FORT WORTH— American Airlines (AA) has refunded more than $900,000 in overcharged taxes to AAdvantage members who redeemed award tickets for child passengers. The carrier had billed the full adult tax rate on routes where reduced child rates should have applied.
The U.S. Department of Transportation (DOT) laid out the case in a new order. The overcharges involved award travel tied to 14 jurisdictions, including flights linked to London Heathrow (LHR), Tokyo Narita (NRT), and Rome Fiumicino (FCO), and followed a passenger complaint filed in 2015.
How the Award Ticket Overcharge Happened
American collected higher taxes on award tickets that carried a child passenger. Fourteen jurisdictions apply a lower charge to child travel, yet the airline charged the full adult rate on these bookings. Many affected members likely never realized they had paid more than the correct amount.
The 14 jurisdictions are Antigua and Barbuda, Australia, Belize, Cayman Islands, China, Colombia, Greece, Hong Kong, Italy, Japan, Saint Kitts and Nevis, Saint Lucia, Trinidad and Tobago, and the United Kingdom.
American stated that it did not retain the money. The airline said it only submitted overpayment claims to the relevant taxing authorities on behalf of customers when passengers requested it.
American Airlines Position on Child Fare Tickets
In the case of the Japanese charges, American argued that it held the discretion to decide whether the higher taxes applied.
The airline said the 50 percent discount depends on whether a child travels on a “child fare ticket.” If the ticket does not qualify, the full rate of the Japan Passenger Service Facilities Charge (J-PSFC) applies and must be collected by the carrier.
American asserted that classifying a ticket as a “child fare ticket” rests with the carrier. The airline stated that it does not treat award travel for children as a “child fare ticket,” and on that basis argued it had properly collected the full J-PSFC.
The Complaint That Triggered the Review
On April 17, 2015, Mike Borsetti filed a formal complaint with the DOT. He reported being overcharged taxes on award tickets from Italy and Japan and flagged similar overcharges on coach award tickets out of the United Kingdom. American said it had corrected the issue at that time.
The DOT Office of Aviation Consumer Protection found that American violated the law by misrepresenting the amount of taxes due on its award tickets.
The order confirmed that American issued refunds to all affected passengers, totaling more than $900,000.
DOT Findings on Timing and Enforcement
According to the DOT, American stopped overcollecting the taxes by May 2015. Public reporting indicates the overcharging on UK coach award tickets continued into 2016, when the airline acknowledged the issue again.
The agency took 11 years to reach this stage on the Borsetti complaint. Citing the significant time that had passed since the incident, the DOT determined that enforcement action was not warranted, View from the Wing reported.
A Broader Pattern of Overcharge Disputes
This refund is separate from an earlier matter in which American refunded improperly collected fuel surcharges on British Airways Hong Kong award tickets. Both cases involved charges that ran against the customer.
Borsetti has a track record of consumer aviation disputes. His actions led American to publish its full fare rules online.
He also holds a current complaint with the DOT over the airline’s policy of downgrading passengers while returning only partial credit for the fare difference.
He is named in the DOT order approving the American-Qantas joint venture, and he successfully pushed United to return transferred points after the carrier displayed award space that could not be booked.
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