ACCC fines Virgin and Jetstar for drip pricing

Posted: 8 March 2017 10:14 am

Jetstar Virgin Australia planes

The Federal Court fined the airlines a total $745,000.

Two of Australia's major carriers, Jetstar Airways and Virgin Australia, have been fined a total $745,000 for using drip pricing tactics, which may have mislead consumers purchasing advertised airfares online.

The Australian Competition & Consumer Commission (ACCC) found Jetstar had made false or misleading representations about specific advertised fares on its website in 2013 and on its mobile site in 2014.

Virgin was found to have committed a similar breach on its mobile site in 2014.

Drip pricing occurs when customers are unavoidably charged more than the advertised price.

The ACCC was concerned that Jetstar and Virgin’s drip pricing conduct presented consumers with a headline price but failed to provide adequate disclosure of additional fees.

The Federal Court ordered Jetstar to pay a $545,000 penalty, while Virgin Australia was fined $200,000 for breaches of Australian Consumer Law.

The ACCC said the penalties imposed upon the two airlines have encouraged businesses across several industries, including ticketing and accommodation, to improve their online booking practices and properly disclose any additional fees and charges.

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