SIA makes U-turn on credit card booking fee

No reason was given for the about-turn by SIA, but it comes after customers and netizens had expressed unhappiness over the move on social media.
No reason was given for the about-turn by SIA, but it comes after customers and netizens had expressed unhappiness over the move on social media.ST PHOTO: LIM YAOHUI

It had informed agents a day earlier of extra charge on payments for Economy Lite tickets

Singapore Airlines (SIA) has decided not to introduce a credit card fee for tickets issued in Singapore, a day after it said it would.

In an unexpected move, the airline has issued a circular to all its sales agents and other business partners to inform them of the latest development.

The circular, a copy of which was obtained by The Straits Times, went out yesterday morning. SIA wrote: "Following a further review, Singapore Airlines will not be proceeding with the implementation of the CCSF (credit card service fee)."

No further reason was given for the decision.

The airline first informed its sales agents about the proposed fee on Wednesday.

At the time, SIA said that with effect from Jan 20, a credit card service fee of 1.3 per cent of the total fare amount, capped at $50, would be introduced for flights departing from Singapore.

It would affect only those who purchase discounted tickets - Economy Lite.

MAKES FARES HARDER TO COMPARE

It seems that every airline wants to become a low-cost carrier in the economy cabin... Fares should be all inclusive. Adding surcharges left, right and centre just makes airfares harder to compare and unnecessarily complicated. Such credit card surcharges go against the Government's push for a cashless society.

AVIATION LECTURER AND AVID TRAVELLER GARY HO

SIA first introduced credit card fees in 2016. Currently, they apply to routes departing from Australia, Belgium, the Netherlands, New Zealand and the United Kingdom.

The charge does not apply to debit cards.

Extra booking and other fees are common among budget carriers, including Scoot, AirAsia and Jetstar, and some full-service airlines, including Qantas, British Airways, Air France and Emirates.

Qantas, for example, has a 1.23 per cent charge for all flights out of Australia, capped at A$11 (S$11.50) for domestic and A$70 for international services. British Airways imposes a 1 per cent credit card fee, capped at £20 (S$36) per ticket.

SIA's earlier decision to introduce a credit card fee for Singapore flights had upset some customers and netizens, many of whom expressed their unhappiness on social media.

Aviation lecturer and avid traveller Gary Ho said: "It seems that every airline wants to become a low-cost carrier in the economy cabin.

"Fares should be all inclusive. Adding surcharges left, right and centre just makes airfares harder to compare and unnecessarily complicated. Such credit card surcharges go against the Government's push for a cashless society," he said.

Part-time tutor Desmond Lee, 34, said: "I don't understand why SIA needed to do this, even if other carriers are. It reflects poorly on the airline's status as a premium airline."

The Consumers Association of Singapore welcomes SIA's U-turn, said its executive director Loy York Jiun.

He noted, though, that as with all other business costs, the costs that merchants absorb when consumers use credit cards to make payments "would eventually be reflected in the prices consumers have to pay in one form or another".

Mr Loy said: "Ultimately, it is the final price that consumers have to pay that matters, as compared to the value they receive."

Analysts have taken a different view, pointing out that amid tough operating conditions and competition that have impacted profits and yields, it is important for SIA to generate higher revenues.

The fact is that airfares are at their lowest in about a decade and have not kept pace with inflation, they added.

SEE HOME: SIA risks hurting its premium brand

A version of this article appeared in the print edition of The Straits Times on January 05, 2018, with the headline 'SIA makes U-turn on credit card booking fee'. Print Edition | Subscribe