We received a number of messages from readers about their attempts to get refunds for canceled flights. Several of them are happy because they received cash refunds from Delta Air Lines within a month. Given the numerous gloomy stories of travelers about other carriers, this is a very favorable experience.
Small wonder that Delta is working to improve its liquidity position. On April 22, 2020, the airline announces it will enter into 2 different loans, each to an amount of $1.5 billion (€1.4 billion). It will be interesting to see whether Delta will be able to raise the full amount. If so, the carrier will be able to pay more refunds in cash to customers whose flights have been canceled.
Part of the gloomy messages we received are from readers who applied for a refund at Lufthansa. None of them reports to have received any cash refund. Those who called the airline were invariably told the refunds will be paid, but due to a high volume of requests it will take time.
However, readers who called Lufthansa several times report that with every call the payout date moved further into the future. An example is the reader who is a senator (gold card holder) in Lufthansa’s frequent flyer program Miles & More.
His story reads like a serial. He calls Lufthansa’s service center several times. The first time, on March 11, the agent tells him the refund will take 1 week. After a week he calls again and now the agent says it will take 10 days. After 10 days the agent tells him it will take 14 days. And after 14 days the agent says it will be paid late April.
Among the frequently asked questions on Lufthansa’s website are several questions about refunds. The answers state that customers can apply for refunds online. That is correct, but whether they will actually be paid out, remains to be seen. None of the readers who dropped us a note reports to have actually received a cash refund.
The Lufthansa Group’s 1st quarter 2020 report shows that revenues declined by almost €1.4 billion (€1.3 billion) - or 47%. As a result, the adjusted EBIT (earnings before interest and taxes) amounts to around -€1.2 billion (-$1.3). And the group expects larger losses in the second quarter. Unlike Delta, Lufthansa has not published whether it is working on restoring its liquidity position.
Perhaps it hopes the German government will provide a bailout, like other European governments who keep their carriers afloat with taxpayer-funded money. The French government has announced for €7 billion support to Air France. And the Dutch government will support KLM Royal Dutch Airlines for an amount between €2 and €4 billion.
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Tags: Delta, Lufthansa, KLM, Air France, cash refunds, liquidity