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Lawsuit Alleges $50M Airline Windfall


— November 28, 2004

Airlines worldwide are ripping off passengers and the government for more than $50 million every year in fees and taxes they pocket after reselling nonrefundable tickets, a passengers’ class action lawsuit now pending in Massachusetts claims.

“That seat is paid for twice as far as these fees but they keep it,” says Framingham attorney Evans J. Carter, who sued 13 airlines this month in Middlesex Superior Court on behalf of 16 frequent fliers.

Give up your nonrefundable seat today on one of the busiest travel days of the year and the airline is sure to resell the ticket for a windfall. It’s a dirty little secret of the skies that the government so far has been loathe to expose amid the airlines’ economic woes since 9/11, according to industry experts.

“It would open the door to a massive accounting nightmare. They would have to adjudicate every ticket and retrieve it from the various buckets,” said one industry consultant, who spoke on condition of anonymity. The consultant called Carter’s $50 million estimate for the “unjust enrichments” too low. “The airlines have made a big business out of these fees,” the source said. In fact, an average of 26 percent of your ticket is now fees and taxes, according to the industry’s estimates.

“They’ve passed so much on to consumers that it’s difficult to deduce what’s a tax and what isn’t,” the industry consultant said.

Details here from The Boston Herald.


Airlines worldwide are ripping off passengers and the government for more than $50 million every year in fees and taxes they pocket after reselling nonrefundable tickets, a passengers’ class action lawsuit now pending in Massachusetts claims.

“That seat is paid for twice as far as these fees but they keep it,” says Framingham attorney Evans J. Carter, who sued 13 airlines this month in Middlesex Superior Court on behalf of 16 frequent fliers.

Give up your nonrefundable seat today on one of the busiest travel days of the year and the airline is sure to resell the ticket for a windfall. It’s a dirty little secret of the skies that the government so far has been loathe to expose amid the airlines’ economic woes since 9/11, according to industry experts.

“It would open the door to a massive accounting nightmare. They would have to adjudicate every ticket and retrieve it from the various buckets,” said one industry consultant, who spoke on condition of anonymity. The consultant called Carter’s $50 million estimate for the “unjust enrichments” too low. “The airlines have made a big business out of these fees,” the source said. In fact, an average of 26 percent of your ticket is now fees and taxes, according to the industry’s estimates.

“They’ve passed so much on to consumers that it’s difficult to deduce what’s a tax and what isn’t,” the industry consultant said.

Details here from The Boston Herald.

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