The Saga of our attempt to recover unused airport tax

Saga refused to refund our tax when we had to cancel our trip to Cuba

As a result of illness we were unable to take a holiday to Cuba booked with Saga. Our insurance company said that the airport taxes totalling £162 had to be reclaimed from the airline, but the airline referred us to Saga. Saga claimed that as we had purchased a package holiday, it could not separate the contracts for the holiday and the flights – and therefore no refund was due. SG, Nottingham

Many insurers refuse in their small print to reimburse policyholders for the tax element of unused tickets, even though in the case of budget airlines this can make up the greater part of the ticket price. Instead they direct customers to apply to the airline.

Surprisingly, though, airlines are under no legal obligation to refund taxes, despite the fact that the money does not have to be passed on to the government if tickets are unused. Airlines that do return the tax often charge such high administration fees that the gain is cancelled out. The tour operator doesn’t come into it as it is merely a broker.

The Financial Ombudsman Service says it expects insurers to pay out if the airline refuses, and will consider complaints from spurned policyholders.

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