Australian airlines booking & service fees found to be misleading

Almost two years after the Australian Competition and Consumer Commission (ACCC) took Jetstar and Virgin to court over what is known as “drip pricing”, a practice where an online purchaser pays more (sometimes considerably more) than the price offered because of various add-ons. This means that the true cost of a purchase is not clear until the final stages of a transaction.

Booking and service fees for online purchases were the focus of the ACCC’s action where advertisements related to offers of very low airfares, making the booking fees a large percentage of the final cost. In Jetstar’s case the fee was $8.50 per passenger for a domestic flight for credit card bookings, while Virgin charged $7.70.

…The billing fee was right towards the end of the process and the judge found that was false and misleading conduct. ACCC chairman Rod Sims

In making judgement, Justice Lindsay Foster found that both airlines had contravened the Australian Consumer Law particularly on mobile sites, but stopped short of finding contraventions in a number of other ACCC’s complaints.

Both airlines have issued statements regarding the ruling, with Jetstar saying that “have progressively made changes to make it clearer at every step of the booking process what charges may apply”. Virgin Australia noted that the court found against them in only one of six charges “related to the disclosure of the booking and service fee on Virgin Australia’s mobile website” and says that the company is “reviewing the judgment and considering its position on this aspect.”

Let the buyer beware

Despite the ruling, it is unlikely that the airlines will remove the fees, which they will likely include in the ‘fine print’. For example: “Fare includes surcharges and taxes only. Other additional fees may be applicable.” ** Some airlines also call these a ‘convenience fee’.

Consumers must also be aware that they need to look for check boxes for other charges that may be added (like luggage, seat selection, meals, a bus trip to the airport, charity donation etc) which are usually selected by default, and remove the tick if they don’t want the service.