An interesting court case is currently working its way through the US legal system. Four frequent flyers in the States are suing British Airways over the fairness (or not) of the fuel surcharges imposed on Avios reward tickets and corporate net fares.
The latest attempt by British Airways to have the case thrown out has just failed, and it will proceed to the next stage.
In a decision made public on Friday, U.S. District Judge Raymond Dearie in Brooklyn, New York, said the plaintiffs offered sufficient support for their claims that the surcharges were not “reasonably related to or based upon” fuel costs. He did not rule on the merits of the case …..
The plaintiffs said British Airways saw the fuel surcharges as a means to boost revenue, and charge frequent flyers hundreds of dollars on each “free” reward ticket.
In letting the case proceed, Dearie cited a statistical analysis from the flyers that suggested that British Airways’ fuel surcharges from 2007 to 2012 “bore little relationship to – and were not based upon – changes in the price of fuel.”
There are a couple of points worth mentioning here. The first is that, for reasons unknown, British Airways charges higher fuel surcharges – substantially higher, in fact – for round-trip tickets which start in the US compared with the UK.
Heathrow to New York return in Club World has total taxes of £533. New York to Heathrow return has total taxes of £732. That won’t look good in court.
Secondly, I will leave you with this bit of data courtesy of my friend Andy.
Cost of fuelling a BA A380 to Los Angeles, return: $170,000 (figure comes directly from a BA pilot)
First Class fuel charge revenue: 14 x £359 = £5,026
Club World fuel charge revenue: 97 x £359 = £34,823
World Traveller Plus fuel charge revenue: 55 x £239 = £13,145
World Traveller fuel charge revenue: 303 x £239 = £72,417
Total fuel surcharge collected on a full A380 flight to Los Angeles: £125,411 = c $200,000
‘Profit’ generated by fuel surcharge vs the cost of fuel: c $30,000
The full court filings in the case can be downloaded from Loyalty Lobby here.
It is not clear where this case will end up – the worst case scenario, for BA, is that it is made to refund fuel surcharges to anyone who has flown to or from the US in recent years on an Avios ticket or corporate net fare (to which fuel surcharges are additional).
This would not be unparalleled – similar refunds were made a few years (I got one myself) when BA settled another court case.