By NOEL MURPHY
JETSTAR might have sold out its $29 fares to the Gold Coast in quick time today but its drip-charge fees – which result in much higher actual costs – are still under the scrutiny of the federal court.
The Australian Competition and Consumer Commission took Jetstar to court late last year, alleging it engaged in misleading or deceptive conduct and made false or misleading representations in relation to particular airfares.
The ACCC alleged Jetstar’s conduct was drip pricing – in which a headline price is advertised at the beginning of an online purchasing process and additional fees and charges, which may be unavoidable for consumers, are then incrementally disclosed.
This can result in consumers paying a higher price than the advertised price or spending more than they realised, the ACCC said.
Jetstar has announced new flights to the Gold Coast out of Avalon after a $26 million rescue package by the State Government and Linfox, owner of Avalon Airport.
The ACCC alleged Jetstar made representations on its website and mobile site 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 alleged Jetstar failed to adequately disclose an additional booking and service fee. In particular, it alleged that 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.
The ACCC alleged these fees applied to the substantial majority of online bookings and should have been disclosed upfront and prominently with or within headline prices.
While Jetstar made some adjustments to the disclosure of these fees during the ACCC’s investigation, the ACCC remained concerned with these pricing practices.
“The ACCC is concerned about advertising that draws consumers into an online purchase process but fails to provide sufficient upfront disclosure of additional fees and charges that are likely to apply,” ACCC chairman Rod Sims said.
“Drip pricing practices, such as those alleged by the ACCC in these proceedings, have the potential to cause both competition and consumer detriment.
“Not only can this practice lead to consumers potentially being misled, it may also make it difficult for businesses with more transparent pricing practices to compete on a level playing field.”
The court case, which wrapped up last December is still awaiting a court ruling. An ACCC spokesman said he had not indication when that ruling might be made.
