I recently covered how Etihad Guest has updated its award change and cancellation policy yet again. The program has the most punitive award ticket cancellation policy of any airline in the industry, and within 72 hours of departure, no changes or cancellations are possible to award tickets.

As it turns out, the policy is actually even worse than I fully realized, and reader Ryan shared his experience with me.

The confusing way Etihad Guest allows award cancellations

I won’t recap Etihad Guest’s entire award ticket cancellation policy, so see my previous post for those details. So let me explain what makes Etihad’s policy kind of ridiculous, in the form of an example.

Let’s say that you book an Etihad Guest first class award ticket in the “Comfort” fare bundle from Toronto (YYZ) to Abu Dhabi (AUH), which costs 200,000 miles one-way, and comes with around $600 in taxes and carrier imposed surcharges. If you needed to cancel at least 72 hours before departure, you’d have to pay a 25% fee to redeposit your miles.

Okay, so how much would you expect that you’d get back? Most people would generally assume that you’d forfeit 50,000 miles (so you’d get 150,000 miles back), and then you’d be refunded the $600 in taxes and fees. Oh, if only that were how it worked!

Etihad Guest instead uses a really convoluted system. For one, the percentage redeposit fee also applies to any carrier imposed fees paid for in cash. Furthermore, Etihad Guest refunds you as much as possible in miles rather than cash, and values each mile at two cents each (also the cost at which Etihad Guest sells miles, before any discounts).

There are two ways you can do the math on this:

• Etihad Guest essentially “values” the ticket at $4,600 ($4,000 worth of miles plus $600 in taxes and fees), so you’re owed a refund equivalent to $3,450; at a rate of two cents per mile, that means you’d receive a refund of 172,500 miles, and then the airline keeps your $600 in cash
• Put another way, you’re also paying the 25% fee on the taxes and fees you pay; so you’d get 150,000 of the 200,000 miles redeemed back, and then you’d get back $450 worth of the $600 in taxes and fees, but that’s converted into miles at the rate of two cents per mile, so you’d get back 22,500 miles in lieu of cash

This makes a very bad policy even worse

It’s no secret that I’m very critical of Etihad Guest’s cancellation policy. In theory I understand how Etihad Guest wants to align policies on revenue and award tickets, but this is simply uncompetitive, in an industry where most airlines charge virtually nothing for canceling award tickets.

I find it frustrating to begin with that tickets can’t be changed at all within 72 hours of departure, and that even if you’re canceling an award 10 months out, you’ll often be on the hook for 25% of the ticket cost.

But what I find even wilder is that even the cash portion of the ticket is subject to that 25% fee, and that cash refunds are arbitrarily converted into mileage refunds, at an unfavorable rate no less.

Ultimately Etihad Guest has the right to set its own policy, and everyone can decide for themselves what to do with that information (though I think Etihad Guest could be a bit more transparent about its policy). Personally, this makes me avoid the program, and I find this to be highly uncompetitive. As a point of comparison, Emirates Skywards lets you redeposit Flex Plus awards at no cost (and all first class awards book into that fare bundle).

Bottom line

Etihad Guest has the industry’s most restrictive cancellation policy for award tickets. Not only are no changes or cancellations allowed within 72 hours of departure, but further out than that, you often have to forfeit a significant percentage (typically 25%) of the ticket cost.

What’s worst is that the 25% fee doesn’t just apply to the miles, but also to the cash paid. And then Etihad has a confusing system by which it converts cash into miles, so that you typically don’t get any of your carrier imposed fees back, but instead, get those back in miles, at an unfavorable rate.

So if you are booking an award through Etihad Guest, make sure you know what you’re getting yourself into…

What do you make of the Etihad Guest award ticket cancellation policy?