The Consumer Council surveyed 24 airlines on the refund arrangement of the Air Passenger Departure Tax (APDT) and found that at least 3 airlines imposed administration fee to passengers. Nearly 60% of the airlines surveyed required passengers to take initiative and file refund applications, while the shortest time limit for application is 10 days from the date of departure. The Council is highly concerned and is urging the Civil Aviation Department to strengthen its monitoring over the airlines’ refund arrangements. Airlines and related trade are asked to review existing APDT refund policies and procedures to improve transparency.
APDT is a “user-pay” levy of $120 for all air passengers aged 12 years or above, unless otherwise exempted. According to Section 14 (1) of the Air Passenger Departure Tax Ordinance, air passengers who did not depart from Hong Kong on an occasion in respect of which he has paid the tax, should be refunded by the operator. In other words, even if the passenger has bought a non-refundable air ticket, APDT could still be refunded. Documents from the Legislative Council discussions have revealed that the Government has paid an administration fee to all the airlines for APDT collection and refund. Therefore, as the Civil Aviation Department stated, airlines should not impose further administration fee to passengers when a refund of APDT is arranged.
The survey covered 12 budget airlines and 12 conventional airlines, accounting for 90% and 80% share of airline by seat capacity in Hong Kong respectively. 17 of them responded to the Council’s inquiry, including 7 budget airlines and 10 conventional airlines.
Among the airlines responded, 3 budget airlines stated explicitly that an administration fee would be imposed to passengers for APDT refund, such arrangement is obviously inappropriate. Among those 12 airlines with replies that no administration fee would be charged to passengers, 3 have wordings such as “a reasonable administration fee will be charged” in the section of terms and conditions of their websites. Passengers thereby may not be able to have a thorough understanding about their refunds.
Of the 7 airlines not responded, none has stated in clear terms on their websites regarding the APDT refund and administration fees. However, 3 of the 7 airlines have listed terms such as “a reasonable service fee will be deducted” on their websites, which is an indication of possible charges for APDT refund.
Of the 24 airlines surveyed, 14 required passengers to take initiative to file refund applications, otherwise the tax would not be refunded by airlines. In most cases, passengers could file their applications online. However 2 airlines required written application by mail or fax to their offices (including overseas offices).
The time limit for APDT refund application also varied significantly among airlines, ranging from 10 days from date of departure to 7 years after the air ticket is issued. It took at least 7 working days to 3 months for airlines to process APDT refund.
The Council received complaints on relevant issue in the past. In one case, the complainant was disgruntled by the fact that his refund was still outstanding for 5 months after the application was made. In another case, the complainant bought a package from travel agent. Following reduction of administration fees for air-ticket cancellation, the APDT refunded was less than the levy paid.
When cancelling a flight, consumers are usually asked to pay certain administration fees, and which are seldom listed in reimbursement calculation details. Consumers are in no position to understand whether administration fees are also charged for APDT refund.
The Council believes that it is obviously inappropriate for individual airlines to charge administration fee for APDT refund. Furthermore, the Council is also concerned about how airlines handle the unclaimed APDT. As for the monitoring and enforcement mechanism, there are certainly rooms for improvement in effective supervision and handling of unclaimed APDT.
The Council urged the Civil Aviation Department, airlines and related travel agents to define urgently a reasonable and precise APDT refund policy and procedure, and ensure its transparency to safeguard consumer rights.
The Council suggested the following actions on APDT refund:
- The industry (including airlines and travel agents or travel website platforms) should set up a comprehensive APDT refund mechanism with details on collection and refund explicitly stated.
- Airlines should report regularly to the Civil Aviation Department details of the unclaimed APDT. The Civil Aviation Department, on the other hand, should urge airlines to perform its statutory duties and develop appropriate guidelines on tax refund, including the application channels and processing time for improvement of consumer protection.
- Consumers should read thoroughly the terms and conditions of air-ticket refund arrangement provided by airlines, travel agents or travel website platforms. Inquire the Civil Aviation Department for clarification. When encountering unusual practices, report to the Civil Aviation Department.
The Consumer Council reserves all its right (including copyright) in respect of CHOICE magazine and Online CHOICE (https://echoice.consumer.org.hk/).