U.K. Travel Managers Raise BA, Virgin Refund Concerns

After the law firm that negotiated the settlement by British Airways and Virgin Atlantic for illegal fuel surcharges in 2008 told EuroBTN last month that it would move swiftly to address a barrage of complaints from U.K. travel managers about the administration of surcharge refunds, another 20 corporate travel managers in the United Kingdom contacted the Institute of Travel & Meetings about problems in obtaining the refunds.

As BTN was going to press, sources said ITM was close to securing a commitment from the law firm, Hausfeld—which negotiated a £73.5 million class action settlement in February 2008 with BA and Virgin for unlawful joint setting of fuel surcharges—to change the way refunds are distributed. Buyers had complained about receiving checks for less than they were expecting and without any supporting documentation. The change will be to send statements to corporate clients along with their payments, itemizing which claims have been upheld and which have not.

ITM circulated EuroBTN's Oct. 22 story to buyer members last month, and 15 replied to chief executive Paul Tilstone within 24 hours that they too were experiencing difficulties. ITM has been communicating since early last month with Hausfeld and Feinberg Rozen, another law firm that Hausfeld appointed to administer the payment of partial refunds to both corporate clients and individual passengers who paid the surcharges.

"Our intention is to follow these claims to their conclusion to ensure our members receive processing according to their corporate needs," said Tilstone. "We are also engaging with the administrators about changing the process to account for the differing needs of corporate claims as opposed to independent traveler claims. We are making some progress but naturally we have had to demonstrate the severity of the situation to the administrator to gain any traction."

BA and Virgin set aside a multimillion-pound sum for settlement last year, following class actions for unlawfully conspiring to fix a fuel surcharge. The refunds, which are partial, are for surcharges on long-haul tickets issued between August 2004 and March 2006. Four current and former BA executives are facing trial in relation to the incident.

While some travel managers appear to have been paid in full, others have heard nothing from Feinberg Rozen, administrator of the Air Passenger Refund Settlement Fund. Many more have received partial refunds, but with no supporting information allowing them to understand which claims have been upheld and which have not. Instead, all that has been enclosed with cheques is a general statement that some claims were not upheld because they already had been paid to individual travelers, were disputed or need to be paid to individuals.

PricewaterhouseCoopers UK and HSBC are among the major corporate clients unhappy with the treatment they have received. "The inability to reconcile claims against payments is the key source of our frustration," said Mark Avery, head of business services for PwC UK. "We had to submit data to them line by line, so why can't we get a line-by-line response? We have received only two-thirds of what we were expecting and we are struggling to obtain the detail to understand what we have been paid. The first problem has been finding the right people to speak to."

Lee Whiteing, U.K. travel and fleet manager for HSBC, told a similar story. He submitted a claim for 14,000 refunds, but so far has received only two cheques worth £3,000 that carried no supporting data. Furthermore, the cheques were sent to HSBC at its global headquarters in London with no name on the envelope, resulting in it taking several weeks for them to reach Whiteing. After numerous e-mail inquiries to the administrator, Whiteing subsequently discovered another three cheques had been sent to HSBC, including one for £97,000 that had not yet come to light. Whiteing told EuroBTN the administrator originally informed him he would have to wait six months for a new cheque to be issued but since relented and said it would issue a new one.

Whiteing also requested data breaking down the payments and eventually was sent three spreadsheets itemizing claims that were rejected, but not those that were accepted.

"We have no way of tying the cheques to the claims," according to Whiteing. "Some of the fares for disputed claims were paid by our travel management company, HRG, so we believe there is no way individuals could have claimed for them. We have no way of knowing how much we should be compensated. Every travel manager I have spoken to is in a similar situation."