The elephant in the room is how customer deposits are used to fund day-to-day operations. It wasn’t just that the major carriers didn’t want to provide refunds, it is that they would have struggled to return the cash because much of it had already been spent. Some even admitted that a flood of payouts risked tipping them over the edge.
There’s no denying that the pandemic sent the airline industry into a tailspin but it’s not for consumers to prop up struggling businesses.
Imagine the uproar if a high street bank had refused customers access to their savings during the financial crisis. It might happen in failed socialist regimes or dictatorships but even then people would take to the streets. Besides, you can’t plead for special treatment if you’re not prepared to do the right thing by customers.
Because that’s exactly how banks always operate. Your money isn’t there in the vault for you to collect it. It’s in Mrs. Miggin’s, down the road, mortgage.
Which is why we have central bank support for fractional reserve banks, see?