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EU's top court issues ruling that'll change how Ryanair and other airlines advertise air fares

An Italian watchdog had claimed Ryanair’s practices misled consumers and distorted competition with other airlines.

Image: Sam Boal/Rollingnews.ie

THE EU’s TOP court has issued a ruling which will change how Ryanair and some other airlines advertise their air fares.

The Court of Justice of the EU has directed that airlines must indicate the fees charged for paying by credit card as well as the VAT on domestic flights from the first time their prices are published on the internet.

The CJEU said airlines must also indicate any check-in fees payable at the start of a booking process where no method of checking-in free of charge is offered as an alternative.

The ruling arises from a challenge by Ryanair against a fine of over €500,000 imposed in 2011 by Italy’s competition and market authority for engaging in unfair and misleading commercial practices, mostly relating to how the airline advertised its fares to consumers.

The Italian consumer watchdog considered Ryanair’s online check-in fees, the fees charged when paying by a credit card other than that approved by Ryanair and the VAT on domestic flights as unavoidable and foreseeable charges which should be notified to consumers before a booking process was commenced.

The issue was referred to the CJEU in Luxembourg for clarity on EU legislation governing air transport by the Italian Council of State after Ryanair had appealed a ruling by a regional court in Lazio which upheld a finding by the Italian competition and market authority that the airline was guilty of five separate unfair commercial practices.

The competition watchdog claimed Ryanair’s practices misled consumers and distorted competition with other airlines.

The Italian authorities ruled that the fee imposed by Ryanair for credit card bookings made by a credit card other than a specified, pre-paid Mastercard was unavoidable.

Ryanair strongly contested the finding claiming it had evidence which showed a third of all reservations made on its Italian website were made with a pre-paid Mastercard.

In its ruling the CJEU reaffirmed EU case law that airlines are obliged to indicate the air fare and separately taxes, charges, surcharges and fees that are unavoidable and foreseeable from the first time the price is indicated online.

The court said airlines were also required to indicate the optional price supplements “in a clear, transparent and unambiguous way only at the start of the booking process.”

The CJEU said the foreseeability of fees for using a credit card other than that approved by Ryanair resulted from the airline’s policy and they were also unavoidable as in reality it meant a free service was “reserved for the benefit of a restricted class of privileged consumers”.

In relation to online check-in fees, the CJEU accepted that where there was at least one option to check-in free of charge, the fees should be regarded as optional and do not necessarily have to be indicated in the initial offer.

Ryanair has a chequered history with the Italian competition and market authority and is also separately challenging a €3 million fine imposed by the watchdog last year over changes to its cabin luggage policy that was introduced in 2018.

The antitrust body claim the imposition of a fee for larger items of cabin luggage up to 10 kilos was increasing ticket prices in a non-transparent manner.

About the author:

Seán McCárthaigh

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