The number of flights booked over the internet is rapidly increasing. Customers browse the net in search of the lowest airfares as more and more airlines make available online flight purchases to end consumers.
Providing air transport service users with complete and precise information on prices is the hallmark of consumer protection. A concern shared by all air transport end-users relates to price transparency. Fares typically determine a passenger’s purchase. Hidden charges, fine prints in advertising fares and added taxes or surcharges at the end of a purchase cause prejudice to consumers.
The need for airfares to be set out in a clear manner is at the heart of the EU regulation governing the pricing of air services within the EU. Pursuant to the 2008 regulation, the need to enable customers to compare effectively the prices for air services of different airlines is paramount. Therefore, the regulation makes it mandatory for the final price, inclusive of the applicable airfare as well as all taxes, charges and fees, to be indicated at all times to the prospective purchaser. Other optional price supplements must be communicated in a clear manner, and their acceptance by the customer must be based on an opt-in type of choice.
Optional price supplements must be indicated at the start of the booking process
Putting these rules into practice is not an easy task, particularly when airlines know that consumer-purchasing decisions are dictated by pricing. Indeed, a dispute arose at the end of 2008, between Air Berlin and the German Federal Union of Consumer Organisations and Associations. The latter challenged the way in which airfares were displayed in Air Berlin’s online booking system. The system was organised in such a way that, after selecting a date and a departure airport, the end-user finds all possible flight connections for the chosen date, including departure and arrival times as well as two fares for each flight.
However, the customer could figure out the final purchase price of the flight only after entering the necessary personal details. Consequently, this prevented customers from being able to compare final prices, as they would have left the site where prices for all connections were shown.
The union brought an action against Air Berlin to discontinue this practice. The line of defence put forward by Air Berlin was that the obligation imposed by the EU regulation to indicate the price at all times to the consumer did not require airlines to indicate the final price as early as the first time the prices of flights are shown but only after a particular flight has been selected and before the booking process is concluded.
The dispute reached the German Federal High Court, which requested a preliminary ruling from the Court of Justice of the European Union (CJEU). The Luxembourg Court considered that the practice adopted by Air Berlin did not satisfy the requirements of the EU legislation. It ruled that the purpose of having the final price displayed at all times is to enable the determination of the final price and the retention of that fixed final price at all times without changes, irrespective of the time at which it is shown.
Consequently, the CJEU held that, in the context of a computerised booking system, the final price to be paid must be indicated whenever the prices of air services are shown, including when they are shown for the first time, when the customer selects a particular flight, and when the contract is finally concluded.
Additionally, optional price supplements must be indicated at the start of the booking process so that the prospective customer can decide whether they wish to opt in for such service or not.
The Court further ruled that the obligation to indicate the final price at all times applies to all forms of publication of airfares. The final price must be indicated also for each air service in respect of which the fare is shown. Only in this manner can consumers effectively compare prices for air services.
jgrech@demarcoassociates.com
Josette Grech is adviser on EU law at Guido de Marco & Associates.