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2007
Airline credit cards fees called into question
Wednesday September 30, 2009
Credit cards fees and associated costs charged by airlines have come under fire by Choice after the consumer group claimed that despite falling merchant fees, airlines are still charging excessive flat rate booking fees, among others. In fact, the Choice report found that airline customers can pay almost six times the standard rate for a MasterCard transaction, which is 0.86 per cent.
Choice stated that it was even those special internet offers of low fares that would have the most significant expensive credit cards fees as they charge a flat fee per passenger and not a percentage of the total cost of the ticket.
This means that while a person may buy a flight for $30 on an internet sale, they will still pay all the usual amounts of credit cards fees and charges which can easily raise the price back up. For example, some of these attached fees can range in cost such as the Tiger Airways $6 per passenger "convenience fee" and the $7.70 per domestic flight passenger credit cards charge by Qantas, with international flights charges going right up to $25 per passenger.
Airlines are defending these charges however, saying that such fees were necessary to recover costs. Qantas stated that such fees for credit cards transactions were actually lower that any costs they actually receive by accepting payment through credit cards.
A Qantas spokesman said "We believe our approach is straightforward and have standardised the fees to provide transparency and to ensure customers are always aware of what the additional cost will be where they use a credit card,"
Christopher Zinn, Choice spokesman, stated that the consumer group think that airlines should attach a flexible rate based on the cost of the flight as opposed to a flat rate, which would be better suited for people buying domestic flights.
"We think it's fair for there to be some cost ... but it shouldn't be a profit centre," he said.
"There's even a number of large online organisations such as Amazon who don't charge anything for credit card transactions, so why can't the airlines do it?"
The Choice report suggested that consumers use alternative means to pay for their airfares, such as debit cards, which do not have such fees attached as transactions using credit cards.
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