U.K. TMCs Urge Clients To Dissuade Individuals From Making BA, Virgin Refund Claims - 2008-07-29

U.K.-based travel management companies are urging corporate clients to discourage their travelers from making individual claims for British Airways and Virgin Atlantic fuel surcharge refunds. They are warning that these might duplicate a client's bulk claim for compensation, leading to disputes with refund administrators and lengthy delays in compensation.

Members of the United Kingdom's Guild of Travel Management Companies are sending letters to clients this week advising them of the situation. GTMC members are attempting to harmonize the management information they will send to administrators of the refund program. The GTMC has chosen Option 4 of the options for data presentation outlined by the administrators: corporate name, deal code, airline and ticket number.

The rush for compensation has been triggered by the administrators placing advertisements in British newspapers inviting purchasers of BA and Virgin long-haul tickets between Aug. 11, 2004, and March 23, 2006, to claim a partial refund of the fuel surcharge that was levied on them. Following class actions by two U.S. law firms for unlawfully conspiring to fix the surcharge, the two airlines have agreed to pay back one-third of the amount, which varies between $8 and $40 per ticket.

BA and Virgin have set aside $147 million to fund refunds in the United Kingdom and $59 million in the United States. Claims do not have to be filed until Dec. 31, 2012, but according to Tom Stone, director of the consultancy Sirius Management, British travel managers have been bombarded with enquiries from travelers and senior management about compensation.

Travel managers require historical data from their TMCs to claim for all relevant flights taken by their travelers, but the fear is some travelers will take matters into their own hands and jeopardize the corporate process. "If corporate clients file a bulk claim, but four or five travelers have already made individual claims for the same flights, then the whole bulk claim may be disputed," said Tony Berry, director of distribution services for HRG and a member of the GTMC's air working party. "It could be a substantial sum of money for some clients, and they will not want their claims to be going backwards and forwards with the administrators."

Stone warned that TMCs are taking different approaches on whether to charge clients for providing the data needed to obtain compensation. He urged TMCs not to overcharge. "A large number of accounts still pay management fees based on a percentage of their travel expenditure, so TMCs are already earning more for the proportionally larger amount their clients overpaid for surcharges," he said.

GTMC chief executive Philip Carlisle responded that, "It will take time to recover the data, and there is clearly a cost involved in that for the TMC." Berry said HRG is making a "token charge" to its clients for providing data and handling disputes.