British Airways and Virgin Atlantic in the past few weeks agreed to a class action settlement for passengers in the United States and United Kingdom who paid fuel surcharges between Aug. 11, 2004, and March 23, 2006.
The settlement could mean a windfall for corporations that conducted business on those airlines from either side of the Atlantic, though claiming procedures for businesses, which could differ from individual passengers, still were being refined at press time.
Cohen, Milstein, Hausfeld & Toll, the law firm that led the suit, said passengers who flew during that time "overpaid for their airline tickets because the airlines illegally agreed to increase the amount of the fuel surcharge they added to the ticket price."
The firm estimated 8 million U.S. and U.K. customers are entitled to cash settlements. Through the settlement agreement, British Airways and Virgin are making available $59 million for U.S. passengers and £73.5 million for U.K. passengers who were subject to fuel surcharges during the timeframe. A partner for the law firm in a statement claimed, "This is the first time non-U.S. citizens have been rewarded on an equal footing to U.S. citizens in a case before the U.S. courts, making this a legal precedent and a significant milestone in both U.S. and U.K. legal history."
At press time, Charles Tompkins, a lawyer for Cohen, Milstein, Hausfeld & Toll, said the court would have to approve the mechanism for filing claims. The firm, however, set up a Web site (www.airpassengerrefund.com) through which passengers and businesses can sign up to be made aware of the next steps and the court-approved methods for filing. A spokesperson for the firm said 13,730 passengers and 162 businesses already had visited the site.
"The claims process for businesses is still being worked out," Tompkins said, noting that the firm would explore setting up a data transfer process for corporations to pass along information on segments flown. Tompkins said minimal data requirements likely would include passenger name, date of travel and origin and destination information or frequent flyer number.
"Whatever entity paid for the travel is entitled to the refund," Tompkins said. "Some businesses could be entitled to a significant amount, especially if they traveled a lot at the latter part of the claims period, when the surcharges were quite high. You're talking about £10 per segment per traveler. If you have one thousand travelers, you could be entitled to a couple hundred thousand pounds." The firm said refund amounts "depend on the amount of the surcharge paid," but will be up to "£10 [about US$20] for each flight segment."
British Airways last August was hit with fines on both sides of the Atlantic, as the U.K. Office of Fair Trading and U.S. Department of Justice fined the carrier more than $540 million after it admitted to "collusion over the price of long-haul passenger fuel surcharges" with rival Virgin Atlantic between August 2004 and January 2006. OFT and DOJ granted Virgin immunity from fines since the carrier was first to give "full details" in relation to the "cartel conduct." DOJ, however, said the carrier is "obligated to pay restitution to U.S. victims
(BTNonline, Aug. 13, 2007)."At least two dozen of the largest corporate travel spenders in the United States, including BP, ExxonMobil and PricewaterhouseCoopers, listed British Airways or Virgin Atlantic as among their preferred carriers, according to BTN's annual Corporate Travel 100 data on the largest business travel spenders in terms of annual U.S. booked air volume.
John Caldwell, president of consulting firm Caldwell Associates, said, "It's a lot easier said than done to get these monies back" for businesses. "It depends on how it was paid. If it was paid by central billing for the company, then they ought to get it back centrally. If it was paid by individual travelers who were reimbursed, then they'll likely have to get it back through their employees." Though the number of flight segments on British Airways and Virgin Atlantic over a two-year period could yield significant returns for many companies, Caldwell said, "It's going to be a question of whether the juice is worth the squeeze."