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Budget airlines break new rules on opt-in website pricing

Easyjet and Ryanair investigated

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Budget airlines Ryanair and easyJet are failing to comply with European laws that ban pre-checked boxes on websites that sell flight tickets. New rules provide that optional price supplements must be accepted on an 'opt-in' basis.

The European Commission announced this week that it is stepping up pressure on airlines to ensure websites selling tickets fully comply with EU laws that demand pricing transparency.

Commissioners have written to airline representatives setting out 26 consumer rights which all websites selling air tickets must respect. The letter requests that members of the airline associations amend all websites to ensure they fully comply with the listed obligations.

"My message to the airline industry is very clear," said Consumer Commissioner Meglena Kuneva. "Full compliance with EU law is an obligation, not an option."

The Commission began investigating travel websites in September 2007. It claims that 60 per cent of websites that it found to have irregularities have now been corrected. "But there are still too many consumer complaints about hidden charges and fees, and too many cases where pricing is not clear," Kuneva said.

The Commissioners' letter cites various laws that apply to the sale of air tickets, including the Directive on unfair commercial practices, the Directive on unfair terms in consumer contracts and a Regulation on air carrier liability. It also cites a new Regulation (pdf) on common rules for the operation of air services in the Community, which came into force on November 1.

The Commission did not name specific websites found to be in breach of the new Air Services Regulation, but OUT-LAW's own review of two leading budget airline sites today found evidence that the Regulation is being breached.

The Regulation provides that on websites selling flight tickets: "Optional price supplements shall be communicated in a clear, transparent and unambiguous way at the start of any booking process and their acceptance by the customer shall be on an ‘opt-in’ basis."

In OUT-LAW's test, the online booking process for Ryanair.com added a £6 charge for priority boarding, unless the option was actively unselected. It also added £8.38 for insurance for a domestic return flight, unless the customer unselected that option. On easyJet's website, we had to unselect a £6 each-way fee for 'hold baggage' and a £9.25 fee for insurance for a domestic flight.

The Regulation also states that: "The final price to be paid shall at all times be indicated and shall include the applicable air fare or air rate as well as all applicable taxes, and charges, surcharges and fees which are unavoidable and foreseeable at the time of publication."

Ryanair and easyJet add additional fees for most card payments that are not obvious at all times during each company's booking process. However, they appear to comply with this provision of the Regulation by excluding holders of Visa Electron cards from the fees.

Ryanair charges most users of its website a 'handling fee' of £4 each way. The fee is waived for those paying by Visa Electron card, which Ryanair presents as 'a special offer' for 'a limited period only'.

Visa Electron cards are aimed at, though not restricted to, people under 18 years of age. Payment association Apacs told OUT-LAW that they account for 5.8 million of the 145 million credit and debit cards in the UK.

Ryanair allows children aged 14 to 17 to travel alone – but they cannot check-in online. Ryanair charges an additional fee of £4 per passenger for each airport check-in.

EasyJet also levies a 'booking fee' on card payments except those made by Visa Electron or the French debit card Carte Bleue. Its terms do not allow children to book flights, though. "You have to be at least 18 years old to be the lead booker," they say.

A spokesman for Ryanair told OUT-LAW that the company is reviewing its site to ensure compliance on fare transparency.

"Ryanair has always welcomed and complied with EU regulations and will, if necessary following a complete review of the new provisions, move to make any changes required to ensure continued compliance," he said.

EasyJet told OUT-LAW that it believes it complies with the laws, though it may change elements of its booking process.

"The European Commission has not addressed easyJet in relation to failing to comply with EU rules on transport pricing," said a spokesman. "We believe that this is referring to traditional carriers who charge ‘kerosene’ surcharges and other booking fees."

"As for the question regarding optional price supplements, we believe that we are currently compliant; however, the matter is being looked at again with a view to possibly changing elements of the booking process in the New Year," he said.

The Commission said it will publish a compliance report in May 2009.

Copyright © 2008, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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