Class Action Claims Alaska Airlines Receives Undisclosed Kickbacks for Selling Travel Insurance

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Alaska Airlines, Inc. has been hit with a proposed class action lawsuit that alleges the airline receives unlawful kickbacks on the sale of travel insurance. Echoing claims in lawsuits filed against Jet Blue and Delta last year, the suit alleges that Alaska Airlines conceals from online customers that it receives a commission whenever it sells travel insurance through “preferred provider” Allianz Global Assistance (AGA).

According to the lawsuit out of California, customers looking to purchase airline tickets from the Alaska Airlines website must choose whether to add travel insurance offered by AGA before confirming their purchase. The airline, the case argues, represents that it is merely acting as an agent for the customer, and is “serving no role beyond communicating AGA’s separate offer of the travel insurance products.” In fact, the airline includes the insurance purchase price as a separate line item on customers’ bills and assures that Alaska itself is not “providing or underwriting any travel insurance product,” the lawsuit says.

The suit argues that in reality, the price of AGA’s travel insurance is not a pass-through cost as represented by Alaska but is inflated to include an undisclosed commission paid to the airline.

“Accordingly, consumers like Plaintiff pay materially more for the travel insurance product than they otherwise should have,” the complaint reads, “since AGA pays a significant portion of the premium to Alaska as undisclosed remuneration.”

The lawsuit claims Alaska has breached its fiduciary duty to customers by failing to disclose the payments it received from AGA for the sale of insurance products.