I am not sure I understand why people are so reluctant to use the chargeback feature of their card. There is no excuse in this case and there is no reason why OP ought to have to haggle about service fees and the like.

A chargeback when done in writing and in clear and concise language puts the shoe on the other foot, e.g. leaves the consumer in control. The service was not delivered, this was an involuntary cancellation, the passenger is contractually due a refund (even absent EC 261/2004) and the carrier is foot-dragging.

When the carrier sees the chargeback, it has the opportunity to refute the consumer's presentation of the facts. Here,it won't.