AirAsia fined by Australian court for not including taxes, charges in advertised air fares

[Ikman Ikreza 0]

AirAsia fined by Australian court for not including taxes, charges in advertised air fares

December 18, 2012

AirAsia had also given an udertaking restraining it from engaging in similar conduct for three years. – Reuters pic

MELBOURNE, Dec 18 – A Federal Court in Melbourne said today low-cost-carrier AirAsia Berhad had been given a hefty A$200,000 (RM645,000) fine for not including taxes and other charges on its website, a violation against the Australian Consumer Law.

 

According to a report in the Herald Sun, the Australian Consumer and Competition Commission (ACCC) said the www.airasia.com site did not indicate whether the ticket prices included taxes, fees, loads or other additional costs “in a prominent way and as a single figure”.

 

The violation involved flights from Melbourne to Macau, London, Ho Chi Minh City, New Delhi, Hangzhou and Chengdu, flights from Perth to Taipei, Phuket, Osaka, London, Ho Chi Minh City and Hangzhou, as well as from the Gold Coast to Ho Chi Minh City, the report said.

 

Unless the full price is prominently displayed, the consumer may well be attracted to a transaction which he or she would not otherwise have found to be appealing and grudgingly pay the additional imposts rather than go to the trouble of withdrawing from the transaction and looking elsewhere, said Justice Tracey in his judgment.

 

Therefore, Tracey noted AirAsia’s actions had given them an unfair advantage compared with other companies who comply with the rules.

 

The report also said that in addition to the fine, AirAsia had also given an undertaking restraining it from engaging in similar conduct for three years.

 

“This ACCC action vindicates the importance of all inclusive pricing,” ACCC chairman Rod Sims said.

 

“Consumers must have accurate price information, and in turn, airlines require a level playing field on price representations in this competitive industry where consumers are price sensitive,” the Herald Sun reported.

 

Source : http://www.themalaysianinsider.com/litee/business/article/airasia-fined-for-not-including-taxes-charges-in-advertised-air-fares/

[lionel 0]

They need to learn from mistake

[Azrin A 2]

Hopefully in Malaysia, the Ministry will take some clue of this case.

[lionel 0]

Our consumer watchdog are not as strong as Australia...if our consumer watch is strong, we the consumer won't be bullied by those MMC, now we all need to follow all the terms and condition set by the company, and we the consumer don't have the terms and condition for those company...it is really unfair IMHO

[S V Choong 4]

Serve them right. Not a fan of this kind of practice, really.

[flee 5]

This case dates back to their early days in Australia. I think that they did not fully understand the consumer laws then.

 

Nowadays, they quote the all in fare on the website (i.e. all fares, taxes and fuel surcharge). In other words, non-optional items are included in the fare. That is why you do not see them offering zero fare tickets any more nowadays.

 

Only the optional items like food, luggage, hot seats, etc. are left out.

[Isaac 0]

They should be fined for their last few super misleading RM0 sale

[Lock SH 0]

'PADAN MUKA' ...........

 

The bosses are too arrogant ......

 

 

Edited December 18, 2012 by Lock SH

[flee 5]

Statement issued by AirAsia X:

 

NO INTENTION TO MISLEAD IN AIRASIA's WEBSITE PRICING

 

In response to the news published on the fine imposed by the Federal Court in Melbourne against AirAsia for contravening the single pricing provision of the Australian Consumer Law, Azran Osman-Rani, CEO of AirAsia X, the airline operating into Australia commented,

 

"The Court Judgment in this matter reflects that there was no intention to mislead at any time, and that no consumer was misled or had suffered any economic loss as a result of this inadvertence, and that AirAsia had been cooperative throughout. In addition, AirAsia had facilitated a speedy hearing and had also pleaded no contest to a technical breach."

 

"The fine of A$200,000 imposed as compared to the range of A$520,000 to A$650,000 sought by the ACCC reflects the Court's acknowledgement of the lack of any intention to mislead on the part of AirAsia."

 

"Nevertheless AirAsia X understands the importance of providing consumers with 'all-in' pricing and we remain fully committed towards displaying all-in fares on our website. We wish to highlight that all of our advertising has always been on the basis of all-in fares which are inclusive of taxes and other mandatory charges."

 

"These legal proceedings are related only to fare displays on the airasia.com website for a limited number of 'Fly-Thru' routes which were newly added to our network in 2011. The fares in question were manually entered and we took immediate steps to rectify this unintentional oversight, as soon as we were made aware of the same."

 

"The process of adding new routes and displaying fares on airasia.com has now been rectified and automated to prevent future recurrence. The airline notes the importance of all-inclusive pricing and of ensuring the accuracy of how the fare is prominently displayed."

 

Note: The salient terms of the judgment are as follows: * AirAsia was charged under s48(1) of the Australian Consumer Law of not specifying in a prominent way a single figure the price of its air fares even with inclusion of words "Fares shown EXCLUDE fees and taxes"

 

* The conduct although inadvertent was strictly and technically in contravention

* The ACCC sought a fine of between A$520,000 and A$650,000

* The Court came to finding that the appropriate fine was only A$200,000.

 

The findings of the Court were that a fine of A$200,000 was sufficient because:

 

a) There was no intention to mislead the consumer

 

-- The conduct in question was inadvertent not deliberate or reckless

-- A consumer has to undergo 9 steps in making an online booking. Only on page 2 of the booking process would the customer see the statement "Fares shown EXCLUDE fees and taxes"

-- The Court noted that pages 3 to 9 the single total price was displayed sometimes in more than one place, thus the consumer would have become aware of the full price to be paid before committing to a purchase

-- The Court found that there this was only a single breach and not multiple breaches

 

The contravention did not cause loss or damage to consumer -- A consumer could not complete the booking process without being informed of the actual total price for each flight

 

-- The Court noted there was no evidence of any consumer dissatisfaction or that any customer of AirAsia has suffered any economic loss.

[lionel 0]

No intention to mislead, is that true??! that's a joke!

[Geoff R. 0]

Good news as far as I am concerned - the more companies that are fined the better for this practice. Whatever Air Asia X say to me this type of advertising is intentionally trying to mislead the customer.

 

Geoff

[S V Choong 4]

No intention to mislead but intention to lure people look into FREE fares.... sounds like an attempt to save what is left of the face......

 

A fine is a fine... does not matter how big or small it is.

[flee 5]

Nowadays, the AA booking engine is very clear about your fares. You see it all even before you key in your pax details. And you can see what stage of the booking transaction you are at.

 

So, some good came out of this court case.

 

[ChrisJong 0]

It's only right the customer is made full aware of the fares is or without the non-optional charges when advertised.

 

Still when one sees all-in-fares, it still registered as inclusive of EVERYTHING!

[V Wong 0]

I only know when I purchased Jetstar Australia ticket a couple of years back, the price I saw advertised was the final price I paid, exclusive of the "card payment fee". Don't mess around with Oz consumer or aviation rules. Good that AirAsia has learnt a lesson.

Edited December 19, 2012 by V Wong

[Ja Singh 2]

and now, firefly should learn the same lesson.

[lionel 0]

and now, firefly should learn the same lesson.

firefly havent fly to oz yet...so it is safe here....

[Mike P 0]

This is not the first, hasn't AirAsia got the warning already? And since then, they have been publishing full fares on the ad as well as on the bookings. I think the Aus is just messing things up.

[flee 5]

This is not the first, hasn't AirAsia got the warning already? And since then, they have been publishing full fares on the ad as well as on the bookings. I think the Aus is just messing things up.

Nah, just a timing difference. When the Aussies complained, AirAsia immediately took action.

 

So the court case is academic because steps were taken to correct the situation. That is why the fine was set at a lower amount. Court cases take some time to be processed.

Edited December 20, 2012 by flee

[Mike P 0]

Nah, just a timing difference. When the Aussies complained, AirAsia immediately took action.

 

So the court case is academic because steps were taken to correct the situation. That is why the fine was set at a lower amount. Court cases take some time to be processed.

 

But then I think this is unjust to D7 or a bias, there are many other airlines also not publishing full fare.

[Josh T 0]

D7 knew exactly what they were doing. MH have been publishing the full fare ever since these rules in Australia came in. I remember when D7 started flying into Australia and they weren't displaying the full fare when they should have been. They thought they could get away with it and were caught. Computer glitch, my arse. Now the majority of people can see that they are not massively cheaper than full service airlines.

[V Wong 0]

+1

[Ashraf 0]

To say that you were not aware is bull5hit.

When you get your advertising agency to advertise, the agency will advise you of the laws of advertisement.

They must have chosen to ignore the advice and gamble with this!

Even if the agency is not aware, the newspaper will then advise the agency of the implications of the advertising laws.

 

I've gone through this before thats why i know.

[Izanee 0]

Hahaha, not everyone will accept AK or D7s bullshit! They deserved it, that is one costly cock up. I wonder which dingo they got their advice from

[Syukri 0]

D7 is lucky, our neighbour down-south got slapped with bigger fine hehe