Agents back Qantas over credit card fee(1)

14 February 2003

Qantas has found an ally for its plan to introduce a one per cent surcharge on credit card transactions.

Australian Federation of Travel Agents chairman Ian Carew-Reid said given the narrow profit margins involved in the industry, he could understand the airline’s reasoning behind the surcharge, which would still represent less than half the cost of the actual credit card transaction charged to the airline.

“It's also less than the average global IATA rate for credit card transactions,” Carew-Reid said.

Qantas’s marketing manager John Borghetti has defended the decision to implement the charge by saying that it would recoup less than half the transaction costs charged by banks.

The move has been allowed under Reserve Bank of Australia reforms which came into effect on January 1, allowing merchants the right to recover bank charges for credit card transactions.

Borghetti said Qantas could not continue to absorb a broad range of charges imposed on it while domestic airfares were at a historic low.

Carew-Reid added, “The simple fact is our industry has to make a profit and given the plethora of discounted fare levels available to the public, the returns to the industry are well below normally acceptable levels in the business community.

“When you look at how the taxes imposed on airline tickets by governments and other authorities are gouging the industry at a rate of around A$18-20 for every $100 of airline ticket in Australia, a surcharge of $1 in every $100 is fairly insignificant by comparison.”

Virgin Blue is also considering a charge and will make a decision soon.

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