Airlines face grilling over ticket fees

Executives from Qantas and Virgin will be quizzed over what many customers consider to be steep credit card surcharges at an inquiry next week.

The Senate economics committee is investigating how loyalty and frequent flyer programs interact with credit cards, as well as the practice of surcharging for credit card payments.

Prime Minister Malcolm Turnbull last month announced a limit on merchants imposing surcharges that exceed the cost of accepting a card payment.

The move followed an inquiry by former banker David Murray and a public campaign led by consumer advocate Klaus Bartosch, who will also give evidence in Canberra on Monday.

Mr Bartosch believes airlines are among the worst offenders when it comes to credit card surcharges, also known as booking fees, and they should be banned altogether.

Qantas Frequent Flyer is the country's biggest loyalty program, with 10.8 million members and commercial deals with a number of credit card issuers.

However, Qantas says it has no control over how its partners price their credit cards.

Qantas said in its written submission to the inquiry that it imposed credit card surcharges "as a means of recovering a substantial part of its cost of card acceptance".

It charges $7 per passenger, per booking for domestic and trans-Tasman services and $30 for international services.

The single rate avoided unnecessary complexity.

Jetstar - which in Australia and NZ is wholly owned by Qantas but has various ownership arrangements for its other arms - took a different approach.

"Jetstar has a booking and service fee that is a market-based fee which is not linked to the cost of card acceptance and is avoidable by choosing from a range of fee-free payment options," Qantas government affairs executive Andrew Parker said.

Qantas says it's working with the Reserve Bank to "actively improve" payment options for customers.

Mr Bartosch said the proposed cap on surcharges could lead to more companies imposing them, because businesses would see it as the government encouraging their use.

The government should instead ban surcharges - which go by a range of names - and ensure that businesses fully disclose the final price of goods or services including any fees.

"These businesses and retailers have found a way to gouge additional cost and expenses and revenue out of consumers by disguising them as whatever they like," he told AAP.

He said consumers had been urged for decades to go cashless and were now being "stung" for having done so.