British Airways & Virgin Reclaiming? Can you get compensation for its fuel duty surcharge?

STOP PRESS 17 FEB 2008
This is now settled, find out how to get compensation in the Virgin BA Compensation update blog. 

Yesterday British Airways was fined £200 million plus for colluding with Virgin Atlantic over fuel surcharges (of between £5 and £60) on tickets between 2004 and 2006. Virgin only escaped as it dobbed itself and BA in, in the first place.

This is an enormous fine, and shows the severity with which the regulators both here and in the US treated the offence. My phone went hot yesterday with journalists asking, “are you going to do a reclaiming campaign like bank charges?” (e.g. read this Scotsman article).

Is it right to reclaim?

In many ways it’s an interesting debate whether you should reclaim. I always separate out reclaim culture from compensation culture; reclaiming being taking money back from big companies who unfairly took it from you. So first we need look at whether that happened here…

Technically the fine is about collusion to set prices, not about the price itself being actually overcharged. Thus it’s arguable (and indeed the BA Chief Exec was doing so yesterday) that customers haven’t overpaid; it was more a procedural crime.

However the counter-argument is that the two airlines both rode roughshod over the market in an anti-competitive act; which means if you are reclaiming I would go for Virgin just as much as for BA. The fact it owned up doesn’t mean it didn’t impact customer ticket prices.

In the US, where class actions are possible, a reclaim of that style is already gathering pace.

How to reclaim?

Assuming you decide it’s appropriate to get your money back if you paid the surcharge; then how do you go about it? As this isn’t such a huge amount of money I’m not going to write a big article on it. I’ll just illustrate that the approach should follow the other main reclaims (see the Reclaim section).

The basic argument to either airline is simple: “the regulator has penalised you for anti-competitive prices; I suffered due to your price fixing and I want my money back.” So, total up what you paid and it’s time to write some letters.

Brief step-by-step reclaiming fuel duty from BA / Virgin guide

1. Write a letter asking for your money back.
Write a letter detailing the flight(s) you took and the cost of the fuel duty. Then explain you believe that in the light of the US and OFT ruling you think this charge was unfair; then ask for your money back. Use the reclaiming template letters in the Bank Charges article if it helps.

2. Assuming it says no, write back with a more militant approach.

It will probably write back saying it doesn’t think that’s appropriate. At this point it’s time to consider getting a little more militant. Write back saying that you believe this is unfair and unacceptable as you were mistreated as a regular customer. Also indicate you are considering taking action in the small claims court.

If you’re writing to BA, it’s worth noting that you’re aware of a class action being launched in the US, and you hope it will be as fair to British Consumers as it may be forced to be to US ones.

Again the more militant Bank Charges templates should help.

3. Cross your fingers.

Beyond this point we’re in new territory. My hope is the airlines will at this point pay out; if they do it’s very likely it’ll just be a ‘goodwill gesture’ without any admittance of liability.

If not, then it’s up to you whether you take it further. There is always the small claims system of the courts. Yet it’s worth noting that while you can’t be charged costs, you need to pay a fee to do that (it’s quite cheap online) and you only get it back if you win.

The argument would be that the fuel duty fee was unlawful as it was set by collusion. This is probably worth doing only if you flew a number of times or the court fee may dwarf the reclaimed cash. If you are going to do it, then yet again, see the small claims section of the Bank Charges article.

4.Please feedback how you do

If you do follow this procedure, do feedback any success or failure via the link below:

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