Foreign airlines drop security surcharge after federal probe
TORONTO (CP) - Several foreign airlines have dropped a surcharge on fares for flights out of Canada after an investigation by the Canadian Transportation Agency found that the charge was unjustified.
The investigation began after a complaint made almost three years ago by Canadian travel agents, who now say passengers who flew on those airlines are entitled to a refund of the surcharge.
The complaint alleged that KLM and Northwest Airlines were improperly charging passengers a security surcharge, said Greg Danylchenko, manager of tariffs for the federal agency.
The agency found that other airlines were also levying the charge and decided that the complaint by the Canadian Standard Travel Agent Registry - an association representing more than 5,000 travel agents - was valid, Danylchenko said in an interview. The agency issued rulings covering the airlines on Feb. 8.
The other airlines found to have been levying the improper charge are United Air Lines, Delta Air Lines, Mexicana, American Airlines, Aeromexico, US Airways and Continental Airlines.
All have dropped the surcharge except Continental, which has been ordered to do so within 120 days, said Danylchenko. The surcharge, added to the cost of each ticket bought by travellers, is "in the range of $10 to $15," he said.
The complaint dates back to April 2002 when a new federal agency, the Canadian Air Transport Security Authority, was created to take over screening of passengers at airports across the country. The federal government instituted a tax on flight tickets to pay for that service. "When a person buys a ticket they pay this tax," said Danylchenko.
Before then airlines were responsible for paying for security screening and passed the cost along to passengers in the form of a security surcharge. The surcharge should have been dropped when the new tax came into effect, but the airlines covered in the Feb. 8 rulings continued charging it anyway.
"Canadians were paying for the same thing twice," said Danylchenko.
No Canadian airlines were found to have been imposing the surcharge, he said.
There is no estimate of what the excess surcharges add up to, but with thousands of passengers on an unknown number of flights taken over almost three years, the amount is significant.
"We're talking a lot of money," says Bruce Bishins, president of the Canadian Standard Travel Agent Registry. "I'm sure it's in the millions."
The travel agent group has asked for the money to be refunded.
"Those moneys should be returned to passengers," said Bishins. "The airlines have essentially walked away with those moneys in their pocket and unfairly so."
But the Canadian Transportation Agency has no authority to retroactively order airlines to refund surcharges which should never have been charged, said Danylchenko. He agreed some travellers might decide to approach airlines directly and ask for a refund on flights going back as far as 2002.
"Maybe - why not?" he said. "Will they get it or not, I don't know."
At least one of the airlines says no refunds will be made.
"No, the company will not be refunding," US Airways spokesman David Castelveter said Thursday from Arlington, Va.
He said the surcharge in the case of US Airways was $12 Cdn, and that the company does not known how much it collected with the charge since April 2002.
Asked why the charge remained in place for so long - in US Airways' case until last December - Castelveter said the airline was unaware that it should have been withdrawn earlier.
"Certainly we would not have done anything intentionally or wilfully that violated Canadian regulations. As soon as we were made aware of the concern, we withdrew the fee."
One senior official with one of the affected airlines said that determining who is entitled to refunds and then issuing refunds would present a virtually impossible administrative burden.
---------
I don't know how they're supposed to be processing this refund, or even if they'll actually do it.
TORONTO (CP) - Several foreign airlines have dropped a surcharge on fares for flights out of Canada after an investigation by the Canadian Transportation Agency found that the charge was unjustified.
The investigation began after a complaint made almost three years ago by Canadian travel agents, who now say passengers who flew on those airlines are entitled to a refund of the surcharge.
The complaint alleged that KLM and Northwest Airlines were improperly charging passengers a security surcharge, said Greg Danylchenko, manager of tariffs for the federal agency.
The agency found that other airlines were also levying the charge and decided that the complaint by the Canadian Standard Travel Agent Registry - an association representing more than 5,000 travel agents - was valid, Danylchenko said in an interview. The agency issued rulings covering the airlines on Feb. 8.
The other airlines found to have been levying the improper charge are United Air Lines, Delta Air Lines, Mexicana, American Airlines, Aeromexico, US Airways and Continental Airlines.
All have dropped the surcharge except Continental, which has been ordered to do so within 120 days, said Danylchenko. The surcharge, added to the cost of each ticket bought by travellers, is "in the range of $10 to $15," he said.
The complaint dates back to April 2002 when a new federal agency, the Canadian Air Transport Security Authority, was created to take over screening of passengers at airports across the country. The federal government instituted a tax on flight tickets to pay for that service. "When a person buys a ticket they pay this tax," said Danylchenko.
Before then airlines were responsible for paying for security screening and passed the cost along to passengers in the form of a security surcharge. The surcharge should have been dropped when the new tax came into effect, but the airlines covered in the Feb. 8 rulings continued charging it anyway.
"Canadians were paying for the same thing twice," said Danylchenko.
No Canadian airlines were found to have been imposing the surcharge, he said.
There is no estimate of what the excess surcharges add up to, but with thousands of passengers on an unknown number of flights taken over almost three years, the amount is significant.
"We're talking a lot of money," says Bruce Bishins, president of the Canadian Standard Travel Agent Registry. "I'm sure it's in the millions."
The travel agent group has asked for the money to be refunded.
"Those moneys should be returned to passengers," said Bishins. "The airlines have essentially walked away with those moneys in their pocket and unfairly so."
But the Canadian Transportation Agency has no authority to retroactively order airlines to refund surcharges which should never have been charged, said Danylchenko. He agreed some travellers might decide to approach airlines directly and ask for a refund on flights going back as far as 2002.
"Maybe - why not?" he said. "Will they get it or not, I don't know."
At least one of the airlines says no refunds will be made.
"No, the company will not be refunding," US Airways spokesman David Castelveter said Thursday from Arlington, Va.
He said the surcharge in the case of US Airways was $12 Cdn, and that the company does not known how much it collected with the charge since April 2002.
Asked why the charge remained in place for so long - in US Airways' case until last December - Castelveter said the airline was unaware that it should have been withdrawn earlier.
"Certainly we would not have done anything intentionally or wilfully that violated Canadian regulations. As soon as we were made aware of the concern, we withdrew the fee."
One senior official with one of the affected airlines said that determining who is entitled to refunds and then issuing refunds would present a virtually impossible administrative burden.
---------
I don't know how they're supposed to be processing this refund, or even if they'll actually do it.
