cearta.ie

the Irish for rights

Airlines are facing legal challenge over refunds

Small palm tree, via Steve Hedley's restitution siteUnder the above headline, Paul Cullen has an excellent piece (sub req’d) on the front page of today’s Irish Times, to the effect that the newly created National Consumer Agency (NCA) is planning a legal challenge aimed at forcing airlines to pay refunds to customers and to display their prices more clearly. The NCA has various airline practices firmly in its sights (and anyone who has been on a plane recently knows exactly what they are), but one line in the article particularly caught my attention:

The airlines are to be asked why … the taxes and charges they collect on behalf of airports are not refunded if a passenger does not fly.

Irish airlines are hardly unique in being slow to refund unincurred taxes and charges (see, for example, the UK’s Air Transport Users Council (AUC) report (pdf) on the issue, and some US stories here and here). One recent online report discussed Ryanair’s less than helpful practices in this area.

Nevertheless, as I have said on this blog before, in my view, as a matter of law, taxes collected but not due must be refunded. In my view, therefore, the NCA has solid legal grounds for this aspect at least of its actions against airlines, and I look forward to further developments in this story!

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3 Responses to “Airlines are facing legal challenge over refunds”

  1. Ronan says:

    Interesting indeed. I read this article.

    Personally I feel the Irish Aviation Authority have a large part to play in facilitating the answer to this question. The consumer protection strand of their remit is far from active. Although in recent months efforts have been made to bring that along some way.

    In relation to taxes due. If I purchases a good in a supermarket I automatically pay VAT at 21% if that good is returned the ‘consideration’ rebated should reflect an amount encompassing taxes at source.

    If the government levies taxes on airplanes leaving the state on a per seat basis the unused seat at the choice of the passenger is still being levied at the nominal rate of taxation for accessing and leaving the state. If an airline seat is resold and some other person pays the tax then I can see a consumer refund policy working, but not in any other model.

    Like in Telecoms, the issue here is price transparency. If we can break that down then this issue can become a moot point.

    The competition cases between BA and Virgin on fuel surcharge collusion coupled with the recent Microsoft v Commission final judgment should really make companies in the consumer and indeed FMCG sectors sit up and look out.

    Aer Lingus do/did operate a refund policy on taxes in the past and I availed of it on a few occasions. I don’t believe other airlines followed suit.

    Speaking of taxes, it continually amazes me how many tax breaks are available that people are unaware of and indeed remedies in order to check an employers accuracy in applying the PAYE regime to the cash we receive at the end of a monthly pay cycle.

    Ronan

    PS: I wonder whether a favourable taxation regime might have assisted the (non story) that was Aer Lingus pulling out of Shannon airport?

  2. […] Contracts) Regulations, 1995 (S.I. No. 27 of 1995); and this is not the first time that the NCA has rattled its sabre at the airlines. And this all deserves lots of coverage, not only on RTÉ but also on the NCA […]

  3. What is making flights so expensive theses days? It is hard to know how much to charge during economic times, because you need to make money but you also don’t want to ward off potential customers.

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Me in a hatHi there! Thanks for dropping by. I'm Eoin O'Dell, and this is my blog: Cearta.ie - the Irish for rights.

"Cearta" really is the Irish word for rights, so the title provides a good sense of the scope of this blog.

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