U.K. Travel Associations Urge Carriers To Refund Or Negotiate Fuel Surcharges

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U.K. Travel Associations Urge Carriers To Refund Or Negotiate Fuel Surcharges

SEPTEMBER 30, 2008 -- The United Kingdom's Institute of Travel Management and Guild of Travel Management Companies have joined forces to urge airlines either to include fuel surcharges in corporate deals or make them refundable on all tickets. The two organizations have published an open letter to buyers, TMCs and airlines, calling for a resolution after several cases of unidentified airlines refusing to refund fuel surcharges on nonrefundable tickets.

"It is existing practice that airlines refund any taxation charges on receipt of unused nonrefundable tickets," the letter read. "Both the GTMC and ITM have, however, become aware of a practice by some airlines to withhold the portion of the total cost referred to as 'Fuel Surcharge,' stating that it is not indeed a tax and therefore not refundable on nonrefundable tickets."

"Our two associations consider that if an airline practices this approach then the 'Fuel Surcharge' is in effect being treated as part of the ticket price, and airlines undertaking this practice have in effect said this is the case. If this is so, then this element of the fare should be included in any corporate agreements between buyers and airlines. If this is not the case, then this surcharge should be refunded if a ticket is not used, regardless of ticket restrictions."

The letter continued, "The airline community is entitled to treat the surcharge as they wish as far as refunding is concerned, but you cannot have your cake and eat it. It should either be treated as a tax or as part of the fare or applied accordingly to relationships to TMCs and travel buyers."

Sources told BTNthat one of the carriers not refunding fuel surcharges on nonrefundable tickets is Delta Air Lines. In a prepared response to BTN's enquiry, the carrier stated: "Delta Air Lines offers its customers refundable and nonrefundable fare options. Taxes and some charges applied to nonrefundable tickets can be refunded. However, carrier-imposed surcharges are part of the fare and as such are not refundable when a nonrefundable fare is purchased. Passengers wishing to have full flexibility in their travel plans have the option of purchasing a fully refundable ticket ... The terms of Delta's corporate discount agreements are confidential."

Airlines began surcharging for fuel in 2004, and GTMC deputy chairman Mike Hare told BTN that there is a danger that they will become a permanent separate charge within a ticket price. Instead, he said, it would be more fair to re-absorb fuel costs into the total fare.

"If a passenger does not use their nonrefundable ticket, there is an argument the airline should keep the fuel surcharge because the airline will have to fly without them, probably with an empty seat," he said. "Let's put it in the fare and make it part of the agreement. Airlines are not charging leasing surcharges or interest surcharges, and it is very unlikely they will queue up to reduce the fuel surcharge when oil prices fall $10."

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