Airlines Virgin and Jetstar are being taken to court by the Australian Competition and Consumer Commission for ‘drip pricing‘ – increasing the price of a headline fare by mostly unavoidable increments, such as credit card or PayPal booking fees.
“This can result in consumers paying a higher price than the advertised price, or spending more than they realise,” the ACCC said.
The ACCC alleges that “Jetstar and Virgin each made representations on their websites and mobile sites that certain domestic airfares were available for purchase at specific prices, when in fact those prices were only available if payment was made using particular methods.
“In relation to specific advertised airfares, the ACCC alleges that each airline failed to adequately disclose an additional Booking and Service Fee.
- “Jetstar charged a Booking and Service Fee of $8.50 per passenger, per domestic flight if payment was made by a credit card (other than a Jetstar branded credit card) or PayPal; and
- “Virgin charged a Booking and Service Fee of $7.70 per passenger, per booking if payment was made by a credit or debit card or PayPal.
“The ACCC alleges that these fees applied to the substantial majority of online bookings and should have been disclosed upfront and prominently with or within headline prices.”
It is seeking pecuniary penalties, declarations, injunctions, corrective advertising and costs against each airline. Federal Court hearings begin in August.