| Jetstar and Virgin found to have misled customers over airfares |
Two of Australia's major airlines have been found to have engaged in false and deceptive conduct, and made false and misleading representations about the price of booking airfares over the internet.
The Australian Competition and Consumer Commission (ACCC) took the airlines to court in 2014 for a practice known as "drip pricing", where the true cost of a booking is not apparent until the final stages of a transaction.
Booking and service fees for online purchases were the focus of the ACCC's action.
ACCC chairman Rod Sims said "the ads we took action in relation to were very low airfares, so these booking fees were quite a large percentage of what you had to pay".
In the case of Jetstar it amounted to $8.50 per passenger for a domestic flight for credit card bookings.
For Virgin it was $7.70.
"The billing fee was right towards the end of the process and the judge found that was false and misleading conduct," Mr Sims said.
Justice Lindsay Foster found that both airlines had contravened the Australian Consumer Law particularly on mobile sites, but stopped short of finding contraventions in several of the ACCC's complaints.
In a statement, Jetstar said "we want our customers to clearly understand all fees and charges associated with their booking and that's why we have progressively made changes to make it clearer at every step of the booking process what charges may apply".
A spokesman for Virgin said the Federal Court had found in favour of Virgin Australia on five of the six claims made by the ACCC.
"The one claim on which the Federal Court found in favour of the ACCC related to the disclosure of the booking and service fee on Virgin Australia's mobile website," he said.
"Virgin Australia is reviewing the judgment and considering its position on this aspect."
Choice spokesman Tom Godfrey has welcomed the ruling.
"This ruling today by the Federal Court should send a very clear message for businesses that they need to stop doing it, it is intensely frustrating and it leaves consumers out of pocket and it stops them shopping around for a genuinely good deal," he said.
"There's no doubt that the airlines knew that the game was up, not necessarily with their mobile sites but certainly with their online sites.
"We're starting to see an end to the dodgy tactics that have plagued those online checkouts for so long."
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