On the 7th of March the Federal Court ordered Jetstar Airways to pay $545,000 and Virgin Australia Airlines to pay $200,000 for breaches of Australian Consumer Law.
The way that the two companies were misleading consumers is through using ‘drip pricing’. Drip pricing is where a headline price is advertised at the beginning of an online booking yet additional fees and charges are added onto the price throughout the transaction.
The fees come after a 2015 ruling that drip pricing is no longer acceptable or fair to the consumer. The Australian Competition and Consumer Commission (ACCC) argued that these types of fees should be made obvious to the consumer.
Jetstar accepted the penalties, commenting that they are making changes to their fees system.
“On 1 September 2016 we removed the booking and service fee on domestic and international flights from Australia and we continue to offer a number of fee-free payment options for our customers who prefer not to pay with a credit card.”