Amex, MC, Visa Accused Of Hiding Fees
American Express earlier this month was accused in a class-action suit of being deceptive in its disclosure of foreign currency conversion fees, the same week that a California Superior Court judge ruled that MasterCard and Visa indeed were deceptive in their failure to disclose similar fees.
The judge on April 7 ordered the two card networks and their issuing banks to disclose those fees to cardholders in agreements, applications, solicitations and monthly billing statements. He also ordered MasterCard and Visa, which both charge a 1 percent fee for foreign transactions, to return to cardholders the fees they have charged since 1996, which have been estimated at more than $800 million.
Amex imposes a 2 percent fee on all international transactions. Amex, Visa and MasterCard currently mandate the disclosure of these conversion fees solely in cardholder agreements. MasterCard and Visa said that before changing this disclosure process or reimbursing cardholders, they plan on challenging the decision with an appeal, while Amex has vowed to "vigorously defend this action."
TQ3 To Launch Consulting, Mobility Services
TQ3 Travel Solutions is set to launch a joint venture with what it described as "one of the world's largest consulting firms." CEO Marc Hildebrand this month told the Institute of Travel Management annual conference in London that the new business would provide "worldwide consulting in regards to process optimization, and this is not just restricted to travel management." More details will be announced in midsummer, with a launch following in the autumn. TQ3 by year-end also plans to launch a mobility management operation. Hildebrand said this would include not only traditional T&E expenses but also "mobility costs, such as car fleet management, mobile communication, relocation services, insurances, cash and payment systems and mobile offices. Total mobility management will enable companies to report and utilize consolidated data of all mobility expenses." Both the consultancy joint venture and mobility management will be overseen by a newly formed strategic business development operation based in Paris.
Lower-Cost Carriers Growing Fleets
JetBlue Airways, which last week posted a $17.4 million first-quarter profit, purchased 65 additional Airbus A320 aircraft, with options for another 50. The carrier, with 41 A320s in the fleet and another 46 already on firm order, could field more than 200 aircraft by 2012. "With this order, JetBlue demonstrates that with the right people, the right product and the right cost structure, airlines can grow, even in this current, challenging environment," said Airbus CEO Noel Forgeard. AirTran Airways will average two new Boeing 717 deliveries per month for the rest of the year and expects to finish 2003 with 73 of the aircraft. The carrier also said it is nearing a large order for as many as 100 new planes from either Boeing or Airbus. Southwest Airlines, meanwhile, recently converted options on four Boeing 737-700s to firm orders. The carrier in 2004 now is scheduled to take delivery of 25 planes and has options on nine more. These fleet additions come as several of the major U.S. carriers continue parking planes in the desert amid an ongoing traffic slump.
KLM To Rework European Model
To boost European traffic and yields, KLM Royal Dutch Airlines said it will offer three service concepts and fares—base fares, economy fares and select fares—beginning June 1 on most European routes. Select fares will provide, in Amsterdam and elsewhere, separate checkin, fast-lane passport-control service, free lounge access and discounted valet parking. Highest of the three levels, select fares will be 5 percent to 13 percent lower than current business class rates, on average, for the Dutch market.