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Airline Add-on Fees Need not Bend to Spanish Law

(CN) - A Spanish regulation that prohibits airlines from charging passengers for checked luggage violates EU law, an adviser to Europe's highest court held Thursday.

In 2010, Spanish low-fare airline Vueling added a $54 charge to Arias Villegas ticket after the woman indicated online that she intended to check two bags. Villegas filed a complaint against the airline which eventually resulted in a $4,100 administrative fine against Vueling.

The airline appealed the fine, claiming that Spain's law violates EU pricing freedom regulations. The appeals court asked the Court of Justice for the European Union to address whether those regulations applied in the wake of carriers that promise low fares, but add surcharges for any and all services associated with their flights.

In his opinion for the Luxembourg-based high court, Advocate General Yves Bot confirmed that EU law allows airlines the freedom to charge for services - whether as part of the base price of the ticket or as an optional price supplement. He noted that the EU no longer allows member states to get involved in airline pricing practices.

"The EU legislature allowed air carriers complete freedom in setting air fares," Bot wrote. "It thus placed a restriction on the unfettered sovereignty hitherto held by the member states in this area by replacing the member states' power to approve fares with a mere prior notification measure and limiting member states' involvement to situations where fare levels either were excessive to the point of penalizing users, or on a sustained downward path, in order to put a stop to the trend."

While EU law prohibits airlines from charging for carry-on luggage, they are free to charge for checked bags - provided the fees are "communicated in a clear, transparent and unambiguous way at the start of any booking process and their acceptance by the customer shall be on an 'opt-in' basis," according to the ruling.

Spain's prohibition on airline surcharges stymies the EU's attempts at a harmonized travel experience throughout Europe, the adviser found.

"It is clear that the EU objective is to achieve a more efficient, consistent and homogenous application of community legislation for the internal aviation market in order to avoid a distortion of competition arising from the different application of the rules at national level whilst enabling consumers to compare effectively the prices for air services," Bot wrote. "Given that air transport is, by its very nature, an international market on which similarly-sized airline companies are present through completely borderless booking tools, it is essential in the light of the objectives pursued by the EU legislature that their activity actually be regulated by rules which are common to all member states of the European Union. Legislation such as that at issue here clearly runs counter to those objectives."

He added: "Whilst the wish to rein in airline companies' commercial practices may be perfectly legitimate, the fact remains that EU law aims to deregulate the sector by allowing those companies pricing freedom."

Bot's opinion is not binding on the Court of Justice, which has begun its own deliberations in the case.

Vueling carried nearly 15 million passengers in 2012, making it Spain's second-largest airline. It serves more than 100 destinations throughout Europe, Africa and Asia.

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