Global Economics

Brussels Seeks Clearer Airfare Pricing


The European Commission wants airline companies to advertise the full price of air tickets - including taxes and other costs - to shield consumers from being surprised by the final price at pay up time.

"We are going to oblige airlines to show full fares" said a commission spokesman on Tuesday (18 July).

According to Brussels' plan, the advertised price needs to include extra charges - like airport tax, credit card and booking fees and possible extra luggage or fuel charges - to make it easier for consumers to compare prices when bargain hunting for an air ticket.

The price transparency move is part of an overall proposal aimed at simplifying and merging three current aviation laws into one.

The plan also prohibits airline companies from charging passengers different prices for the same ticket based on where they live.

Air transport in Europe has increased significantly in the last 25 years, with a quarter more airlines and a doubling of routes in only ten years.

"The liberalisation of air transport is a European success: citizens enjoy more travel opportunities and lower fares than ever before," said EU transport commissioner Jacques Barrot, adding that consumers should be able to easily compare prices.

European consumer group BEUC welcomed the move. "There is always something new to charge," said Muriel Danis from BEUC who herself recently faced the issue of booking a ticket but ended up paying a price three times as high as the one she saw advertised.

"Before there were just airport taxes" she said adding that the current trend had opened up doors for unlimited amount of charges. "It's time to put an end to this."

The head of Ryanair, Michael O'Leary, said in a statement "Ryanair warmly welcomes any proposals that will increase the transparency of air fares for European passengers."

But one EU official said that Ryanair's current practice of advertising a one way air ticket for ??0.19 and underneath the price writing "excludes taxes, fees and charges" will be illegal if the proposal comes into force.

SELF-REGULATION. UK conservative MEP Syed Kamall spoke out against the proposed new legislation despite agreeing that it is misleading to advertise a flight at a low price and then add a plethora of supplements to it.

He said "The European Commission is right to be tackling this issue but it should put pressure on the industry to resolve it itself before it considers a cumbersome regulation."

"We should try to let the market sort this out before we go in all guns blazing with yet more red tape," he said in a statement.

The Association of European Airlines (AEA) said that the problem had arisen from the fierce price competition among airline companies that had come out of the liberalisation of air travel in the EU over the last 20 years.

"This particular aspect of the liberalisation may not be in the best interest of the consumer," said the AEA's David Henderson who added that the association welcomed the commission initiative "as long as everybody has to play by the same rules."

The proposal is expected to come into force in December 2007 if approved by the European Parliament and the 25 EU governments.


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