Sunday, 18 July 2010

AirAsia online booking upgrade - are they still fraudulently witholding passengers' refunds?


"AirAsia's customers get a ticket via this Internet machine ... and they then get sent ... you call it email?? Gee whiz, that's a marvelous development, Wilbur. What if they are due a refund? I see, so AirAsia haven't cracked the technology for that." 


It has been a while since we met the AirAsia technical guys, or indeed the crooked AirAsia marketing conmen. The last time we encountered them was as we exposed one of AirAsia's hugely profitable online ticketing scams, fraudulent graft that would break the law in every country on the planet, with the exception of Malaysia. The laws are somewhat different there. This is the story of AirAsia online booking practices - and it stinks.

“Due to the high volume of passengers, it is not easy for us to track the number of no-show passengers”

Kathleen Tan, Vice President Commercial, AirAsia 

It was back in '07 we revealed that AirAsia had long been intentionally defrauding passengers - ludicrously claiming they were incapable of issuing refunds on airport taxes and fuel surcharges that should rightfully be returned to each and every passenger who misses their flight. Kathleen Tan said that it was quite impossible to track passengers to refund their money. 


Let's not forget that each time you use AirAsia online booking that they capture your credit card details and ask you for your email. Just how hard can it be to find you, we ask?  Indeed, why doesn't the AirAsia Online Booking Department simply debit the money directly to your credit card?? 

Let's say a bank - your trusted bank - concocts the excuse that its infrastructure is incapable of performing a simple task of keeping a record of its accounts. Sure, it's a baseless claim in an age where computers can land an aircraft. Instead of rectifying the situation, they make an inane statement that 'it is not easy' returning the customers' money. The onus to discover that their property is unaccounted for is on Trusted Bank's customer. 

Read this AirAsia newspaper article from '07 in which AirAsia acknowledges that they owe  passengers a refund - but that passenger has to fetch it. As luck would have it, one in a thousand remember their money is missing. AirAsia isn't going to alert them for goodness sakes! Naturally they are entitled to have it back, but first they'll get the runaround. Has he got ID? Does he have the itinerary? Keep him waiting on the phone, disconnect the call. When he calls back, he gets another 'customer support' member - start the story again. Would anyone like to explain why they are not all in jail?  

We'd like to offer Kathleen some advice. In our experience when a person arrives at your AirAsia check-in counter, a staff member enters those passenger details into your computer system, right? And when that passenger booked his/her ticket, you sent them an email itinerary, yes? Subtract the number of cattle that didn’t go up the chute, by those that did! Voila! There you have it - you might then inform absentees via that email that you have their money! Is that too high-tech for your airline?

We revealed that rip-off in November 2007 and contacted AirAsia, yet they have not changed a thing. But wait! Last week AirAsia announced that it's clearly archaic online booking system will be shut down from Friday to Sunday to allow a new, 'state-of-the-art' system to be put in place, touted to be a huge improvement over the current AirAsia online booking system. So, let's take a look at how far they've come - from the AirAsia site:

 Click to see all upgrade parameters.

Good old Kathleen Tan in a media statement Wednesday said the new and improved system will spell for AirAsia’s guests "countless benefits, including savings that will come as a result of the more efficient operational processes" created by the new system. Savings? And how about refunding money they owe? Surely it would be unconscionable and morally reprehensible to continue this misrepresentation, wouldn't it? 

 Click to see our email to AirAsia CEO, Mr Tony Fernandes.

As you can see, we have contacted AirAsia's Mr Tony Fernandes and asked him if this means the hundreds of millions of dollars in misbegotten booty that AirAsia have been dishonestly pocketing since its inception is going to be returned to its faithful flock, or at very least whether it is their intention to commence issuing refunds now that the AirAsia online Booking system is completely revamped. We'll also ask for clarification of what precisely a "convenience fee" actually is - and indeed if this is one of the 'savings' that we can expect from AirAsia's online booking overhaul.  

Professor Andrew Aeria asks AirAsia why they have introduced another "rip-off" in their "convenience fee" 

An Open Letter to AirAsia published in Malaysiakini 
by Prof. Madya Dr. Andrew Aeria

For some time now, AirAsia has been trumpeting the fact that customers only pay for their flight ticket costs and taxes. Its website loudly proclaims, 'No Admin Fee, No Fuel Surcharge, All Destinations!' Indeed, this fact is clearly seen in white reverse on a big red banner at the bottom of its main website and at various points during the online booking process.

Thus, imagine my consternation to discover that AirAsia recently decided to sneakily slip into its ticket charges a clandestine 'convenience fee' of RM5 per flight if one books a ticket via credit/ debit card! Excuse me but what 'convenience' exactly does this 'fee' give to those who buy tickets online?

It's only after you enter all your credit/debit card details when purchasing tickets in their web- booking system that the 'convenience fee' suddenly appears.  AirAsia defines this 'convenience fee' as follows: 'Convenience Fee: Please take note that this fee is chargeable at 5.00 MYR per passenger for each way when payment is made through credit card or debit card only'.

Which really is not much of an explanation. Instead, it's just rhetoric, a vacuous statement reminiscent of unscrupulous retail traders charging their clients an extra service charge of between two to five percent on top of their advertised prices in shops – a sales tactic that is not only blatantly misleading and unfair but arguably illegal since businesses and their banker friends already make huge amounts of money from credit card users.

Pray tell AirAsia, has this charge been approved by the ministry concerned? Is it even legal? And why now when travelers have been purchasing tickets online ever since Day One of AirAsia's launch over eight years ago? Why no 'convenience fee' previously?

Or is it because AirAsia is now trying to re-coup its desperate corporate losses from its loyal (and some would say 'long-suffering') customers given AirAsia's inability to turn a profit on its business model due to overly ambitious expansion plans and shortsighted fuel-hedging policies?

Honestly, given the lack of competition and fair trade in Malaysia, we ordinary travelers and consumers suffer a lot of abuse. And it's these kinds of sneaky business practices that really see AirAsia test the goodwill of its patrons who want to see the airline succeed for the long term.

It's practices like this clandestine 'convenience fee' that demand the government enact a Fair Trade Act (like the one in Australia) that genuinely protects consumers from all unfair trade practices.

It is already irritating that the government has imposed a RM50 fee on all credit cards in the latest budget; a cockeyed 'one-size fits all' measure that punishes innocent and prudent credit card users along with all those who don't know how to manage their finances.

AirAsia's sneaky 'convenience fee' thus not only adds insult to the injury of all credit/debit card users but also seeks to emulate the government's cockeyed one-size fits all approach of making travelers pay for the corporate bungles of its over-ambitious management.

It is also time we had a genuine open skies policy in Malaysia so that air travellers may receive value for money by benefitting from genuine competition in budget air travel. And scrap the 'convenience fee'. It's just another rip-off!

Original article on Air Asia online booking by Dr Andrew Aeria - Malaysiakini, Nov 5, 09 needs a subscription to Malaysiakini.

AirAsia's  Head of Communications responds to what he calls the Professor's 'spurious allegations'

AirAsia very recently imposed a convenience fee for online credit card payments. This fee is meant to recover costs in implementing, upgrading and maintaining our online payment systems. It subsidises but does not cover the full costs of the related systems.

It is also to enhance security features for credit card payments to give guests a comfortable and safe booking environment. The convenience fee is neither a surcharge for use of credit cards nor an administration fee.

In the past, we absorbed these costs. However, now that AirAsia is experiencing a rapidly growing number of online transactions, these costs have significantly increased.

This convenience fee is charged on a per way per guest basis because the costs of these systems are driven by the value of the transaction rather than by the number of transactions. As costs vary per country, the convenience fee also varies.

Contrary to the writer's spurious allegation, the convenience fee is not only legal but an accepted industry-wide practice. Several other airlines, both legacy carriers and low-fare carriers, have imposed such fees, which the writer could have confirmed with a little bit of research. In fact, our fees are the lowest in comparison with those airlines.

AirAsia has other payment channels that do not impose the convenience fee. The fee is not imposed on transactions using direct debit, E-Gift Voucher and credit shell. Neither is it imposed on transactions made through the call center, at airport sales counters and at sales offices where the normal service fee applies.

The writer's allegation that AirAsia 'decided to sneakily slip' the convenience fee into our charges is unfounded. Our online booking system clearly shows that we impose a convenience fee.

His accusation that AirAsia guests get to know about the convenience fee only after they enter their credit card details is false. Information about the convenience fee is reflected on our
website, right above and before the portion asking guests for payment details.

As for the contention that the convenience fee is being imposed because of AirAsia's financial situation, we believe that this is an unfounded allegation. AirAsia has been consistently profitable in its operations since the new management took over in 2001.

The only year in which the airline suffered losses was in 2008, due to the volatility in fuel prices and our decision to unwind our fuel hedges and buy fuel on the spot market. This courageous move by the management has since proven to be the correct one given that other airlines are still sitting on huge losses because of their hedged positions on fuel.

AirAsia has been praised by analysts and experts for its transparency on this issue. AirAsia, though effective business planning and implementation, has contributed positively to the growth of Malaysia and the Asean region.

We have developed tourism and helped mitigate the impact of the economic crunch on the local economies. We have served countless communities with our low fares. By winning accolades in the aviation and tourism sectors, we have done Malaysia proud. It is unfortunate that the writer appears to have overlooked the positive impact of AirAsia and instead chosen to launch a scurrilous attack on our company for reasons best known to himself.

Trust the doctor, or the spin doctor? 
AirAsia -  economy - with the truth.
 Which AirAsia website do you trust?  




Simon said...

Hello, I enjoyed reading your blog.

I was wondering if I could ask a favour? I’m currently doing my disseration for my Master’s Degree and I’m wanting to ask people’s opinions on the subject of air travel. Especially of interest are those residents of Hong Kong.

If you could just take a few minutes to help complete my survey, I’d be most grateful.

Anonymous said...

I must say, that this is the best factual blog I have ever seen about Air Asia and their close to fraudulent dealings with their refunds, even when it is the fault of Air Asia or they cancel a flight, hoodwinking and coercing customers to accept options, which, unless they remember before they purchase, can the insurance, which is only possible for resident Malaysians, yet it is automatically added when booking a ticket...then to change this one has to go through a tricky "reverse psychology" or is it Malaysian logic or lack of common sense to actually cancel this again. Even when you have just made a booking and call them 2 min later about a mistake you made and that you wish to change something, they claim it is impossible...I agree with this blog, they are cons and thieves and it is surprising that there is no consumer protection law that actually stops this thievery... but as you say throughout the blog...this is Malaysian honesty or lack thereof.. I would rather pay more for another airline than put money into their pockets... this credit card convenience fee..when i book for 4 passengers they charge the fee 8 times although there is only one single transaction involved...bloody any other civilized country..oops sorry ..yes this does not seem to apply for Malaysia... they would have one court case after another from the consumer protection law...they definitely need a good kick in the goolies...but then as your blog says..they are all under one blanket.....

Anonymous said...

Hi, i thought AirAsia had agreed to comply with Australia Consumer Law on the single pricing (ie, no hidden fees, all applicable mandatory fees are displayed as single figure). What's with the extra charges?