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British Airways responds to my question on 2-4-1 downgrade compensation

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I ran another article last week about BA’s treatment of downgraded passengers who are travelling on an American Express 2-4-1 voucher and claim compensation under EU261.

When downgraded whilst travelling on an Avios ticket, under EU261 BA is obliged to refund you 75% of the Avios used for that leg of your flight.  This is not in dispute and British Airways has always been happy to pay this.

What is currently in dispute is what happens when someone travelling on a 2-4-1 companion voucher is downgraded.  In the original case we discussed, a reader was offered zero compensation because he was told his companion ticket had zero value.  His partner, the BA Amex cardholder, received the full compensation due.  When he launched a case for compensation, BA settled based on the cash cost of buying 75% of the Avios value of the ticket.

British Airways BA A380 flying

Over the next couple of weeks we will get a real-time example of how this works because my contributor will be filing a claim after being downgraded.  His wife, who was the 2-4-1 cardholder and so would qualify for compensation, was not downgraded.

British Airways has now issued a statement to me explaining how they believe EU261 should be applied to 2-4-1 tickets:

To quote “the value of the purchase [is] split across the two tickets”.  This is, of course, the same as saying that the companion ticket has zero value.

If one person is downgraded – irrespective of whether that person is the original ticket holder or the companion – “the person on the voucher would be entitled to 75% of the value of the ticket – which would be calculated on 50 per cent of the amount of Avios paid for the pair“.

I very much doubt whether this would stand up in arbitration:

BA uses the word “value” rather than the “cost” of the purchase.  I doubt it means this, because the value could be either monetary or expressed in Avios.  It is difficult to see how it could argue the value of the companion seat is nil.  The voucher actually has a value of 100,000 Avios – or whatever the relevant value for the ticket it was used for – and if the voucher is not returned for reuse then the holder should be compensated for its loss.

You can argue that BA has accepted the voucher as ‘consideration’ in contractual terms for the second seat.  This means that it has value.

It is clear from the T&C’s that the Amex 2-4-1 voucher does NOT get you two tickets at half price. You get one ticket at full Avios and the other ticket at zero Avios.  There is an argument to say the voucher effectively entitles you to two half-price seats rather than one free seat, but a parallel argument that the voucher has a value of the seat it entitles you to.

What BA states above is not what they offered in the case of the HFP reader who was downgraded and filed a compensation claim.  He was offered nothing until he filed his case, based on the grounds that the companion ticket cost zero Avios.

Anyway ….. we now know where BA stands on the matter.  I very much doubt that my contributor will accept an offer based on the guidelines above, and if it goes to arbitration then we will all be in a ringside seat to see how it pans out.  This should then be the end of the matter as the result will be in the public domain.


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Comments (239)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Alex W says:

    Very best of luck to Anon. I hope you take them to the cleaners.

  • Ben says:

    Surely 75% refund of Avios + the voucher returned for another use.

    • Mark says:

      Some might be willing to accept that as a compromise. However to be useful compensation it obligates you to fly somewhere (equivalent) with BA within the 1 or 2 year validity window of the voucher and earn enough further avios to do so. You may also already have another voucher to use or be some way towards earning one…

      Personally I wouldn’t go down that route unless it was offered as a compromise, and only then consider whether it was an acceptable under the circumstances.

      • Sundar says:

        Not only that, they also make sure that you need to spend more avios to use the returned voucher and thereby reduce their net outstanding from their balance sheet. I would think this would be a more sensible approach for BA(albeit still not fully in customer favour) !

  • Nigel says:

    It seems bizarre that they could interpret it (in reverse) as the seat having no value, rather than the voucher having the avios value of the seat…

    • Nigel says:

      …I mean, if you bought a raffle ticket for £1 and won a Ferrari – that winning ticket has the value of a Ferrari. The Ferrari is not suddenly worth £1.

  • mike says:

    Interesting case, and I am sure BA are unhappy that this one will be played out in the public domain. Hopefully Anon will not accept any “gag order” to not talk about any settlement.

    Amex may have something to say here – the BAPP card has significantly less value if your 241 is actually some sort of “standby voucher for the class booked”.

    Alex Cruz, turning BA into Ryanair one bad decision at a time.

  • Ian E says:

    One thing BA seem to be missing here is that many Avios collectors, me included, work hard to accumulate sufficient points and where possible 2-4-1 vouchers to take a flight in a class which ordinarily would be financially impossible. So next year, I’m on a first class ticket to NY with my partner, hard earned and planned way in advance for a special occasion and therefore it would be the height customer disregard if I was downgraded and not compensated because of deliberate over-booking and considered to have no value. I can assure BA that to me that ticket is extremely valuable and be prepared for one hell of an upset customer should I be bumped !!!

    • Jan says:

      Ian E – my point exactly – well said.

    • Daz says:

      Ian, I agree totally, but the way BA are cutting services, benefits et al. I would make a scientific, wild-arsed guess that they will not be worrying about your hard earned route to a first class ticket.

      They’re starting to make Ryan Air look pretty respectable.

    • Kathy says:

      BA seem not to realise that those of us who do save up Avios for a big redemption from credit cards/Tesco etc are actually revenue generators for them. They make money from us via the sale of Avios. For frequent business flyers the Avios are a cost to BA – but with earning rates being slashed there’s surely less people accumulating them that way.

      I really think BA needs to get their head around this distinction and start valuing Avios customers more.

  • Adam says:

    There is also the question of the YQ fuel surcharge as this is lower and therefore the difference should be refunded also. Taking it one step further, should the fuel surcharge be classed as part of the fare as technically it is!

    • NFH says:

      Yes, of course the fuel surcharge (which was disingenuously renamed to “carrier imposed charge” when the price of fuel fell) qualifies for a 75% refund. I don’t think there’s much dispute or debate about that. Perhaps someone can also confirm whether taxes are included, given that EU 261/2004 refers only to the “price of the ticket”, which would also include taxes.

  • M101 says:

    BA really have become a vile airline.

  • George says:

    It will be very interesting to see this contested in court, I know BA will be very keen to try for an out of court settlement and a corresponding NDA.

    It would be very interesting to see the actual number of downgrades due to over sales as opposed to operational disruption (aircraft config change for instance) and what percentage of these are Avios redemptions – I suspect we’ll never be privy to these though.

    What is a concern is if FLY has been set up to adversely target Avios redemptions and 2-4-1s then over time it will devalue both schemes.

    I’d be interested to hear what American Express has to say about what is happening here as it’s their brand at risk as well?

    • CV3V says:

      Here is the Amex reply I was given (i think via BA, and not actually of any use!)

      I understand your concern and have personally discussed this situation with British Airways, who have assured us that they never intend to move customers to a cabin they had not booked in, as they understand how frustrating it is for their customers. However; if due to an unavoidable situation they have to process such a movement then regardless of the method of payment used (to make the booking), they always pay their customers the appropriate compensation for the cabin they were booked into. For example, if the booking was made using Avios, they refund the difference in Avios between the cabin booking was made for and the cabin they are travelling in.

      They have further assured us that they remain committed to rewarding their customers’ loyalty, and guarantee nine million redemption seats per year across their network, with a minimum of two Club World or Club Europe seats and four World Traveller or Euro Traveller seats available on every British Airways-operated flight.

      • nick says:

        The bit about paying the difference in Avios between the two cabins misses the point and is, I think, a contravention of EC261 in many cases. Giving me the cabin difference is not compensation. I didn’t want to fly in the lower cabin and would not have booked it with avios.

        Under that policy, what is stopping BA releasing 100 redemption seats on each CW flight and just downgrading most to WTP or WT, refunding them the difference between WT and CW? Nobody in their right mind would use avios on a WT ticket to SYD, but that is effectively what BA are saying they would make you do when you think you are going to be in CW.

        It’s not good enough. Either Amex don’t understand what BA are saying, or BA are scumbags.

      • Scallder says:

        “For example, if the booking was made using Avios, they refund the difference in Avios between the cabin booking was made for and the cabin they are travelling in.”

        For an Avios redemption (not factoring in the 2 for 1) that’s highly unlikely (ever?) to be 75% of the Avios used so that has to be incorrect surely?

      • Joan says:

        Aha well that confirms my point – that if they guarantee a minimum of two avios seats in each class , then if they downgrade you , there won’t be those two avios seats in that class .

        • nick says:

          If they have released 9 seats and downgrade 2, they are still fine. If they downgrade the only 2, then they are in trouble.

    • Cate says:

      I’d be interested to hear what American Express has to say about what is happening here as it’s their brand at risk as well?@George

      Possibly but let’s not forget other one world alliance partners whose reputations are potentially at risk by association. They may provide better leverage than AMEX at the right spot.

    • JAXBA says:

      Not just Amex, but Chase in the USA too.

      • Canuck says:

        Plus RBC in Canada.

        • Genghis says:

          Does anyone know much about the economics of these cards?
          I.e. on the BAPP, I hand over my £195 to Amex, I spend £10k and get 15,000 avios and a companion voucher?
          What is such a scenario for Amex and BA in terms of revenue and costs?

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