European Commission Proposes Air Fare Transparency Rules
July 19, 2006
The plans would do away with a common practice in the industry of touting air fares decoupled from a host of other hidden fees, taxes and other extra charges that are frequently added on only when the would-be passenger has made it to the payment phase.
Additional charges added on to air fares often include fuel surcharges, insurance and various taxes and can sometimes double the price. For passengers using the plethora of cheap airlines in Europe, it's a problem which is all too familiar.
According to the European Commission, the EU's executive arm, the liberalization of air transport is one of Europe's bigger success stories. It is now cheaper than ever to travel by air, and more and more Europeans can afford it.
Small wonder then that the Brussels-based Commission wants to stop unscrupulous airlines from deceiving consumers with misleading advertisements.
An airline may offer to fly its passengers from Berlin to London for one cent but it is highly unlikely that anyone will get airborne for that modest sum. The airline will charge extra for luggage, there'll be a fuel surcharge and various other taxes.
Advertised prices soon increase
The price will have increased by at least 40 euros before you even get to the departure lounge, and sometimes the cheapest of flights may turn out to be as expensive as a regular journey.
The Commission wants to change that by forcing airlines to display their air fares including all the extra charges, enabling the consumer to decide quickly and easily whether they have spotted a bargain. Air passengers were failing to reap the benefits of increasing competition on European routes in recent years because of the practice, the Commission said.
"Citizens must enjoy the benefits of the (EU) single market and have the possibility for more choice and quality," EU Transport Commissioner Jacques Barrot said in a statement. "They must be able to easily compare fares between airlines."
Airlines welcome EU plans
Ryanair, one of the airlines which was specifically named by the Commission of being guilty of the practice, released a statement saying it welcomed the Commission's proposals to make air fares more transparent.
"All passengers who book and fly with Ryanair already receive a full breakdown of fares, taxes and charges before they are allowed to make a booking," it said in a statement.
EU officials said a Ryanair advert on its Web site selling 4 million seats from 19 pence excluding taxes, fees and charges, would in principle not be allowed under the new rules because the advertised price was not the final cost.
"The fare shown or price shown should be the price the passenger pays," Barrot's spokesman, Stefaan de Rynck, told a Brussels press conference. He added that the problem of misleading advertising was not limited to the low-fare sector and was prevalent throughout the industry.
Plans will punish offenders
The plans have yet to be approved by EU transport ministers and the European Parliament. Only when they have been agreed upon by the bureaucrats in Brussels can they go into effect.
They would also give the Commission authority to revoke or suspend airlines' licenses if they did not follow EU rules for operating, such as safety or financial standards.
The plans are part of a broader aviation package which aims to streamline the regulations governing how airlines operate, the financial conditions they have to meet, and also how they are monitored by member states.