While Qantas isn’t renowned for its exceptional levels of customer service, it is being challenged by the Singapore-owned, Australian division of Tiger Airways, which is doings its best to plumb new depths in consumer relations.
As is reasonably common in the airline industry, Tiger has taken to regularly offering inexpensive headline fares while back-ending a large number of miscellaneous costs such as fuel charges and government taxes in the “Taxes and Charges” section. In this respect, Tiger is not alone, with airlines across the world loading up the taxes and charges and reducing the headline fare to, firstly, make the prices appear lower than they actually are and, secondly, reduce the commissions which need to be paid to travel agents.
Crikey has been told of a recent instance where a Tiger customer purchased a return flight to Singapore. The headline cost of the ticket was only $41.29. However, their “taxes and charges” amounted to $271.11. The Tiger customer later sought to cancel their booking. While willing to sacrifice the fare, the customer sought a refund of the taxes and charges — seemingly a fair request given that the flight was not being taken and the taxes/charges (which technically are being paid by Tiger to third parties) would not occur. For example, assuming Tiger re-sold the seat (highly likely), it would collect two “fuel surcharges” – the second surcharge being entirely profit.
Upon contacting Tiger, the aggrieved customer was told that they would only be entitled to a refund of certain taxes and charges amounting to around $90 out of $271.11 paid. But in order to receive the refund, Tiger would charge a $100.00 “administrative fee” (or $50.00 per leg), effectively defeating the purpose of seeking a refund.
Crikey did its own test run to see how consumer friendly Tiger is. We booked a faux flight to Singapore, which came to $210.71AUD for the fare and a hefty $184.68AUD for the “Taxes and Fees”. When we clicked on “details”, a box appeared which noted “Departure: $184.68 AUD – Taxes, Fees and Charges” – thanks for that Tiger, very helpful. Crikey even called Tiger to try to get a more detailed breakdown. The Tiger representative stated that she was unable to provide a breakdown of the taxes and charges, noting only that part of the taxes was a “terminal tax”.
On Tiger’s website, in the section “Fare Rules”, it states that “Tiger Airways fares and charges are strictly non-refundable”. No mention is made of the “Taxes and Fees” being non-refundable though. Consumers would be justified in concluding that given the site states that the fare is non-refundable, that would mean the taxes and charges were fully refundable. No further information is provided — when the customer tries to click on the link to Tiger’s full “Conditions of Carriage”, it simply takes them back to Tiger’s Home page (implying that no-one has ever read the full conditions). Nowhere on the booking page does it mention that the customer will be charged any sort of fee should they seek a refund on taxes which they have paid in advance.
It would be extremely unlikely that Tiger’s costs are anywhere near $100.00 ($50.00 per leg) to process a refund and therefore, under the principles of contract law, charging a customer $100.00 as an administration fee would amount to an unenforceable “penalty”. This is further reinforced by the fact that the consumer is not told of the fee prior to purchasing the ticket and has very little bargaining power vis a vis the airline.
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Despite the gross unfairness, it is hard to imagine the ACCC daring to bring any sort of action against the Singapore-owned Tiger on behalf of Australian consumers — it’s a little too preoccupied with the petrol price.