardless of any flight disruptions, provided that the ticket has not been used. Refunds can be full or partial, automatic or claimable. Every airline will have its own rules and conditions regarding refunds. When it comes to flight disruptions, however, rules are usually quite straightforward: if a flight is cancelled, significantly delayed or overbooked – passengers are eligible for a refund. Depending on the airline, the options may be available through self-service (managing booking online) or via customer support, in many cases refunds may be automatically processed. The important thing to remember here is that it does not matter why the flight got disrupted or its destination, if a passenger did not get a service – they are entitled for a refund. This usually is enforced by various consumer protection laws, and refund amounts usually correspond to monetary value of the unused service.

When speaking about compensations, however, multiple factors determine eligibility. A passenger must always request compensation, it is never offered by default. Factors affecting whether a passenger is entitled for compensation or not include departure and arrival points, flight distance, originally scheduled arrival times, reasons for delays and even legal proceedings. To receive compensation, a passenger must meet all requirements, as there cannot be partial compensation. The process of granting compensations is enforced by local regulations, and amounts are always set accordingly. Unlike with refunds, airline only undertakes to pay compensation when a disruption is their direct responsibility.

Common Misconceptions And Examples

The biggest misconception is failing to see the difference between a refund and compensation. People often confuse these terms and use one instead of the other. It can cause misunderstanding and frustration between involved parties (a passenger and an airline). To remember the two terms, keep in mind that refund aims to return the money already paid, and compensation aims to compensate for inconvenience.

For example, a passenger already received money back for their unused ticket on a cancelled flight, but also submitted a compensation request. When following up with the airline to inquire about their refund (while having compensation in mind) they will receive a response stating that the ticket has already been refunded (not everyone is a mind reader). By the time an understanding is reached, there can be some frustration on both ends.

Another big misconception is the belief that if a passenger received a refund, they are not eligible for compensation; or if they get a compensation, they cannot get a refund. This is incorrect and these two outcomes do not contradict each other. They are regulated by different rules, applicable based on different situations. 

For example, if a flight was cancelled because of technical difficulties, and a passenger decided not to travel with alternatives offered by the airline, they will get a refund, as the service was unused; this passenger also can apply for a compensation, and, depending on local regulations, potentially get additional sum for inconvenience. Another example, if a flight was significantly delayed, but the passenger used it, no refund will be issued in this case; they can, however, still apply for a compensation due to inconvenience. Last example, if a flight is cancelled because of severe weather, passengers will get refunds but no compensations. All three examples illustrate that each type (refund or compensation) is considered independently from each other.

Claim Process And Assistance Services

As previously mentioned, many airlines have automatic refunds for unused tickets where a major disruption (big delay or cancellation) took place. However, if there is a need to apply for a refund manually, documents that might be needed include tickets, receipts and bank details. This also applies when asking for compensation. In both cases a passenger will need to communicate with customer service of the respective airline.

The major difference in this process is about clarity. While refunds are straightforward and must be provided by airlines under certain conditions, compensations are more complex. Sometimes it may be impossible to receive a compensation without some professional assistance, as airlines can be vague on disruption details (which determines if a passenger is eligible for a compensation or not).

If you find yourself in need of help or at least need an answer about your eligibility for compensation – contact us!  Skycop can help you get compensated if your flight was disrupted. 

Safe travels!

More information about refunds and compensations when the flight is cancelled can be found HERE.