Finnair Weighs Expansion Of Credit Card Surcharge

Finnair is considering expanding the introduction of a surcharge on credit card payments for reservations made through travel agents in the first half of next year, it told EuroBTN on Dec. 9. Last month, the Finnish flag carrier introduced a surcharge of €7.50 in the Netherlands, following a similar initiative from KLM in August. Unlike KLM, which is only surcharging cheaper, more restricted ticket types in its home market, the Finnair surcharge applies to all reservations where payment is made through the merchant agreement of the airline.

SN Brussels also introduced a card surcharge in the Netherlands last month, but EuroBTN was unable to obtain details by press time.

Now Finnair is considering similar action in its home market and other European countries, especially Sweden, where both Air France and KLM introduced card surcharges on Dec. 1.

"In general, as long as there is a legal and technical possibility, we will consider it," said Petri Schaaf, vice president of global sales for Finnair. Legislation to undertake Finland's implementation of the European Union Payment Services Directive will be introduced on May 1, 2010, "which will make it possible, so that is what we are thinking about," he said. "We are also thinking about Sweden and other countries for the first half of next year."

Travel buyers have criticized card surcharges as the unbundling of a cost that is ultimately passed on to them. However, Schaaf does not believe it is a cost airlines should have to bear either. "Airlines are one of the few industries where the merchant does not pay the credit card fee," he said, referring to travel agents.

Diederik Banken, head of sales and account management for BCD Travel in the Netherlands, warned that more airlines are likely to follow KLM's lead there. "The general feeling in the marketplace is that because the home carrier has introduced a surcharge, others will as well, especially as we have not seen a big shift in marketshare from KLM because of this," he said. "However, I do see a lot of unhappy clients."