Reasonableness sanity check - refund of fuel surcharges on Virgin Australia
 

First off, I have to say that in the situation described below (and the original booking), the people at Virgin America are honestly the nicest airline folks I have dealt with in a long, long time. But I feel like the airline is not really being fair about something, and before I press it, I'd appreciate a sanity check. Facts:

1. Booked 5x business class award tickets to Australia on January 21, 3 p.m. Assessed total "taxes" of $2,171. Comprised of actual "taxes" of $160 and fuel surcharges of $2,011.

2. January 22, 7:15 a.m. - media reporting that Virgin Australia no longer assessing fuel surcharges. Call Virgin Australia, advised to call Virgin America as only they can refund fuel surcharges where they collected them (fair enough). Virgin Australia says they will be refunding fuel surcharges to Virgin America, for future travel, as they are not permitted to retain them, and they suggest I call Virgin America and get my money back.

3. So, within 24 hours window for free re-booking, call back to try to get my money back. Basically told no way. exchange emails on February 8, basically told no way, and February 26, basically told no way. (Yes, I am persistent - because it's $2000 bucks and Virgin Australia says they already gave it back to Virgin America.)

4. March 22, press reporting Virgin AMERICA will no longer assess fuel surcharges on Virgin Australia.

5. Try again by phone. Now, they say they can "refund" me back the fuel surcharges, but only by reissuing the tickets. They want $500 ($100 per pax) to do so. I ask for a waiver on these facts. Waiver request makes it up to management - rejected.

6. So they refunded me the money, but less $500. I feel like them taking the $500 on these facts is really quite unfair. Maybe I should be happy with my essentially $1400 refund and let the rest go. But it still feels wrong.

Comments?

IMO -- the VX policy wasn't in place until the announcement on 3/22. While it would've been a nice gesture on behalf of VX to waive those charges (and slightly surprised they didn't), they are well within their rights since you purchased the award ticket with the knowledge that you were going to be dinged a fuel charge.

I did notice that you are an elite but not an VX elite? One way that you could've gotten around that is to status match to VX (to avoid redeposit fee which I'm assuming is the fee you ended up paying).

They can certainly reissue reward tickets administratively without imposing a $100 reward redeposit fee to do so. There's no reason that this fee can't be waived -- it costs them nothing. The fee isn't even designed with this scenario in mind: it's intended to discourage people from canceling free tickets (thus wasting inventory) without penalty. It's not like VX incurs a cost to reissue tickets or suffers a loss of inventory.

Why didn't you just cancel within the 24 hour window?

Because they (Virgin America) still would have wanted at that time to charge me all the fuel surcharges, even though Virgin Australia was no longer charging them, and as much as I'd like my fuel surcharges back, more so I'd like to go to Australia this winter.

Basically - it took Virgin America 2 months to get their computer caught up and in a position to issue without fuel surcharges. So, I am paying a $500 change fee for fact of waiting for this catch up period to occur, despite that I was all over this on day 1 (and Virgin Australia claims they had refunded my fuel surcharges back to Virgin America long before Virgin America got their computers caught up to handle the new regime).

I appreciate the replies...

I was under the impression that US DoT rules required both foreign and domestic carriers to allow cancellation within 24 hours.

The point is the OP booked an award flight 2 months BEFORE VX eliminated the charges in question on VA. Thus it would have made no difference to cancel within 24 hours as the charge the next day would have been the same as the day before for an award booking.

Yes but VA announced the elimination of charges within 24 hours of the initial booking. I would have expected that within a short time VX would also stop charging them. Given the amount I think I would have cancelled the tickets and waited for the updated fares, unless of course I had to fly before then. The OP doesn't say when flight was. I am surprised it took them 2 months to change their policy, then charged a change fee to refund money they basically had no right to. That seems both irregular and unethical.

The 24 hour rule doesn't apply to award flights, I don't think.

But, this is ridiculous. They should give you your money back. They should have given it to you without re-issuing the tickets. They collected it for someone else, that someone else returned it to them. They have to return it to you; they have absolutely no right to keep that money. It's not theirs. Send them a letter (not an email or a phone call) and request it.

If you don't get anywhere, file a complaint with the DOT.

Not sure all of the DOT guidance refers only to reservations without qualification.

The problem is that technically, miles have no value. So a "refund" doesn't make much sense.

Although, actually, you could probably argue that they would have to refund the fuel surcharge (which is cash) if not the points.

However, collecting money on behalf of someone (acting as a middleman) and then keeping it when they return it is outright theft.

Thanks all for the thoughts here.

I sent a short (under 1 page), polite physical letter to the CEO's office at the Burlingame corporate HQ address, reiterating that while everyone was super polite and helpful, I thought the wrong result was reached and would ask for reconsideration of the $500 in change fees.

I will let you all know what the response is. Thanks again.

I'm going to go against the popular census here and argue Virgin America has no obligation to refund the fuel surcharge, regardless of whether they were refunded the YQ from Virgin Australia.

The fact of the matter is that the OP paid for the taxes and surcharge on the award ticket knowing that he was going to have to pay ~$2,000 in YQ. Both parties reached an agreement on the price as soon as the OP paid (or 24 hours after he paid, if we take into account the refund period). I don't see why the OP is entitled to a refund later on when the YQ charges are dropped.

If you give me $200 to give to a mutual friend to repay a debt, and that mutual friend says, no, there was no debt, does that mean that I can keep the money? Or should I give it back to you?

Not the same situation. There was an asking price for an item, he already paid for the item (he agreed to the asking price) and now he wants a price adjustment because the cost to acquire said item changed for the supplier. Since when are prices dependent on the cost at which a supplier or merchant acquires the product at?