"Airlines wrestle with when to refund the nonrefundable"

Tuesday, February 8, 2005

Airlines wrestle with when to refund the nonrefundable 
By Scott McCartney
The Wall Street Journal


After Tina Sims was diagnosed with breast cancer in December, she called
United Airlines to cancel her January trip to New Zealand and to ask for a
refund for her and her husband. Chemotherapy and radiation treatments would
pre-empt any travel for at least eight months.

United's response: She could get a full refund only if the illness was
"terminal," Ms. Sims says she was told, and unless they could rebook within
three months, the airline would keep 35 percent of the $5,200 cost of the
two tickets. "Because I couldn't guarantee I was 'terminal,' they said they
wouldn't give me a refund," says the 60-year-old retired interior designer.
"I wasn't willing to go that far."

Airlines have policies in place for just about everything, but there is one
set of rules that many are reluctant to put in writing: When they will
refund nonrefundable tickets. For medical emergencies, most carriers say
they will consider requests on a case-by-case basis. But often, this policy
isn't even noted in their fare rules or customer-service policies.

The ambiguity illustrates the financial bind airlines are in - particularly
today with so many carriers struggling to regain profitability - when
dealing with special passenger requests. It might seem that airlines would
be accommodating on refunds like these. After all, they routinely overbook
flights, which protects them financially from unexpected events like
last-minute cancellations. But what airlines prefer to do in cases of
medical emergencies is to keep the money paid and give customers one year to
rebook, typically a year from the date of purchase.

It is a tricky situation because it is, after all, ripe for abuse: Customers
could easily skirt rules simply by declaring illness. Want an extra couple
days on the beach without paying a higher fare to rebook? Just say you were
sick.

According to one longtime airline supervisor, who often has to deal with
irate customers, waiving the rules for illness can be problematic. Verifying
sudden illness over the phone is impossible; having people bring notes from
doctors to the airport is hardly more practical.

In obvious cases, airlines do waive rules, if customers push hard enough.
But to avoid abuse, they make it tough. That can lead to horrible
situations, such as telling cancer patients they are only entitled to
refunds if they die.

In Ms. Sims's case, UAL Corp.'s United says its call-center representatives
- Ms. Sims talked to several - misinformed her. The airline does give full
refunds for serious illnesses that prevent travel if customers produce a
note from a doctor. United called Ms. Sims to offer a refund after The Wall
Street Journal inquired about the case.

"I'm sorry she got that information (that refunds are only given for death),
because it's just wrong," United spokeswoman Robin Urbanski said.

However, its written fare rules don't make that clear. There is no written
policy spelling out what United will do for medical emergencies, and, in
fact, the seven pages of rules on a Washington-to-Queensland, New Zealand,
round-trip ticket, corroborate exactly what United's agents told Ms. Sims.
It adds up to a refund if you die, but only 65 percent if short of that.

In a case that arose in September, US Airways Group Inc. initially refused
to refund $2,756 of tickets to a Philadelphia family that had to cancel a
trip to Cancun, Mexico, after learning their 6-year-old son's cancer had
grown and additional chemotherapy would be needed. The family feared they
would need the money for their son's treatment, and sent documentation from
their son's oncologist.

US Airways was trying to work out a credit for the family, but a
representative left the family a phone message saying the airline's
bankruptcy prevented a refund, unless someone in the family were to die. The
family called a local television station, causing a furor.

US Airways says it refunded the family's ticket. In addition, US Airways
employees also set up a fund for the boy, Michael Urban, at Children's
Hospital of Philadelphia.

Today, Southwest Airlines uses a tape of the TV station's report about
Michael Urban in its customer-service training. "We tell all our agents to
do the right thing for the customer," says Lisa Anderson, Southwest's
director of customer advocacy.

Southwest gives all customers a year to use nonrefundable tickets, without a
change fee, if trips are canceled. The airline says if customers prefer a
refund because of medical problems, it will do that.

AMR Corp.'s American Airlines, Delta Air Lines, Northwest Airlines,
Continental Airlines and other carriers all said they work with customers
case by case. A Northwest spokesman was fairly forthright: "In the case of a
serious medical condition, a refund would also be allowed on most fares."

Certain airlines hold their cards close to the vest. A spokesperson at one
major airline said refunds aren't normally given on nonrefundable tickets,
then added on condition that the airline's name not be given, that the
airline does refund tickets for serious medical illness, but doesn't want
that publicized. A representative at another carrier said it does use
discretion, but "that's not something we talk about."

One option for travelers worried about medical cancellations and the likely
airline hassles that might result is travel insurance. In general, travel
insurers will cover trips cancelled due to pre-existing medical conditions
if the insurance is bought between seven and 21 days after making the first
payment for the trip, according to Peter Evans of Insuremytrip.com, a
comparison shopping site for travel insurance.

A basic policy that would protect against medical emergencies can cost
several hundred dollars for an international itinerary - pricey peace of
mind, and not necessary if the airline does the right thing. But for some
customers, that might be preferable to an unpleasant battle with airline
representatives at time of illness.


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