The European Court of Justice found unavoidable surcharges must be included in an airline’s initial offer.
LUXEMBOURG (CN) – Airlines must be more transparent in pricing by including additional fees in ticket prices on their websites, the European Union’s highest court ruled Thursday.
The European Court of Justice found that budget airline Ryanair was not clear enough about what the final cost of a ticket would be since it didn’t include mandatory additional charges in the initial ticket price.
The low-cost airline was fined 500,000 euros ($540,000) by the Italian Competition Authority in 2011 for not showing accurate prices on its website. Prices for flights did not include unavoidable charges like taxes and check-in fees. Ryanair appealed the decision, arguing that fees were not part of the ticket price, but were instead additions and therefore did not have to be included.
An Italian court referred the case to the EU’s high court to clarify what fees can be considered an option under rules governing the 27-member political and economic union’s transportation companies.
EU competition regulations state: “Customers should be able to compare effectively the prices for air services of different airlines. Therefore the final price to be paid by the customer for air services originating in the community should at all times be indicated, inclusive of all taxes, charges, and fees.”
The Italian consumer watchdog argued that three types of fees charged by Ryanair, but not shown in the initial price, should have been included: the value-added tax on domestic flights, online check-in fees and credit card payment fees.
The Court of Justice agreed Thursday, finding that required surcharges must be included in an airline’s initial offer.
“It cannot be accepted that a price supplement is avoidable and therefore optional where the option offered to the consumer is subject to a condition imposed by the air carrier,” the Luxembourg-based court wrote.
The seven-judge panel found that the value-added tax applied to the airfare must but included, but any tax applied to optional add-ons do not need to be. Online check-in fees have to be included in the price as well unless there was a free option. Finally, credit card fees must also be included, as they are unavoidable.
The decision comes a day after Ryanair’s CEO told the Financial Times that plans to fly with social-distancing measures were “idiotic.” Michael O’Leary said governments would have to pay for the middle seat if airline regulators move forward with plans to create more space between passengers to prevent the spread of Covid-19.
The company has angered passengers by refusing to process refunds until the pandemic is over, leaving grounded travelers stuck with unusable tickets.
Ryanair has butted heads with the Italian government before. The company was fined 3 million euros ($3.2 million) in 2018 for changes it made to its baggage fees.
The airline did not respond to a request for comment on Thursday’s ruling.