Airlines’ supersize surcharges look set to continue as ACCC takes Virgin Australia and Jetstar to court

EXCLUSIVE: Airlines, hotels and ticket agencies look set to keep slugging customers supersized surcharges, despite two court cases.

AIRLINES, hotels and ticketing agencies look set to get away with slugging customers supersized surcharges, in defiance of the Federal Government, Reserve Bank and corporate cops.

Two court cases launched yesterday may mean the fees are no longer hidden from consumers, but News Corp Australia can reveal efforts to get the surcharges lowered are now in disarray.

The federal minister responsible for competition and consumer matters, Bruce Billson, told the Australian Securities and Investments Commission last November to find a way to get credit-card booking fees cut to “reasonable cost” — about one per cent of the value of the transaction.

But after more than six months on the case, last night an ASIC spokesman conceded: “ASIC does not have any direct power to restrict the amount of a surcharge to the reasonable costs.”

ASIC had been brought in after the Reserve Bank failed to get the fees down.

News_Image_File: Graphic: Daily Telegraph

Mr Billson’s spokesman last night said: “We have asked Treasury to provide advice to Government on where the issue of credit card surcharging sits as it still remains unclear.”

News_Image_File: ACCC chaiman Rod Sims says other industries are also under investigation. Picture: Mike Keating

The only positive for consumers is that the Australian Competition and Consumer Commission has lodged separate proceedings against Virgin Australia and Jetstar, accusing both airlines of “misleading or deceptive conduct” or “false or misleading representations” in the way they lure would-be customers with super-low airfares only to slug the “substantial majority” with payment surcharges of as much as $17 per passenger. This is known as “drip pricing”.

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The card fees are usually the same regardless of the fare, meaning families attempting to travel to a budget are hardest hit while business-class travellers are least affected.

ACCC chairman Rod Sims yesterday said it was “concerned about advertising that draws consumers into an online purchase process but fails to provide sufficient upfront disclosure of additional fees and charges that are likely to apply.”

Mr Sims said the ACCC went to court after seeking substantial changes from Virgin and Jetstar: “We didn’t get that.”

The ACCC seeks fines that could run into millions of dollars for each airline. It also wants the court to force the carriers to include booking fees in advertised prices.

Jetstar said it would defend the action. Virgin said it was “considering all options”.

The ACCC is not pursuing Qantas, Tiger or Regional Express — which appear to do much the same thing as Virgin and Jetstar — because it believes wins against the accused pair would lead to industry-wide change.

Mr Sims said the ACCC was still investigating “other industries in relation to their practices of incremental disclosure of fees and charges.”

Ticketing agencies are thought to be in the crosshairs.