Case Reference: Airline payment surcharges - CRE-E/27017
Complainant: Which? (Which? made a super-complaint to the OFT
regarding payment surcharges in the passenger transport sector on 30
Investigation into: Aer Arann, Aer Lingus Limited, BMI Baby
Limited, Eastern Airways Limited, easyJet plc, Flybe Group plc, German
Wings GmbH, Jet2.com Limited, Deutsche Lufthansa AG, Ryanair Limited,
Thomas Cook Airlines Limited, Thomson (TUI UK Limited), Vueling Airlines
S.A, Wizz Air Kft.
The OFT was concerned that consumers were being misled about the level
and/or the existence of payment card surcharges. The airlines under
investigation were charging consumers an additional fee for making a
payment by debit card, which was not included in the headline price,
and/or were not presenting their credit card charges in a clear and
transparent manner. The OFT was concerned that these practices made it
difficult for consumers to compare prices easily, damaged consumer
confidence and impeded effective competition.
The Enterprise Act 2002, the Consumer Protection from Unfair Trading
Regulations 2008 ('CPRs') and the Air Services Regulation (EC
Regulation 1008/2008) ('ASR').
On 28 June 2011 the OFT published its response to the Which?
super-complaint, in July and August it monitored changes and in
September 2011 the OFT opened an investigation into payment surcharges
in the airline industry. The OFT focused on 14 airlines which had not
made voluntary changes in line with the recommendations set out in the
OFT's response to the Which? super-complaint.
The OFT was concerned that airlines' payment surcharges were a
'drip-fee' or 'price partitioning' device which concealed the true
or genuine price of their services. This is because the average consumer
was not in a position to pay by these payment cards which were presented
by airlines as a free payment mechanism. The OFT was further concerned
that there was no reasonable or legitimate reason for the airlines'
failure to provide headline prices which included all unavoidable
charges, such as any cost for paying by debit card
The OFT considers that the airlines under investigation were engaging in
prohibited unfair commercial practices within the meaning of the CPRs,
including misleading actions and misleading omissions (further to
Regulations 5 and 6 of the CPRs), as well as committing breaches of
professional diligence. The OFT further considers that the airlines were
breaching the requirements of the ASR which requires all flight prices
to be presented inclusive of all foreseeable and unavoidable charges and
The OFT's objectives in taking enforcement action were to ensure that
- included debit card charges in all headline prices, whether on the
airline's website and in its advertising
- presented optional credit card fees clearly and transparently.
In July 2012, the OFT closed its investigation. Most airlines gave
formal undertakings to the OFT, and others made changes to their pricing
practices and these changes were accepted in lieu of undertakings by the
OFT. These changes, combined with those made voluntarily by other
airlines before and during the investigation, mean that free payment by
debit card will be the industry standard for UK passengers.
These changes are set out below:
||Undertakings (all PDF files)
||No longer operates flights on its own behalf
||Aer Lingus has already made interim transparency changes on its website. It will include its admin fee in all advertised prices by 1 August 2012 and make final changes to its website by 30 September 2012.
Update 26 October 2012: Final changes to the Aer Lingus website were made by 23 October 2012.
|BMI Baby Ltd
||BMI Baby's owner, IAG, has announced that it will no longer operate flights as of 10 September 2012. If it does continue to operate after that date, it will comply with the OFT's requirements as of that date.
Update 26 October 2012: BMI Baby ceased operating on 9 September 2012.
|Eastern Airways Ltd
||Eastern Airways did not surcharge for debit cards but has made changes to the way it presents its credit card charges.
||easyJet has made transparency changes to its website and advertising. It will make further changes to its website by 1 December 2012.
|Flybe Group plc
||Flybe no longer charges for debit cards and has made changes to the way it presents its credit card charges.
|German Wings GmbH
||German Wings no longer charges for debit cards and will be making further transparency changes to its website.
Update 26 October 2012: German Wings made further transparency changes to its website by 26 September 2012.
||Jet2 has provided an undertaking that from 1 August it will no longer surcharge for debit cards and will complete changes to its website by that date.
|On 30 July Jet2 informed us that it had encountered some unforeseen difficulties which mean that it will be in a position to make changes to its website on 8 August, and not on 1 August as previously agreed with the OFT.
||Lufthansa no longer charges for debit cards and has made transparency changes to the way it presents its charges.
||Ryanair has already made transparency changes to its website and from 1 August it will include its admin fee in all advertising and on its website. From 1 December it will no longer surcharge for payments made by debit cards.
||Thomas Cook no longer charges for debit cards.
||Thomson no longer charges for debit cards and has made changes to the way it presents its charges.
||Vueling was referred to the Spanish Authorities via the Consumer Protection Cooperation Regulation for enforcement action under European legislation due to their relatively small UK market share.
||Wizz Air no longer surcharge for debit cards.
The OFT’s enforcement partners
As part of this investigation, the OFT has been cooperating closely with
the AGCM (the Italian Competition and Markets Authority), which has also
been challenging a number of airlines on their pricing practices.
The OFT is grateful to the Civil Aviation Authority, the Advertising
Standards Authority, and the Irish National Consumer Agency for their
assistance in the investigation.
The OFT’s recommendation to the Treasury
Following recommendations from the OFT in its response to the
super-complaint last year, the Government has also announced plans to
bring in legislation to ban excessive debit and credit card
surcharges across the economy.