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OFT Obliges Airlines To Disply Tax-Inclusive Prices

by Jason Gorringe, Tax-News.com, London

10 August 2007


It emerged on Thursday that following a warning issued to the holiday and travel industry in February of this year, the UK's Office of Fair Trading (OFT) has successfully taken action against 13 airlines that did not include all fixed, non-optional costs, such as taxes, in prices on their websites.

As a result eleven airlines (easyJet, bmibaby, Flybe, Thomsonfly, flythomascook, Monarch, Jet2, Globespan, Wizz Air, Sky Europe and Germanwings) have already changed their advertisements and websites (both their homepages and booking processes) to include fixed, non-optional costs in their advertised prices, and the OFT has stated that it expects continued compliance from these airlines.

Two other airlines, Aer Lingus and Ryanair, have changed their homepages, but have said technical issues prevent them from changing their entire website booking processes immediately. However, the OFT is satisfied that these airlines will be making these changes shortly, and will continue to monitor the situation to ensure the agreed changes are made.

In the interim period, Ryanair has agreed to place a clear statement on its website to inform consumers how much the taxes and charges will add to the final price.

In a co-ordinated move, ABTA - The Travel Association has also taken action against members that have failed to comply with the ABTA Code of Conduct in relation to the same type of misleading price indications.

On 13 June, the ABTA Code of Conduct Committee handed out fines and reprimands to several ABTA members for failing to include fixed, non-optional costs in prices.

The OFT will be working with international partners, including the National Consumer Agency (NCA) in Ireland, to ensure compliance across the holiday and travel industry, and to ensure that the undertakings provided by the airlines are complied with.

Sean Williams, OFT Executive Director, explained that:

"The OFT is committed to ensure that consumers are not misled by advertised prices that bear little relation to actual prices. Misleading pricing not only undermines consumer confidence but also distorts competition and we will enforce the law enthusiastically where we find that consumers have been misled."


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