Jetstar, Tiger, Air NZ in trouble with ACCC over hidden fees

By danwarne, March 8 2011
Jetstar, Tiger, Air NZ in trouble with ACCC over hidden fees

Jetstar, Tiger Airways and Air New Zealand are among airlines that have been smacked by the ACCC over hidden fees that are now clearly illegal under the new Australian Consumer Law.

The regulator today said it had reached agreements with a number of airlines providing travel within and out of Australia, to stop hiding fees, and instead disclose the true cost of an airline ticket in a single price on their website.

In addition to Jetstar and Tiger, other airlines that were fingered included Air Asia X, Malaysia Airlines, Air New Zealand, LAN Airlines, American Airlines and Etihad were fingered for omitting to disclose all fees in their advertised fares.

“All airlines carrying on a business in Australia must advertise airfares that include all applicable fees and taxes,” said ACCC Chairman Graeme Samuel.

The airlines have been pushing the boundaries of the law for some time -- a blanket ban on 'component pricing' (where a base price is advertised but other compulsory fees apply later) has existed since May 2009.

The ACCC warned the airlines in January that the new Australian Consumer Law, which replaced the Trade Practices Act 1974, gave it strong enforcement powers, with penalties of up to $1.1million for breaches.

At the time, the ACCC said it was watching airlines' behaviour on some specific points, including overbooking of flights and policies around denying ticketholders boarding, the availability and processing of refunds, airlines' attempts to limit their liability, and time limits imposed by airlines on customer claims.

The ACCC said this time, the fees being illegally omitted from advertising included the many hundreds of dollars of compulsory levies, duties and taxes charged on international air tickets.

"They were advertising airfare prices, mainly for international fares, and in most cases they advertised just the base price, not the mandatory duties, fees and government taxes. It wasn't until a couple of steps further down the track until you saw them," a spokesperson told Australian Business Traveller.

Tiger Airways has been cunning in its approach of adding new categories of fees that travellers simply wouldn't expect to be additional services. For example, checking in at the airport (rather than online) costs $10 per passenger, each way.

Tiger also charges a seat selection fee of up to $10 each way, even for normal seats on the plane, otherwise it threatens passengers booked on the same itinerary might be seated in different parts of the plane.

It also charges a 'convenience fee' for any payment method except Australian MasterCard Debit cards, of $7.20.

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