European airlines will have to reconsider their card payment
surcharges after European Union ministers on Tuesday approved a new consumer
protection directive. One article in the directive, which will take a few years
to become law in EU member states, prevents merchants of all types—not just
airlines—from surcharging customers more than the merchant fee charged by their
card acquirer. While travel experts told BTN
that airlines such as KLM, Finnair, British Airways and Lufthansa may adjust
the surcharges they impose on travel agents, one of those carriers, Lufthansa,
said its surcharge does not come close to covering its card costs.
The new directive states that "member
states shall prohibit traders from charging consumers, in respect of the use of
a given means of payment, fees that exceed the cost borne by the trader for the
use of such means."
Isabelle
Leroy, legal advisor to European travel agents' association ECTAA, said the
directive "should indeed have an impact on airline card surcharges,
including those through travel agents. The provisions of the Consumer Rights
Directive will become applicable when they have been transposed into national
law, supposedly at the end of 2013 or beginning of 2014."
BCD Travel card program vice president Mario
Kriebel also regards the directive as significant. "It appears that the
new directive could have an impact on any airline which imposes a surcharge for
credit card costs," he said. "That could lead airlines to move from a
fixed surcharge to a percentage-based fee, which could lead to a reduction in
the current surcharge for cheaper tickets but an increase for premium tickets.
Alternatively, airlines may stay with a fixed fee that covers their costs.
"The directive may also have an impact on
merchant agreements between the card industry and airlines, because merchants
will have to be much more open about their fee structures, which is currently
uncommon in most merchant contracts," Kriebel continued. "It could
lead to customers paying different fees to use different cards according to how
much card companies charge the airline. However, I don't expect anything to
happen immediately. It is going to take a few years before the directive is
translated into legislation in EU member states."
Surcharging
customers for direct bookings, whether online or by telephone, for several
years has been commonplace in Europe, with the highest charges generally imposed
by low-cost carriers. EasyJet, for example, surcharges what it calls a "booking
fee" of €10. KLM in 2009 introduced a card surcharge of €7.50 for restricted
fare types booked through Dutch travel agents. Other carriers have followed,
including BA, which charges £4.50 for economy-class reservations, and the
Lufthansa Group (Lufthansa, Austrian Airlines, British Midland International,
Brussels Airlines and Swiss). Lufthansa is introducing different surcharges,
which it calls Optional Payment Charges, in different countries. From Nov. 2,
for example, it will charge German agents €5 for German domestic journeys, €8
for flights to the rest of Europe and €18 on long-haul routes.
"Lufthansa
will of course analyze the decisions made by the EU," said a company
spokeswoman. "It is too early to make any specific statements but
Lufthansa will of course comply with any legal framework. Nevertheless it is
important to point out that Lufthansa's Optional Payment Charge is only
covering a fraction of the costs the airline has to cover for credit card fees."