The Association of Atol Companies (AAC) has hit out at airlines refusing to refund customers for flights cancelled due to coronavirus restrictions.

The AAC declined to identify carriers refusing cash refunds but said in a statement: “A number of airlines have cancelled flights but refuse to offer refunds to customers or their agents.”

Alan Bowen (pictured), legal advisor to the AAC, said: “We appreciate every travel business is finding life hard with the Foreign Office advice against all but essential travel.

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“Some airlines, such as Virgin Atlantic and the Middle East carriers, have been very accommodating and, where the customer has sought a refund, have not hesitated to arrange it.

“However, others expect customers to accept vouchers which can be used to purchase alternative flights at some point in the future.”

Bowen pointed out this requires “the customer pays the then current price, which may be much higher than the original flight booked”.

He said: “Where members have added additional services to create a ‘package’, the law is clear and Atol holders have to offer a refund if customers do not wish to book an alternative holiday.”

Guy Novik, USAIrtours chief executive and a member of the AAC executive council, said: “We need airlines to work with us not against us.

“In a time of crisis for the whole industry, we all need to work together.”

Novik warned: “When this crisis is over, we will remember those who supported us.”

Payment of cash refunds to consumers for cancelled travel arrangements is causing huge concern across the travel industry as businesses struggle to conserve cash and stave off insolvency.

The CAA is in talks with Abta on the travel association’s plea to allow “refund credits” in place of cash payments.