Out-Law / Your Daily Need-To-Know
The Office of Fair Trading has ordered airlines to clean up their pricing policies by including all charges when they advertise fares. The order will spell the end of advertised fares of as little as one penny.
The OFT warned airlines in February that they must change their pricing and online order systems to quote consumers the actual cost of flying and not the cost minus non-optional fees such as taxes and surcharges.
The Office has now taken action against 13 airlines which have now changed their policies, it said. Those airlines include easyJet, bmibaby and Globespan.
Irish carriers Aer Lingus and Ryanair both said that they could not change their online booking systems immediately, but promised to do so and have changed their website home pages to reflect the full cost of flying.
The success of no-frills low cost airlines such as Ryanair has prompted fierce competition in the airline industry. Combined with the direct booking model made possible by the internet, the competition has driven airlines to advertise lower and lower prices, with fares appearing to fall as low as one penny.
Consumers have found, though, that airport charges, airline surcharges, taxes and fuel levies have pushed fares far higher than the advertised sums. The OFT became involved because these charges are not optional and should therefore be considered part of the price. It can obtain court orders against traders it believes engage in misleading pricing.
"The OFT is committed to ensure that consumers are not mislead by advertised prices that bear little relation to actual prices," said Sean Williams, executive director of the OFT. "Misleading pricing not only undermines consumer confidence but also distorts competition and we will enforce the law enthusiastically where we find that consumers have been misled."
Trade body the Association of British Travel Agents has also taken action against its members. The ABTA Code of Conduct, which is binding on its members, requires that all fixed, non-optional costs be included in a price.
The OFT said that the following airlines have changed their websites to include fixed, non-optional costs in pricing: easyJet, bmibaby, Flybe, Thomsonfly, flythomascook (a trading name of Thomas Cook Tour Operations Limited), Monarch, Jet2, Globespan, Wizz Air, Sky Europe and German Wings.
