$27 Million Class Action Payout from British Airways

British Airways PLC has agreed to settle a class action lawsuit alleging it charged fuel surcharges on certain flights that breached its contract with members of its Executive Club, a frequent flyer program.

If you are a U.S. resident and a member of the airline’s Executive Club, you redeemed frequent flyer miles for an award ticket between Nov. 9, 2006 and April 17, 2013, and you paid a British Airways-imposed fuel surcharge, you may be entitled to a cash payment or frequent flyer points from the British Airways class action settlement.

Depending on which payout Class Members choose, the BA settlement is valued at $63 million for the frequent flyer option and a maximum of $27 million under the cash option.

The British Airways class action lawsuit was initially filed by a group of Executive Club Members on Nov. 9, 2012. They claim the airline breached its contract with members of its frequent flyer program by imposing a fuel surcharge that was not reasonably related to fuel costs.

Under the terms of the frequent flyer contract, members of the British Airways Executive Club program could accumulate frequent flyer points called “Avios” in exchange for flying with British Airways or by booking hotels or renting vehicles from certain companies.

The contract reportedly did not define the term “fuel surcharge,” but English law defines the term as a supplemental charge that is based upon or reasonably related to the cost of fuel. According to the fuel surcharge class action lawsuit, British Airways based its fuel surcharges on the cost of fuel in an arbitrary year (2003-2004), which is allegedly impermissible under English law.

British Airways denies any wrongdoing but agreed to settle the fuel surcharge class action lawsuit to avoid the burden and expense of ongoing litigation. The British Airways class action settlement was preliminarily approved on May 29, 2018.

Under the terms of the proposed British Airways settlement, eligible Class Members may be entitled to receive Avios if they are current Executive Club Members or they may elect to receive a cash payment, which is available to active and former Executive Club Members. If all eligible Class Members choose the cash option, British Airways would provide up to $27,125,000 in payments.