Sponsor Message:
Travel Polls & Prefs Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
Why Aren't Taxes/Surcharges Refundable?  
User currently offlineRobertS975 From United States of America, joined Aug 2005, 938 posts, RR: 0
Posted (2 years 1 month 2 weeks 4 days 9 hours ago) and read 6726 times:
Support Airliners.net - become a First Class Member!

OK, most airlines have non-refundable fare buckets meaning that a canceled trip results in forfeit of some or all of your money paid. Some carriers allow you to apply some of the residual value to another ticket minus a change fee. But here is what is troubling me:

Why aren't airlines forced to refund the tax/fuel surcharge portion of a fare on a trip not taken?

There are many fares from the USA to Europe where the fare actually is less than the taxes (US and foreign) and the fuel surcharge. And how did the carriers sneak the fuel surcharge in as an extra when it should simply be part of the fare?

22 replies: All unread, jump to last
 
User currently onlinebrilondon From Canada, joined Aug 2005, 4138 posts, RR: 1
Reply 1, posted (2 years 1 month 2 weeks 4 days 9 hours ago) and read 6704 times:

Because the taxes and service charges are paid to the government. The government does not refund the taxes for anything.


Rush for ever; Yankees all the way!!
User currently offlinemoose135 From United States of America, joined Oct 2004, 2301 posts, RR: 10
Reply 2, posted (2 years 1 month 2 weeks 4 days 8 hours ago) and read 6624 times:

Quoting brilondon (Reply 1):
Because the taxes and service charges are paid to the government. The government does not refund the taxes for anything.

But if you don't actually take the flight, why would the airline pay taxes or fees on it?



KC-135 - Passing gas and taking names!
User currently offlineLondonCity From United Kingdom, joined Nov 2008, 1462 posts, RR: 0
Reply 3, posted (2 years 1 month 2 weeks 4 days 8 hours ago) and read 6584 times:

Quoting RobertS975 (Thread starter):
Why aren't airlines forced to refund the tax/fuel surcharge portion of a fare on a trip not taken?
Quoting brilondon (Reply 1):
Because the taxes and service charges are paid to the government. The government does not refund the taxes for anything.

It will depend on the country where the ticket is issued and the relevant tax points.

Here in the UK, the airlines will refund the taxes and charges for an unused ticket but will levy a service fee. The tax point of our APD is when the plane leaves the ground so therefore it cannot be considered tax until that time.

But some airlines here, especially BA, will not refund the fuel surcharge on non-flexible tickets. Yet the fuel surcharge for a long-haul flight is the costliest charge - check the price breakdown of a London-New York-London excursion fare and you'll see what I mean.


User currently offlinecmf From , joined Dec 1969, posts, RR:
Reply 4, posted (2 years 1 month 2 weeks 4 days 8 hours ago) and read 6533 times:

Quoting brilondon (Reply 1):
The government does not refund the taxes for anything

Where don't they do that? In my experience they always do.


User currently offlinelewis From Greece, joined Jul 1999, 3623 posts, RR: 5
Reply 5, posted (2 years 1 month 2 weeks 4 days 8 hours ago) and read 6533 times:

Quoting brilondon (Reply 1):
Because the taxes and service charges are paid to the government. The government does not refund the taxes for anything.

That is not entirely correct. I have worked in cases where the government refunds sales tax after bad debt write-offs. Can't see why the state cannot refund taxes on ticket refunds.


User currently offlinejoost From Netherlands, joined Apr 2005, 3164 posts, RR: 4
Reply 6, posted (2 years 1 month 2 weeks 4 days 7 hours ago) and read 6460 times:

Quoting RobertS975 (Thread starter):
Why aren't airlines forced to refund the tax/fuel surcharge portion of a fare on a trip not taken?

In the EU, airlines are forced to return the government-imposed fees when not taking a trip, but they are allowed to charge a handling fee. Also non-EU airlines selling tickets in the EU need to comply with these rules.

I recently cancelled a SQ flight from AMS, and SQ processed the refund request within a few days without any problems.


User currently offlineluv2fly From United States of America, joined May 2003, 12090 posts, RR: 49
Reply 7, posted (2 years 1 month 2 weeks 4 days 7 hours ago) and read 6431 times:

Quoting brilondon (Reply 1):
Because the taxes and service charges are paid to the government. The government does not refund the taxes for anything.



Not true if you return a product to a store the tax is refunded. I believe this will not change until someone challenges the validity of it.



You can cut the irony with a knife
User currently offlineCruiser From Canada, joined Apr 2005, 1001 posts, RR: 7
Reply 8, posted (2 years 1 month 2 weeks 4 days 7 hours ago) and read 6397 times:

Sometimes (especially with landing fees) the fees/taxes are paid based on the number of seats on the aircraft. Thus, it doesn't matter whether you were on the plane or not, the airline is being charged the fees associated with that seat.


Leahy on Per Seat Costs: "Have you seen the B-2 fly-by at almost US$1bn a copy? It has only 2 seats!"
User currently offlinerobsaw From Canada, joined Dec 2008, 233 posts, RR: 0
Reply 9, posted (2 years 1 month 2 weeks 4 days 7 hours ago) and read 6383 times:

Quoting Cruiser (Reply 8):
Sometimes (especially with landing fees) the fees/taxes are paid based on the number of seats on the aircraft. Thus, it doesn't matter whether you were on the plane or not, the airline is being charged the fees associated with that seat.

True but irrelevant with respect to the retail transaction in question. If the seat was never sold they don't up the fees on everyone else to make up the difference.

The reasons will depend upon the particular jurisdiction, but in general, if a non-refundable fare is forfeited or partially-forfeited the gov't still considers it a sale and therefore all gov't levied taxes and fees are still payable.


User currently offlineRobertS975 From United States of America, joined Aug 2005, 938 posts, RR: 0
Reply 10, posted (2 years 1 month 2 weeks 4 days 5 hours ago) and read 6300 times:
Support Airliners.net - become a First Class Member!

The airlines most certainly do not pay the taxes to the various governmental agencies when the ticket is unused as they will almost always give a credit to the customer minus the service charge or change fee. And in the USA, there are some airlines, like Southwest, that give you full credit (not a refund, just credit)... no service charge. Obviously, they did not pay the taxes yet!

User currently offlineViscount724 From Switzerland, joined Oct 2006, 24917 posts, RR: 22
Reply 11, posted (2 years 1 month 2 weeks 4 days 3 hours ago) and read 6284 times:

Quoting Cruiser (Reply 8):
Sometimes (especially with landing fees) the fees/taxes are paid based on the number of seats on the aircraft. Thus, it doesn't matter whether you were on the plane or not, the airline is being charged the fees associated with that seat.

Those types of charges are built into the fare, not charged separately. Landing fees in most of the world are based on the aircraft's maximum takeoff weight (landing weight in the U.S.)


User currently offlineRobertS975 From United States of America, joined Aug 2005, 938 posts, RR: 0
Reply 12, posted (2 years 1 month 2 weeks 4 days ago) and read 6258 times:
Support Airliners.net - become a First Class Member!

Landing fees are not built into the price of an airline ticket. They are certainly based on the gross allowable weight of the plane. The landing fee is usually the same regardless of how many seats are filled on a plane.

User currently offlineRobertS975 From United States of America, joined Aug 2005, 938 posts, RR: 0
Reply 13, posted (2 years 1 month 2 weeks 4 days ago) and read 6256 times:
Support Airliners.net - become a First Class Member!

Also, keep in mind that many of the fees/surcharges/taxes are the same on a refundable fare (Y or F), and those fees or taxes can be refunded. All I am asking is why the security fees, airport fees, customs fees, and fuel surcharges cannot be refundable on a trip that is canceled?

I think the answer (at least in the USA) is that the carriers are deregulated and can therefore make their own rules. But I would submit that the Congress should ensure that the airlines do not get to keep fees collected as taxes and surcharges!
That's all I am asking.... if the fare is $300 and the fees, taxes and fuel surcharges are $500, then the $500 should come right back to the consumer! And the $300 should have whatever the residual happens to be on that carrier1


User currently offlineusflyer msp From United States of America, joined May 2000, 2110 posts, RR: 0
Reply 14, posted (2 years 1 month 2 weeks 3 days 18 hours ago) and read 6243 times:

Quoting RobertS975 (Reply 12):
Landing fees are not built into the price of an airline ticket.

Yes they are. Do you see airlines adding "landing fee surcharges" to tickets after they figure out which aircraft they are going to fly? Airlines have formulas that they use to estimate the cost per passenger. Landing fees are a cost of doing business just like labour, catering, and fuel.


User currently offlineburnsie28 From United States of America, joined exactly 10 years ago today! , 7533 posts, RR: 8
Reply 15, posted (2 years 1 month 2 weeks 3 days 3 hours ago) and read 6157 times:

Because when you forfeit that flight (on non-refundable fares) airlines still recognize that as revenue, which is taxable, thus the taxes are still paid on that fare.


"Some People Just Know How To Fly"- Best slogan ever, RIP NW 1926-2009
User currently offlineHT From Germany, joined May 2005, 6525 posts, RR: 24
Reply 16, posted (2 years 1 month 2 weeks 2 days 10 hours ago) and read 6095 times:

I recently had to cancel a longhaul non-refundable ticket with LH; all I got refunded were airport and governmental fees, but not the fare & the hefty fuel surcharges (as it had been outlines in the Terms when purchasing this ticket).
-HT



Carpe diem ! Life is too short to waste your time ! Keep in mind, that today is the first day of the rest of your life !
User currently offlineRobertS975 From United States of America, joined Aug 2005, 938 posts, RR: 0
Reply 17, posted (2 years 1 month 2 weeks 2 days ago) and read 6042 times:
Support Airliners.net - become a First Class Member!

Quoting burnsie28 (Reply 15):
Because when you forfeit that flight (on non-refundable fares) airlines still recognize that as revenue, which is taxable, thus the taxes are still paid on that fare.

That's a crock! Are you talking about corporate income tax? Security fees, customs and immigration fees etc. are not paid on a canceled ticket. If they returned the money, they wouldn't have to count it as revenue!

My point is simply that the carriers are not prohibited from keeping these taxes and fees and they should be!

[Edited 2012-06-16 19:51:09]

User currently offlineblueflyer From United States of America, joined Jan 2006, 3942 posts, RR: 2
Reply 18, posted (2 years 1 month 2 weeks 1 day 19 hours ago) and read 6025 times:
Support Airliners.net - become a First Class Member!

If the fare is non-refundable and the tax is a form of sales tax, then I think the carrier ought to keep the tax and transfer it to the government, as a sale did occur. Whether or not you enjoy the proceeds of the sale is irrelevant. If you break an expensive new toy while walking out of the store, the government is still collecting the sale tax. That you didn't get to enjoy your new toy is neither the store's nor the government's fault.

If the fees are usage-based, such as security fee, facility fee, etc, they should be refunded since no use occurred. Airlines should be able to charge a minimal fee to process the refund.

(and just to force airlines to be a bit more realistic with their fuel surcharge, I'd make that a usage-based fee too)

That's my opinion anyway.



I've got $h*t to do
User currently offlineRobertS975 From United States of America, joined Aug 2005, 938 posts, RR: 0
Reply 19, posted (2 years 1 month 2 weeks 1 day 13 hours ago) and read 5994 times:
Support Airliners.net - become a First Class Member!

The fares which are unrefundable are usually able to be converted towards a credit for later flights. A change fee or service charge is subtracted from the previous total which leaves the residual value. The service charge goes right into the airline's pocket, not subject to any fee or tax except national income tax, if applicable.

The original point that I was trying to make is that in many cases, such a high proportion of some non-refundable tickets is made up of various fees, taxes and surcharges. These various extra charges SHOULD be completely refundable even if the actual fare is not. I think this concept is hard to argue against! These various fees and surcharges and taxes only get paid out if the ticket is USED.


User currently offline777ER From New Zealand, joined Dec 2003, 12082 posts, RR: 18
Reply 20, posted (2 years 1 month 2 weeks 15 hours ago) and read 5918 times:
AIRLINERS.NET CREW
FORUM MODERATOR

Here in New Zealand, your taxes/surcharges are refundable.

User currently offlineViscount724 From Switzerland, joined Oct 2006, 24917 posts, RR: 22
Reply 21, posted (2 years 1 month 2 weeks 1 hour ago) and read 5868 times:

Quoting RobertS975 (Reply 19):
The original point that I was trying to make is that in many cases, such a high proportion of some non-refundable tickets is made up of various fees, taxes and surcharges. These various extra charges SHOULD be completely refundable even if the actual fare is not. I think this concept is hard to argue against! These various fees and surcharges and taxes only get paid out if the ticket is USED.

I agree for government taxes/fees but not for the fuel surcharge which is really part of the fare, but carriers often prefer to publish it as a separate amount since it's easier to change it quickly than to have to refile every single fare that's subject to the fuel surcharge.

In Europe the only taxes/fees that are normally refundanble when you purchase a non-refundable fare are the government and airport taxes/fees, i.e. amounts that the airline won't have to pay out if you don't travel.


User currently offlinereifel From Germany, joined Feb 2005, 1329 posts, RR: 1
Reply 22, posted (2 years 1 month 1 week 4 days 9 hours ago) and read 5724 times:

Maybe I can also add something, working as an IATA Agent.

First topic: taxes
Usually taxes are refundable, no matter if your ticket is refundable or not. This makes sense. in the old days you paid your taxes at the airport anyway. And if you don't fly you don't pay. If you don't fly the airline doesn't need to pay a departure tax to the airport, there is no security check or whatever tax to be paid.

This is like this almost everywhere in the world, except for whatever reason in the US, which have the incredible illegical rule that by law all US related taxes are non refundable in case your air fare is non refundable. This applies to all airlines, even non US airlines. It's completely illogic, but if your ticket involves a US related tax (can be a domestic US ticket or an international one), all taxes collected by the US are nonrefundable too, no matter if the passengers was actually security screened at the airport, you need to pay nevertheless. It's a dozen of nonrefundable tax codes, including US1, US2, ZP and XF tax.

In all other countries that I know you can refund taxes no matter if your fare is refundable or not, which is logic.


Second topic: Fuel supplement.
There was a time where fuel supplement didn't exist. Fuel supplement in my eyes is a clever invention of the airline industry. A very few airlines - i.e. Emirates - just raise their airfare in case fuel is more expensive, which makes sense. Fuel has always been a cost factor for an airline, but it always was included in the price.
The airlines are very clever concerning that and cherrypicking, too. They argue:
-since the fuel supplement is considered part of the airfare, it is non refundable in case the air fare is non refundable, too.
-in some countries, where advertising fares without taxes is allowed, they can advertise ridiculously low prices (not in europe i.e. as forbidden by law)
-However when it comes to giving something to the customer then it's not considered as part of the air fare: in Europe if you want to use miles to get a free flight, well then you need to pay the fuel supplement which in other situations is considered by the airlines "part of the airfare"........ is that logic?


Third topic: Fees
When purchasing a ticket, you usually pay a ticketing fee/service fee to the airline or the issuing travel agent. This is because airlines do not pay comission anymore to agents. the only way to earn money with selling a ticket for a travel agent is to charge a service fee (or sell ancillary things like hotels, insurances etc). The fee is paid for the "service" rendered by the agent (and even the airline haha) to sell you a ticket. Therefore at the moment the ticket is sold this fee is due to the airline/agent and therefore logically non refundable if you cancel your ticket (even if you have a fully refundable ticket by the way).


Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
BA Jubilee CW Sale $1952 Incl Taxes,fees, US-LHR! posted Thu May 17 2012 18:23:48 by 9V-SPJ
Taxes Have To Be Included... posted Mon Jan 23 2012 21:23:13 by WN787
Credit On Non-refundable Europe Tickets posted Wed Jan 11 2012 14:13:59 by RICBWI
Why Aren't Airline Tickets Transferable? posted Mon Mar 22 2010 04:20:30 by paneuropean
Taxes And Charges From LHR To Asia posted Fri Oct 30 2009 07:55:07 by Woof
Worlds Highest Airport Taxes posted Tue Aug 25 2009 01:24:52 by Avbooks
Why Are Flying Blue Taxes So High? posted Wed Aug 19 2009 18:54:58 by AF022
Taxes And Fees Non-rev CDG-US posted Fri Jun 12 2009 10:24:17 by Bobnwa
Refundable Ticket With A Non-refundable Credit? posted Fri Mar 27 2009 17:57:14 by AA757MIA
When To Buy Fully-refundable Versus Nonrefundable? posted Fri Mar 27 2009 12:05:00 by Chase