10 December 2009
Mr. Petri Schaaf
Vice President, Global Sales
Dear Mr. Schaaf,
We read with great interest your comments yesterday in Business Travel News regarding credit card surcharges. In particular, your airline is contemplating surcharging for payments made through Finnair’s merchant agreement, an equitable, time-tested and efficient process for airlines and their customers. These credit card costs are already baked into the price of tickets purchased by corporate buyers of your airline’s services. As such, surcharging will be asking your very best customers to pay for this cost twice. This, of course, is unacceptable.
Regarding Finnair’s ability to surcharge for credit card costs you state:"In general, as long as there is a legal and technical possibility, we will consider it." Have you forgotten about your commercial relationships; the interests and concerns of your very best customers? Individual travelers are indeed customers, however, corporate travel departments are your business partners. There should be a level of respect for and collaboration with corporate customers and the travel management companies that service them that is clearly missing from your statement.
Finally you posit: "Airlines are one of the few industries where the merchant does not pay the credit card fee." The counterfactual is that in most industries, the merchant takes the financial risk for and legal control of the product inventory it has acquired for resale. As part of the risk, the merchant has the right to mark up the product and earn a profit. In that common scenario, it is appropriate for the merchant to absorb the cost of credit, and pass it along to the customer in the final price of the product. Travel agents in contrast, in the vast majority of cases, are only facilitators between willing airline suppliers and customers. Agents do not legally own or control the product or the delivery of an airline’s services and, as such, should not be paying for the costs of credit.
We recognise the need for Finnair to compete in its own markets and that competitive moves by other airlines to “test” reaction to credit card surcharging may have prompted its consideration of this onerous customer policy. However, if airlines, including yours, expect to generate corporate managed-travel community support for unbundling and merchandizing, there must be sincere collaboration and respect shown for the interests of business partners and distribution system stakeholders.
We hope you carefully consider any policies that inappropriately shift costs to your customers.
Chairman, Business Travel Coalition
Chief Executive, Institute of Travel & Meetings
C. Jukka Hienonen, Finnair Chief Executive Officer