Air miles devalued by extra charges

BRITAIN'S FIVE million Air Miles collectors face sharp increases in the amount they must pay to redeem "free" flights.

From next Friday British Airways is introducing additional charges that could add pounds 15 or more to the price of journeys made by members of its frequent-flyer scheme.

Last November BA instigated a move to list passenger service charges (PSCs) as a separate item on air tickets. These fees make up part of the normal commercial charges made by airports, and until now have been included in the ticket price.

The extra charge is being represented on tickets as a new tax, even though it is neither new, nor a tax.

Carriers have used the change as a back-door means to increase fares, in effect making passengers pay twice for a single element of the airline's costs.

Initially, Air Miles - the BA subsidiary that operates the scheme - said it had no plans to levy the charge on members. But inquiries by The Independent have revealed that for bookings made from next Friday, 9 April, collectors will have to pay an extra fee.

The amount varies from one airport to another, and may apply either to departing or arriving passengers. In the case of a flight from Aberdeen to Belfast, the charge will add pounds 17.80 in addition to the pounds 10 Air Passenger Duty - a genuine government tax - already payable. On "free" flights from BA's busiest airports, Heathrow and Gatwick, passengers will pay an extra pounds 7.30 and pounds 4.80 respectively. The company will not say how many Air Miles are in circulation, but there are believed to be several billion.

Because of the increase in the cost of redemption, they have effectively been devalued.

Judith Thorne, group marketing director for Air Miles, said the increase was because the parent company was demanding higher payments for seats on its flights: "We will be charged PSC by British Airways, just as other travel agents are. We therefore need to pass this on to the customer."

Consumer groups reacted angrily to the Air Miles move. Bob Tolliday, of the Consumers' Association magazine Holiday Which?, said: "It's just a price rise that's under the smokescreen of an increase in charges, and another example of BA abusing its dominant position in the marketplace."

Some of BA's rivals, including Virgin Atlantic and KLM, have already begun adding the charge to frequent-flyer bookings. In the case of a KLM passenger between Edinburgh and London City, this means an extra charge of pounds 13.

The Air Miles move is likely to come under scrutiny from the Office of Fair Trading. The watchdog is already investigating more than 20 complaints from consumers and the travel industry about the addition of PSCs to fares, and has asked airlines not to represent the charge as a tax.

And this week the Association of British Travel Agents began High Court proceedings against BA, Virgin Atlantic and Lufthansa, alleging the use of misleading prices.