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July 2, 2012

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It's buyer beware on discounted air tickets

MORE than 90 percent of airline tickets that are promoted as having discounts of over 90 percent are actually illegal, putting consumers at risk of losing money, according to an aviation industry report.

The report, released by and Grass Roots Consulting, said over half of online ticket agents lured customers by putting up fake low-rate ticket information that doesn't exist or requires extra charges.

Others cut ticket prices by organizing individual passengers into groups or improperly applying airlines' discounted prices for VIP clients or seniors to ordinary passengers.

"Sometimes passengers can still get onboard with the tickets because of the loopholes," the report said, but more often they are subjected to penalties and other unfavorable terms on issues such as ticket refunds due to the discounted prices.

Also, a Shanghai Daily investigation found that with discounts, passengers can experience high cancellation fees and other problems.

Shanghai resident He Kang, for example, went to court and won against a Shanghai-based airline that charged him over 8,000 yuan (US$1,256), or 40 percent of the ticket, when he wanted four return tickets refunded.

He, who purchased four discounted return tickets from Shanghai to Rome online in April 2011, canceled the trip for personal reasons. After being hit with the high refund charge, He took the case to the Pudong New Area People's Court, given that the normal refund charge was 20 percent.

The airline argued the higher fee was reasonable for discounted tickets like the one He had purchased.

Rules have changed

Domestic airlines formerly charged refund fees according to time the refund was requested, but changed to the current policy in 2007.

Under earlier rules, airlines charged 5 percent of the ticket price when a passenger wanted to cancel the ticket 24 hours before takeoff. The fee rose to 20 percent when cancellation came within two hours of takeoff.

But now, many domestic carriers charge 5 percent to half of ticket value for refunds on discounted tickets.

For instance, China Eastern Airlines charges 10 percent of the ticket price for tickets sold with less than a 20 percent discount. Passengers may get 80 percent refunded if they buy a ticket with a 30 percent discount. The airline charges 50 percent when tickets are bought at a half discount.

China Southern Airlines charges similar fees, but refuses to refund tickets with 60 percent discounts.

However, the charge may also skyrocket to 80 percent when customers buy tickets with extremely low prices from unofficial agents or from websites, a customer service representative of China Eastern said.

In another ongoing case at local court, a passenger was charged a fee up to 80 percent of the ticket price after he cancelled his flight from Beijing to Shanghai. He also took the carrier to the Pudong court.

The court ruled the airline had to lower its fee to 20 percent and return the extra charge to the plaintiff.

"The refund fee of 80 percent was obviously too high," said Gu Jiangping, the lead judge on the case. The contract was unfair to the passenger and caused financial damage to the customer, the judge said.

Airlines argue when the ticket price is extremely low, it causes losses to carriers if passengers cancel.

It may bring some losses if passengers cancel, but absences also save on service and fuel, said Zhang Qihuai, a lawyer from the Lanpeng Law Firm who handles civil aviation cases.

Passengers with discounted tickets also may have trouble getting an invoice, they may be asked to make up the price gap or even see their boarding pass rejected if they bought from an agent who pulled a price trick, according to the report.


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