Taxes inconsistent when trying to use Velocity points

[Traveller4006]

Last week I spent days trying to get an answer to a sensible question about the amount of taxes/charges to be charged on a HKG-LHR Return trip using Velocity points.

VIRGIN ATLANTIC website quotes the following taxes/charges for a regular revenue ticket:
SYD-HKG return $267.06
SYD-LHR return $516.66
HKG-LHR return HK2631 (approx $380)

VELOCITY website quotes the following taxes/charges for reward tickets:
SYD-HKG return $ $196.10
SYD-LHR return $ $407.10
HKG-LHR return - is not listed

Therefore I needed to speak to the Velocity call centre (a long story in itself). The answer I finally got was $730.

Why are the taxes/charges for a reward ticket for HKG-LHR return so high compared to the regular revenue taxes/charges when the other 2 city pairs taxes/charges about the same?

Have spent 5 days on phone to Velocity, escalated the issue to Virgin Atlantic and no one seems to know or care so am unable/unwilling to complete my reservation with taxes/charges that are so high and out of proportion to the other taxes/charges.

 

[Velocity Frequent Flyer]

Why are the taxes/charges for a reward ticket for HKG-LHR return so high compared to the regular revenue taxes/charges when the other 2 city pairs taxes/charges about the same?

When you make a booking with Virgin Atlantic using your Velocity Rewards Points, the booking is created in a Global Distribution System (GDS). The taxes applicable to each route are loaded and managed by the operating airline.​

As Velocity was responsible to create this booking for you, they in turn would be responsible to pay the operating airline all the fees and charges as presented by the GDS.​

Velocity have contacted the Virgin Atlantic call centre and they confirmed the taxes to be correct as per the GDS. ​

We also advised them of a potential error with their website which we know they are investigating.​

We are sorry that we could not honour the fees and taxes that you were advised via the Virgin Atlantic website at this time however we are looking into this with them and will advise any change in the outcome above.​

 

[Flashback]

When you make a booking with Virgin Atlantic using your Velocity Rewards Points, the booking is created in a Global Distribution System (GDS). The taxes applicable to each route are loaded and managed by the operating airline.​

As Velocity was responsible to create this booking for you, they in turn would be responsible to pay the operating airline all the fees and charges as presented by the GDS.​

Velocity have contacted the Virgin Atlantic call centre and they confirmed the taxes to be correct as per the GDS. ​

We also advised them of a potential error with their website which we know they are investigating.​

We are sorry that we could not honour the fees and taxes that you were advised via the Virgin Atlantic website at this time however we are looking into this with them and will advise any change in the outcome above.​

Thanks for the info and welcome to AFF. Are you a representative of DJ/Velocity Rewards similar to what CrazyDave98 is?

 

[crazydave98]

Thanks for the info and welcome to AFF. Are you a representative of DJ/Velocity Rewards similar to what CrazyDave98 is?

Yes and No. Velocity Rewards is the formal presence of the Velocity program on this site and is driven by a member of Velocity staff who will focus on issues specific to Velocity. I have a less formal role here and a broader role within Virgin Blue that lets me respond to more general issues raised here.
cheers
CrazyDave98

 

[kamchatsky]

Welcome to AFF! Good to see some official online presence here. I am sure we will have a lot of questions for you

 

[Velocity Frequent Flyer]

Thanks for the info and welcome to AFF. Are you a representative of DJ/Velocity Rewards similar to what CrazyDave98 is?

Thanks for the welcome!
We'll try to get to all relevant questions and queries regarding Velocity, and as CrazyDave98, says, leave any general chat to him.

We had Virgin Atlantic look into the issue of the tax discrepancy between the GDS and the website and found that both are correct.

Tickets that are sold and issued in HKG at the moment have a lower YQ tax than Australia. As the passenger is booking and paying for the ticket in Australia then the Australian YQ is applicable.

When the passenger looks on-line as the flight is ex HKG it automatically defaults to HKG and is priced in local currency. Unfortunately there is nothing we can do to allow the passenger to pay HKG taxes only, even if he were to book direct with VS SYD we would have to charge the applicable taxes for Australia.

Hope that clears it up!

​

 

[Flashback]

Thanks for the welcome!
We'll try to get to all relevant questions and queries regarding Velocity, and as CrazyDave98, says, leave any general chat to him.

We had Virgin Atlantic look into the issue of the tax discrepancy between the GDS and the website and found that both are correct.

Tickets that are sold and issued in HKG at the moment have a lower YQ tax than Australia. As the passenger is booking and paying for the ticket in Australia then the Australian YQ is applicable.

When the passenger looks on-line as the flight is ex HKG it automatically defaults to HKG and is priced in local currency. Unfortunately there is nothing we can do to allow the passenger to pay HKG taxes only, even if he were to book direct with VS SYD we would have to charge the applicable taxes for Australia.

Hope that clears it up!

​

Thanks for the clarification and great to have you on board, welcome!

 

[drron]

Thanks for the welcome!
We'll try to get to all relevant questions and queries regarding Velocity, and as CrazyDave98, says, leave any general chat to him.

We had Virgin Atlantic look into the issue of the tax discrepancy between the GDS and the website and found that both are correct.

Tickets that are sold and issued in HKG at the moment have a lower YQ tax than Australia. As the passenger is booking and paying for the ticket in Australia then the Australian YQ is applicable. ​

When the passenger looks on-line as the flight is ex HKG it automatically defaults to HKG and is priced in local currency. Unfortunately there is nothing we can do to allow the passenger to pay HKG taxes only, even if he were to book direct with VS SYD we would have to charge the applicable taxes for Australia.​

Hope that clears it up!​

Well it is an explanation re the discrepancy on the quote from HKG but why does the SYD-HKG-LHR taxes in Australia come out lower than HKG-LHR booked in Australia?That does seem a little strange seeing the SYD-LHR ticket includes the HKG-LHR sector.
Edit-Sorry a great welcome to AFF.I am slowly accumulating velocity points and eventually may well call on your services.

 

[NM]

Well it is an explanation re the discrepancy on the quote from HKG but why does the SYD-HKG-LHR taxes in Australia come out lower than HKG-LHR booked in Australia?That does seem a little strange seeing the SYD-LHR ticket includes the HKG-LHR sector.
Edit-Sorry a great welcome to AFF.I am slowly accumulating velocity points and eventually may well call on your services.

Isn't it obvious that it costs a lot more money (read fuel surcharges) to transport the fuel from Australia (point of sale) to HKG for the HKG-LHR flight . Its much cheaper when they purchase the fuel for HKG-LHR in HKG.

 

[drron]

Isn't it obvious that it costs a lot more money (read fuel surcharges) to transport the fuel from Australia (point of sale) to HKG for the HKG-LHR flight . Its much cheaper when they purchase the fuel for HKG-LHR in HKG.

I bow to your superior knowledge.

 

[Traveller4006]

Thanks for the welcome!
We'll try to get to all relevant questions and queries regarding Velocity, and as CrazyDave98, says, leave any general chat to him.

We had Virgin Atlantic look into the issue of the tax discrepancy between the GDS and the website and found that both are correct.

Tickets that are sold and issued in HKG at the moment have a lower YQ tax than Australia. As the passenger is booking and paying for the ticket in Australia then the Australian YQ is applicable. ​

When the passenger looks on-line as the flight is ex HKG it automatically defaults to HKG and is priced in local currency. Unfortunately there is nothing we can do to allow the passenger to pay HKG taxes only, even if he were to book direct with VS SYD we would have to charge the applicable taxes for Australia.​

Hope that clears it up!​

No that does NOT clear it up and you are trying to confuse this issue on purpose !

If I booked a revenue ticket using the virgin atlantic website I will be charged in HKG dollars exactly the amount as per quoted on the website including the taxes of HK2631 (approx $380).

When I call Velocity to try and book my "reward" ticket I am diverted to the Velocity contact centre which is very definitely located in Malaysia. Last time I looked at a map Malaysia was not inside Australia.

The simple fact remains that the taxes/charges quoted for a reward ticket from SYD-LHR return (which must go via HKG) are about $400, and the taxes/charges quoted for a reward ticket from SYD-HKG are about $196, BUT the taxes/charges quoted for a reward ticket from HKG-LHR return are $730.

I suggest that you get your abacus out again and take another look, and then come back to me with a sensible answer that does not obfuscate the issue.

 

[medhead]

When I call Velocity to try and book my "reward" ticket I am diverted to the Velocity contact centre which is very definitely located in Malaysia. Last time I looked at a map Malaysia was not inside Australia.

I agree the the numbers don't seem to stack up. However, with the greatest respect I would say that the location of the call center is irrelevant when it comes to taxation in Australia. I looked into this a little bit and as far as I understand, the tax law determines location based on were you are and also the location of the selling company. That they use an agent to take your money in another country doesn't change the fact that you purchased in Australia. This is the reason that companies like apple have to charge GST on Internet order under $900 even through they are not australian, the order is processed offshore and the item is sourced offshore. I know this isn't the full story but I believe it is generally correct.

Also the answer as I read it is that that is the amount that VA are charging Velocity for the ticket. It is frustrating but I'm not sure what more velocity can do, if VA says the taxes are correct.

 

[Velocity Frequent Flyer]

Thank you medhead for your assistance and explanation surrounding Australian Taxation.​

​

Indeed Velocity Rewards are charged the original quoted amount of taxes for fares sold via an Australian company. Similarly if you called the Virgin Atlantic Call Centre in Australia they could only sell you a ticket from Hong Kong to London and return using the same tax price.​

​

Regretfully Velocity Rewards cannot offer Virgin Atlantic internet tax rates from a Hong Kong Sales office.​

 

[Traveller4006]

Also the answer as I read it is that that is the amount that VA are charging Velocity for the ticket. It is frustrating but I'm not sure what more velocity can do, if VA says the taxes are correct.

If it is so important to Velocity to do just as Virgin Atlantic tells them to then why does Velocity's own website not include the relevant taxes/charges on their website? look at Velocitys own FAQ and you will see that SYD-LHR return and SYD-HKG return are listed but not the other leg of that journey HKG-LHR. I propose that the reason for this is that because the taxes/charges are not in proportion to the other two it looks glaringly strange to list them.


What I would like to receive, but which Velocity and Virgin Atlantic have refused to do is to give me a breakdown of the taxes/charges for each of the three itineraries SYD-HKG return, SYD-LHR return and HKG-LHR return so that I can see why they differ so.

I am absolutely convinced that the taxes/charges from HKG-LHR return for a reward ticket on Virgina Atlantic using Velocity Points includes an extra revenue amount over and above the taxes/charges that are being charged to revenue passengers and that this additional charge is being charged for the privilege of using my Velocity points, which I have earned as a member of their loyalty program, and would now like to use for my award ticket is approximately AUD $350.

Velocity and Virgin Atlantic, I invite you to prove me wrong.

 

[Traveller4006]

Similarly if you called the Virgin Atlantic Call Centre in Australia they could only sell you a ticket from Hong Kong to London and return using the same tax price.



Regretfully Velocity Rewards cannot offer Virgin Atlantic internet tax rates from a Hong Kong Sales office.​

Irrelevant - we are not talking about a revenue ticket.

I was going to book this itinerary as a revenue fare I would not call the Virgin Atlantic call centre, I would use the internet and their is nothing you could do to stop me.

 

[NM]

The real taxes will be the same if "purchased" in Australia or Hong Kong, only adjusted for exchange rates.

Its the airline imposed surcharges (such as YQ Fuel Fines) that vary most depending on the point of sale. These are not taxes and are imposed by the airline issuing the ticket based on whatever rules they wish to impose. The exception here is that fuel surcharged for flights to/from Hong Kong are fixed by the Hong Kong government (at least they were last time I checked, but could have changed).

Note that I stated the fuel fines are set by the airline issuing the ticket. They are collected by the airline issuing the ticket and are not required to be passed to the operating airline. So, for example, if purchasing a ticket from Qantas that includes a BA segment say LHR-CDG, QF will impose a fuel fine (YQ surcharge) for the BA segment and the amount the charge may vary depending on where the ticket was purchased/issued.

According to the Hong Kong Government Civil Aviation Department (CAD) the approved fuel surcharge for Virgin Atlantic flights to and from Hong Kong as as 1st August 2010 is HKD505 (the same as Qantas flights). This amount is set by the CAD and is independent of the point of sale of the ticket.

So YQ for SYD-HKG-SYD will be HK$505 each way or approx A$150 for the return journey. HKG-LHR-HKG will be the same. I don't know the VS fuel surcharges rate foe SYD-LHR-SYD, but for Qantas the YQ for a ticket issued as SYD-LHR-SYD would be A$95 each way if issued in Australia and US$150 each way if issued outside Australia.

The fact that a SYD-LHR-SYD journey transits HKG is irrelevant as the airlines will calculate YQ fuel fines based on the journey and not the individual sectors making up the journey. So you pay the fuel fine for SYD-LHR and LHR-SYD and not for SYD-HKG + HKG-LHR etc. But add a stopover in HKG and the HK CAD rates apply for the flight to and from HKG.

So then VS should be charging he same YQ for SYD-HKG-SYD as for HKG-LHR-HKG and should be HK$505 for each flight to or from HKG and independent of the point of ticket sale/issue. That implies to me that the variation in "taxes" quoted is not due to YQ variations.

"Taxes" for an award ticket HKG-LHR-HKG should include the following:

HK Air Passenger Departure Tax = HK$120
HK Airport Security Service Charge = HK$33
GB United Kingdom Air Passenger Duty (International) = GBP50 (or GBP100 if not in economy class)
YQ Fuel Surcharge (defined by HK CAD) = HK$505 x 2

None of these are dependent on the point of sale of the ticket.

Making a total of around A$270 for economy or A$360 for premium classes. So if VS is calculating the "taxes" as A$730, I think it is quite acceptable to ask them for a breakdown of that number or the exchange rates they used to covert to A$.

 

[medhead]

If it is so important to Velocity to do just as Virgin Atlantic tells them to then why does Velocity's own website not include the relevant taxes/charges on their website?

I'm not sure how you get this idea that velocity are doing what VA tell them, from my reply. That is not what I said at all. The fact remains that these are 2 separate companies. To provide you with the flight one of those companies charges the other company the taxes involved. VA are charging that amount to velocity. Velocity are on charging that cost to you. The reason they do this is because if they didn't velocity would lose money. That is just how business works.

You might think the number is wrong or that it includes some other charges. And I agree it is an anomaly. But I also believe that there is no reason to say that the taxes should add up either. Similar to LHR is there an extra departure tax that has to be paid at HKG that doesn't apply to a transit?

The fact remains that if VA tells velocity this is the charge and confirms that charge when questioned there is little point in getting upset.

 

[Velocity Frequent Flyer]

What I would like to receive, but which Velocity and Virgin Atlantic have refused to do is to give me a breakdown of the taxes/charges for each of the three itineraries SYD-HKG return, SYD-LHR return and HKG-LHR return so that I can see why they differ so.

As the responsibility of these taxes sits with the operating airline, please provide us with your contact details (via private message) and we will pass these on to Virgin Atlantic​

to look into this for you. They are the appropriate people to help with your enquiry.​

 

[Traveller4006]

Tickets that are sold and issued in HKG at the moment have a lower YQ tax than Australia. As the passenger is booking and paying for the ticket in Australia then the Australian YQ is applicable.

Here is the tax breakdown for SYD-LHR Return as quoted on Virgin Atlantic Airways website.

YQ Operating Airline Fuel & Insurance Surcharge - AUD 190.00
WY Australia International Passenger Service Charge - AUD 51.16
AU Australia Passenger Movement Charge - AUD 47.00
GB UK Air Passenger Duty - AUD 94.00
UK Passenger Service Charge - AUD 39.50


Here is the tax breakdown for HKG-LHR Return as quoted by Virgin Atlantic call centre here in Australia

YQ Operating Airline Fuel & Insurance Surcharge - AUD 458.60
WY Australia International Passenger Service Charge - AUD 51.16
HK Hong Kong Airport Passenger Departure Tax - AUD 17.50
GB UK Air Passenger Duty - AUD 174.50
UK Passenger Service Charge - AUD 40.10

Most of the difference is the Operating Airline Fuel & Insurance Surcharge.

From Sydney to London return is AUD 190
From Hong Kong to London return is AUD 458

Given that this is supposed to be based on actual fuel used, it strikes me as very strange indeed that for a trip that starts in Sydney, lands in Hong Kong, takes off again and lands in London the fuel is only $190. But a flight that starts in Hong Kong and lands in London and returns to Hong Kong is $458.

I also cant explain the difference in the UK Air Passenger Duty above.

 

[Traveller4006]

As the responsibility of these taxes sits with the operating airline, please provide us with your contact details (via private message) and we will pass these on to Virgin Atlantic


to look into this for you. They are the appropriate people to help with your enquiry.​

The Velocity call centre knows who I am. Just look for a Velocity member in Brisbane with PAX PAX PAX in it.