When an airline drops its high fuel surcharges, what happens to passengers with advance bookings? Do they get a refund?
That’s not an academic question for reader Simon Gornick, who bought a ticket on Virgin Atlantic in October from Los Angeles to London for Christmas. The price included a hefty $400 fuel surcharge.
Only a few days after making his reservation, Virgin Atlantic cut its fees.
That’s great for future bookings, but what about folks like Gornick? He phoned Virgin a few weeks later to check the price on the same flight, and found that the surcharge was gone.
That means that many people are paying the surcharge on the same flight, while others are not.
Putting aside the clear price gouging by the airlines represented by the use of the surcharge, it strikes me as grossly unfair to be penalized for an airline’s poor oil future purchases.
If any business should be well-informed about oil prices, it should be the airline industry. And with the volatility in that market, they should have paid more attention to the spot price.
Gornick contacted Virgin’s customer relations department by email, but heard nothing back.
I phoned Virgin Atlantic and asked a representative the same question. Could I get a refund if I bought the ticket in October, when the fuel surcharge was in effect?
“Unfortunately not,” I was told.
Wrong answer.
Virgin, and the other airlines that are lowering or eliminating their fuel surcharges, ought to offer a refund – or at least credit – to passengers who paid the fee. Better yet, they should eliminate fuel surcharges altogether and include the price of fuel in the fare.
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Perhaps people who bought tickets 18 months ago, but traveled when fuel prices were high, should be contacted and charged extra for the fuel cost when they actually traveled? That would be equally fair.
Actually, the cruise lines did that. Or at least tried.
How can you call it gouging when you had several other options? You chose to buy the ticket because, for you, the value of the trip exceeded the ticket cost – including the fuel surcharge. Besides, the days of everyone having paid the same price for an airline ticket are long gone.
I don’t think everyone should necessarily have to pay the same price for an airline ticket. However, Simon hasn’t taken his trip yet, and neither have any of the other passengers who booked that flight before the charges were dropped. Good for VA for dropping the charges, but simply as a gesture of thanks and goodwill, the airline should refund the charges for those who booked before the charges were dropped. Airlines of all stripes need all the positive PR they can get right now, and this would be a HUGE PR coup for VA. It would demonstrate the airline actually cares about its customers, and what airline couldn’t use some of that press? They couldn’t pay enough for the kind of good advertising such a move would generate.
And the airlines aren’t the only ones playing this silly game. Cruise lines are doing the same thing. I arranged a group cruise over the holidays
http://www.randallshirley.com/blog/?p=81
and those of us who booked earlier in the year avoided the surcharge, but some got hit by it. Now Celebrity has dropped the surcharge, but according to their policy, isn’t offering any refunds to those who got dinged.
Here’s Celebrity’s policy: http://tinyurl.com/57pf9a
Very unfair stuff. However, we do all need to keep in mind that both the airlines and other travel providers had to buy some damn expensive fuel over the past few months, and somebody has to pay for it.
This is where the airlines & cruiselines shot themselves in the foot. By tacking on these “surcharges” instead of just raising the base fairs to compensate for the costs of fuel they create a lot of ill will. If the price of the ticket had just dropped $400.00 Mr. Gornick probably would have just chalked it up to fluctuating ticket prices.
At least the cruiselines have put together a (complicated) system of awarding shipboard credits to passengers in order to offset the ill will of passengers. At the very least the airlines should offer something to people who are in Mr. Gornick’s position: a partial refund, discount on a future flight, etc.
and therein lies the problem with surcharges for a specific reason. When the specific reason goes away, so does the reason for the surcharge.
This causes all sorts of problems. As we see here. The fair thing to raise the price of the fare to cover the cost of providing the service. That being too simple, the travel industry creates even more ill will when it then refuses to refund money for something they never paid, like a high fuel surcharge when at the time of travel fuel costs are not high.
Its like the Budget RAC at Charleston, SC airport. When I looked at my bill I saw a ‘fuel surcharge.’ I asked what it was for – and was told with a straight face – for the shuttle.
The problem, you walk to your car this airport. when I pointed that out, the sales person got the manager who explained it was for the shuttle to brings cars and employees back and forth to the ‘yard.’ I objected again and it was removed. They’d charge rent for the space they park the car in at the airport if they could.
We have to criticize to some degree the way you go about these stories. Now, we are against fuel surcharges, and agree that there is no point to them, and the price should instead be rolled into the fare.
But as defined by the airlines, they are part of the fare. They show up in a ticket in the fare calculation, and contribute to the base fare. They don’t show up in the taxes and charges on the ticket. Just like the airlines do not provide a refund when the fare goes up, why should they when the fare goes down when you agreed to the higher price?
Many companies, both in and out of the travel industry, choose to honor lower prices, often within a time period, but most do not. If you bought a Blu-Ray player, then came back two months later on Black Friday and it was reduced $100, the local department store is unlikely to give you the difference.
The airline industry is the only industry in which this is an expectation. That is the price lowers, you’ll get your money back in the form of a voucher or possibly even a refund. Of course, the travel industry is the only one where the people around you can be paying 20 different prices for the same seat. Or where the privilege of exchanging a service even the day after purchase results in a fee possibly more than the price of the service itself.
What is fair anymore? Especially in this industry. We’d like to hear an answer that satisfies the airline’s need to survive financially with the passenger’s need for reasonable prices and service. None seems forthcoming from the industry.
@ Flight Wisdom Guru
>>The airline industry is the only industry in which this is an expectation. That is the price lowers, you’ll get your money back in the form of a voucher or possibly even a refund.<>But as defined by the airlines, they are part of the fare. <>What is fair anymore? Especially in this industry. We’d like to hear an answer that satisfies the airline’s need to survive financially with the passenger’s need for reasonable prices and service. None seems forthcoming from the industry.<<
What’s fair is the airline charging what is takes to operate their plane. Surcharges are a cop-out. They allow the industry to say “We’re soooooooooo sorry, here is the price we’d like to charge you…but the meany-faced oil peoples are making things soooooo expensive that we got to charge you extra. Hope you don’t mind! ”
By doing this the airlines give the illusion (a) that price increases are out of their control and (b) that these prices increases are temporary. Now in Mr. Gornick’s case (b) turned out to be a reality. The most fair thing to do is for Virgin to state that all passengers on flights after X date will not be required to pay fuel surcharges as we have determined they are no longer required. Passengers who purchased tickets for these flights who have paid fuel charges will be compensated in the form of…a discount on a future flight, partial refund, a free upgrade on a future flight…something besides “Sorry! SOL!”
If Virgin operates like the other airlines there should be an oppurtunity to use the system. Cancel the flight and rebok paying the $ 100-150 “change fee” you would at least be ahead $250
I am very interested in the outcome of this specific incident (is it a dead issue, or still being pursued?), and the topic in general. I completely agree that it would/could/SHOULD be viewed as an opportunity for a PR coup (public relations, not Philippine Air..to be clear, ha). Let’s see if any airline will be bold enought to do so….
As for using the system, well, they’ve covered their backsides there too. Here are typical fare rules from Virgin:
IF THE NEW ITINERARY RESULTS IN A LOWER FARE THE
CHANGE FEE WILL APPLY AND NO REFUND WILL BE MADE
IN THE EVENT OF SUBSEQUENT CANCELLATION THE ORIGIN
NON-REFUNDABLE AMOUNT WILL REMAIN NON-REFUNDABLE.
[...]If you bought a Blu-Ray player, then came back two months later on Black Friday and it was reduced $100, the local department store is unlikely to give you the difference.
The airline industry is the only industry in which this is an expectation.[...]
Actually, that’s not true. Let’s use your example. If I buy a Blu-Ray player and don’t use it. Then the exact same model goes on sale later, I can very well return the item and buy another at the reduced price.
Airline tickets aren’t fungible like other items. Whether they should be or not is another topic. If one could buy and sell tickets easily, this problem would not exist.
I have seen many situations similar to this – keep in mind that you purchase a ticket and then the next day the airline ADDS a $400 surcharge, they aren’t calling you asking you for the $400 either.
It’s kind of like buying gas, if you buy it one day and it goes down the next, you can’t go back to the gas station and ask for the difference back.