Airlines collected UK airport tax despite exemption, claim travel agents

They say flyers were not told UK upped age limit for tax exemption to 16 years from 12 in March 2016

Teenagers may have paid a higher price for air travel from the UK for over a year as airlines did not inform agents of a tax exemption.

All passengers departing from an airport in the UK pay air passenger duty (APD), which varies according to distance and class of travel. While economy class passengers till the age of 12 are exempted from the APD, the UK authorities extended the exemption below the age of 16 from March 2016.

The Travel Agents Federation of India (TAFI) has claimed that airlines did not inform them about procedures to issue tickets without charging the duty amount in the ticket price. The agents have also demanded a refund for customers.

Economy class passengers from London to India are charged 75 pounds and it is included in the ticket price.

The issue came to light last month after a customer complained to an agent of overcharging. Following this, TAFI raised the issue with airlines.

Air India, Jet Airways, British Airways (BA) and Virgin Atlantic (VA) operate non-stop flights between India and London. A large number of passengers travel one-stop on airlines including Emirates and Etihad Airways.

"There has not been any circular from your airline to travel agents informing about this tax abolishment. Neither has any procedures been informed to collect the tax refund for passengers....It is quite clear that mechanisms exists with the GDS (global distribution systems used by agents for ticketing) to deduct this tax at the time of ticketing. However no efforts have been made on that front either," TAFI said in a May 10 letter to airlines.

"Even now some airline websites are not equipped to provide exemption to passengers between 12-16 years. Also the airlines are silent on the issue of refund," said Rajat Bagaria, TAFI's joint secretary.

While a passenger can book a ticket through an airline website, travel agents use global distribution systems (GDS) such as Amadeus, Travelport and Sabre to issue tickets.

Ticket prices are preset on the GDS system and it is an airline's responsibility to ensure that the correct break up of fare and taxes are available on the system following any price revision, an aviation industry expert said.

Traditionally tickets are available in three age categories - infants (less than two years), children (2-12 years) and adults (above 12 years) and websites and GDS display booking options in these broad categories.

Websites of BA, Emirates and VA have booking option for passengers between 12-15 years if travel is from an UK airport. Jet Airways website mentions that tax exemption will be applied if passenger is between 12-15 years.

Following the complaint, Air India, Emirates and Amadeus issued circulars to inform agents about the procedure which allows for tax exemption while booking.

In its response to TAFI, Jet Airways said it had issued a circular regarding issuance and handling of such cases in early 2016 and added it was compliant to norms. Jet Airways did not respond to a query from Business Standard.

In its response to TAFI, BA said that its systems were in place to facilitate the exemption at the time of booking since early 2016 and there should ideally be few or no tickets where this tax was charged wrongly. "These changes are in the public domain and we do our utmost to reiterate the same in the spirit of working together," BA said.

A BA spokesperson said customers who have booked tickets on its website will receive automatic refunds upon departure (in case of international flight) or completion of final leg of domestic flight.

"Customers who booked through a travel agent and whose bank statements show their payment was made directly to British Airways will also receive an automatic refund. Customers whose payments were processed by a company other than British Airways will need to apply to their travel agent for their refund," the spokesperson said in an emailed response.

"We have a separate website for the trade to get all the information and news updates on Virgin Atlantic. The news around APD exemption was updated last year as a stop press where the agents could get the information. Moreover, when our customers book with us, they can select the age for the children and accordingly the website charges the correct amount. We are giving refunds to 12-16 year olds. Customers just need to contact our refunds department," an airline spokesperson said.

Air India, Emirates, Etihad and IATA did not respond to queries. Amadeus shared its March 2015 blog giving details of pricing procedures.

A spokesperson for the UK's treasury department declined comment on specific issues raised by travel agents. "The government is now in a pre-election period and so we are not able to promote current government policy in case it influences the election in some way," a spokesperson said.