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In late February, Etihad made some changes to its Guest loyalty program. Buried amongst flashy garnishes like a new elite status tier and a custom frequent flyer number is an amended GuestSeat refund policy.
And “amended” is putting it lightly. Etihad gutted its old policy. Now, when you cancel an Etihad award, you'll be subject to one of the most punitive and confusing cancellation policies in all of award travel. Yes, it's that bad. Between our full-time team of number-crunchers, we struggled to understand this policy. Here, we'll break it down for you.
Etihad Has a Confusing and Punitive New Refund Policy
We like it when airlines keep it simple. Etihad's now-old award cancellation policy did that. Before the recent changes, you'd forfeit just 10% of the miles redeemed to cancel your award ticket.
While the old system came with a cost, it was straightforward. The new system is anything but. We'll explain.
If you book an award ticket using Etihad Guest miles today, you're eligible for a refund up to 24 hours before your scheduled departure. However, the sum of miles and the percentage of the taxes and fees you get back depends on how early you cancel.
The closer to departure you try to cancel, the less you'll get back as a refund, as made clear in the fee structure below:
- 21+ days before departure: Forfeit 25% of the fare.
- 8–21 days before departure: Forfeit 50% of the fare.
- Within 7 days of departure: Forfeit 75% of the fare.
Unfortunately, that's the beginning and the end of all clarity with the airline's new policy. When Etihad rolled out its program changes, the line about forfeiting a percentage of the fare raised some red flags. The airline didn't define it. But what exactly does “fare” mean?
We reached out to Etihad and now have an answer.
Etihad's definition of “fare”
Defining “fare” requires a heavy amount of math. It's the sum of the miles plus the cash you pay in taxes and fees. And all of this is contingent on the 1.8¢ “purchase rate” Etihad applies to its Guest miles, which may vary depending on currency fluctuations.
To make matters simpler, let's look at an example.
Suppose we book an award ticket that costs 50,000 Guest miles plus $400 in taxes and fees, and then we cancel 8–21 days before departure. Etihad will refund just 50% of the fare per the fee structure. And no, that doesn't mean you'll get half the miles and half the taxes and fees back.
Instead, Etihad will multiply the 50,000 miles paid by its 1.8¢ per mile purchase rate. The monetary value of your miles is $900. Etihad will then add that to the $400 you paid in taxes and assign a total value of $1,300 to your booking. That's the “fare.”
The airline will refund half the $1,300 on this mock booking — $650. The refund comes out of the cash component first, then the miles. You'll forfeit the entirety of the $400 you paid in taxes and $250 worth of Guest miles — 13,888, to be exact. It uses that 1.8¢ number we referenced.
Your total refund on this canceled booking will be just 36,112 Etihad Guest Miles. Clear as mud, right?
Related: Do Etihad Guest Miles Expire?
Final Thoughts
To put it bluntly, Etihad's revised cancelation policy is among the worst award ticket change and cancellation policies we track. It's unnecessarily confusing, and the math borders on illogical. Why refund a proportional amount of miles and cash when you could have customers break out their calculators and a calculus textbook instead? It took our team numerous emails to Etihad and brainstorming sessions internally over a period of five weeks to understand this policy; that's a bad sign.
The policy is also objectively punitive. If you book an award with Etihad Guest miles and your plans change, you will pay a hefty price — even for cancellations made well before departure. For some award travelers, this policy is enough of a reason to avoid the Etihad Guest program in its entirety.
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