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British Airways Fuel Surcharge


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BA have just been fined by the OFT for colluding on the fuel surcharge (and no dount overcharging).

 

Does this mean we should all being seeing if we booked with BA during 2004 and 2006 and claim back the fuel surcharge?

 

Any advice?

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Correct, BA have been fined for breaching competition laws. BA and VS were coluding so as not to undercut each other with the fuel surcharge, thus in breach of the law.

 

Heidi

I am not a legal expert, any advice I give is based purley on experience or opinion.

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The US Justice official clearly said on the news that "anyone who flew BA to North America paid to much".

 

I also understood that BA were merely the first after Virgin blew the whistle and that other airlines were also being investigated, following the information BA provided.

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BA will not be compensating Travel Management Companies.

 

An Abta spokeman has said a legal challenge for compensation will be unlikely. "Its not illegal to charge a fuel supplement, it is illegal to collude over it"

 

Trading standards officer for the Travel industry has said that "individual consumers could have a case only if they can prove they were misled".

 

There has been no big secret in the charging of fuel supplements, all airlines charge this, charter airlines charge as much as £45.00 per person for short haul flights, and some as much as double this for long haul.

 

As I said before, they were fined for coluding with Virgin, not for charging a fuel supplement.

I am not a legal expert, any advice I give is based purley on experience or opinion.

Please tip the scales if you feel I have helped you!! :D

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  • 4 months later...

This reply may be a little late, but I think that every passenger who paid a surcharge is entitled to their money back. There are several arguments in favour:

 

1) The surcharge element was a deception - it was calculated by illegal collusion and not based in fact.

2) The surcharge element is grounds for illegality of contract, meaning that part of the contract of sale could be repudiated because it runs contrary to statute.

 

I am asking for £240 back from BA and will take it to county court if BA hold out - I don't see how they can defend against a claim.

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Is that the full amount of surcharge or have you worked out how much extra their fuel actually cost them. I don't think you will be able to clamin back the full surcharge.

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Guest 10110001

I dont hold out much hope on that but I can see your position. From BA's perspective, they dont like the government burdening airlines any more than you do.

 

The OFT fine wasn't handed out for surcharging fuel, it was for price fixing with VS and contradicting the Competition Act 1988. VS - being more PR sensitive than BA - became the whistleblower to mitigate for a lower fine.

 

Fuel surcharging isnt illegal otherwise OPEC would be prosecuted for it.

 

I work for a middle eastern airline, they all deliberately take on maximum fuel loads to avoid paying British fuel tax during stopover (we call it tankering). I take a Boeing 77W on Dubai > Heathrow > Dubai/NYC without taking on fuel at Heathrow.

 

If you can prove BA tankered the fuel into Britain on the aircraft and thus defrauded you by levying a fuel surcharge then you might have a case.

 

For example, if you want to fly to Hong Kong, you will find a cheaper economy fare if you route via Dubai, Doha or Abu Dhabi. The carrier has no British fuel tax to pay, and gives an unfair advantage over BA who cannot always route their aircraft through an OPEC nation.

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I agree that there is nothing illegal about a fuel surcharge in itself, so I have based my claim on the fact that the amount of the surcharge is brought into disrepute by BA's having plucked it from thin air. Because they 'cheated' in arriving at the surcharge figure (£30 per sector in this case) I will contend that any prior or subsequent calculations are tainted by this dishonesty and they have forfeited their right to any surcharge at all. This is to similar to the bank charge cases where £30 charges were fully refunded, although there probably was a small genuine cost element involved.

 

I will claim that the fuel surcharge is unfair in any case under the 1998 act, because it has not been fairly applied (i.e.: not based on actual costs).

 

BA will not want to reveal their complex fuel calculations in court, because the whole surcharge thing is a sham anyway. Oil is priced in US dollars and we paid for the flights in pounds. The dollar has been gradually devalued to the pound over a three year period, so the actual cost of fuel loaded in the UK has remained fairly stable (when converted back to GBP). Most of the news media are too poorly informed to see the reality of dollar oil prices in terms of sterling cost and just report the headline barrel values, encouraging BA to slap on a surcharge regardless of the economic reality.

 

I am not sure about the tankering issue being based on UK tax - there is no tax on aviation fuel at an international airport. I am guessing that fuel is cheaper in the Arab states because it doesn't bear the economic cost of shipping it to the UK.

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I work for a middle eastern airline, they all deliberately take on maximum fuel loads to avoid paying British fuel tax during stopover (we call it tankering). I take a Boeing 77W on Dubai > Heathrow > Dubai/NYC without taking on fuel at Heathrow.

 

If you can prove BA tankered the fuel into Britain on the aircraft and thus defrauded you by levying a fuel surcharge then you might have a case.

 

For example, if you want to fly to Hong Kong, you will find a cheaper economy fare if you route via Dubai, Doha or Abu Dhabi. The carrier has no British fuel tax to pay, and gives an unfair advantage over BA who cannot always route their aircraft through an OPEC nation.

 

There is no tax on aviation fuel in UK - this is a major bone of contention for the 'green' lobby. Fuel may be more expensive admittedly, but that is supply/demand rather than tax.

 

Also, the need for tankering into LHR increased after the Bunsfield depot fire. There as also a cost to tankering. The weight of the extra fuel has to be carried and this will either cost a higher fuel burn on the incoming flight or loss of revenue as pax/cargo has to be limited to meet MTOW requirements from the originating airport.

 

Anyway, some fuel is always tankered into LHR. If a passenger jet lands completely empty of fuel (including divert and reserve) then serious and criminal conduct has occurred. So some of the fuel will have been loaded at a lower price.

 

Also, for a fuel surcharge to be entirely accurate, it would have to vary from flight to flight and be dealt with after check-in. The actual increased cost would need to be divided between the checked-in pax. Also, it is fairly obvious that the sector length is a major factor in the actual amount of increased fuel cost.

 

Thus the BA surcharge is only an (and I would guess, low) estimate of the extra costs involved.

 

The fine was not for surcharging, nor for surcharging the wrong amount; it was for colluding on the surcharge with one or more other airlines.

 

Jeepster, I wish you luck. My guess is that, at best, BA will settle out of court because it is cheaper for them that way; and that you will subsequently never be accepted on a BA flight again.

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Guest 10110001
There is no tax on aviation fuel in UK

 

Theres no government tax on Jet-A1, but the price of it between countries varies, airlines will use the the formula of cost of tankering -v- purchase price at turnaround point, and a strong £ favours tankering.

 

Also, the need for tankering into LHR increased after the Bunsfield depot fire.

 

Thats only because fuel was unavailable at LHR and the public learned the concept of tankering from the media. Its also why Etihad, for example, operate A345/346 on relatively short routes through LHR and A332 on LHR turnarounds and rarely see them fueling. Overcapacity means there is not much freight on the route thus alleviating MTOW issues.

 

There as also a cost to tankering. The weight of the extra fuel has to be carried and this will either cost a higher fuel burn on the incoming flight or loss of revenue as pax/cargo has to be limited to meet MTOW requirements from the originating airport.

 

Correct, but if the equipment is a B772 you have a lot of fuel tank before you reach your MTOW.

 

Anyway, some fuel is always tankered into LHR. If a passenger jet lands completely empty of fuel (including divert and reserve) then serious and criminal conduct has occurred. So some of the fuel will have been loaded at a lower price.

 

The checklist minimum fuel requirement is diversion airport + 40 minutes. No penalty for taking on surplus and very common to exceed fuel checklist requirement - unless its a very short overland flight without a PNR.

 

Also, for a fuel surcharge to be entirely accurate, it would have to vary from flight to flight and be dealt with after check-in. The actual increased cost would need to be divided between the checked-in pax. Also, it is fairly obvious that the sector length is a major factor in the actual amount of increased fuel cost.

 

Thus the BA surcharge is only an (and I would guess, low) estimate of the extra costs involved.

 

The fine was not for surcharging, nor for surcharging the wrong amount; it was for colluding on the surcharge with one or more other airlines.

 

Jeepster, I wish you luck. My guess is that, at best, BA will settle out of court because it is cheaper for them that way; and that you will subsequently never be accepted on a BA flight again.

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