Credits and IOUs for trips are poised to lapse in the near future, creating an upcoming conundrum for travelers, The Wall Street Journal reported. A number of air carriers provided individuals with a COVID-19 extension on IOU expirations until the end of 2021. However, many travelers don’t think they will travel this year, especially not to destinations in Asia or Europe.
Filings with the U.S. Securities and Exchange Commission (SEC) indicate that the four largest United States air carriers — Southwest, Delta, United and American — had $10 billion in unused travel credits as of the close of last year.
Beyond airlines, the WSJ reported that one individual paid $1,300 for accommodations in France for a trip that was called off because of COVID-19. While the hotel provided the individual with a year and a half to spend the credit, American tourists still can’t travel to that country, and the individual doesn’t believe he will be crossing the pond in 2021. The hotel reportedly says it intends to reimburse the individual once the voucher lapses, which is permissible under French law, but the traveler is uncertain of whether that will happen.
Business travel management company TripActions reports that nearly 30 percent of the unused travel credits in its system lapsed in Q1 or will lapse by the end of March.
Airline earnings had decreased in the fourth quarter, just as they did in all other quarters last year, as COVID-19 served to essentially ground the sector globally. However, the heads of airlines have been optimistic about the market’s return, particularly in the advent of vaccines that will let people travel safely once more.
“We have been encouraged as more customers travel, and we are seeing a path of progressive improvement in our revenues, financial results and daily cash burn,” said Delta Airlines CEO Ed Bastian in a press statement, as previously reported.
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