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Transparency of airline ticket pricing
The European Commission is concerned that the lack of transparency and consistency in the current practices of air carriers with respect to marketing, pricing and booking of air tickets may have been resulting in customer confusion and potentially unfair competition.
The transparency of a ticket price can be limited by:
- taxes and charges being introduced late in the booking process, when passengers are at the point of making a final confirmation on their booking
- differences in the price of the ticket depending on purchase outlet
- the inherent complexity of yield management systems, which customers can find confusing
- non-transparent charges such as those for luggage, on-board catering and changing or refunding a ticket.
Steer Davies Gleave collected and analysed data on the practices of the European Union’s main air carriers to develop an overview of the range of current practices.
The objective of our study was for the Commission to improve its understanding of airline ticket pricing and to assess whether there are any issues that should be addressed through legislation or other measures. Further to our study, it is now mandatory for European airlines to include all taxes, fees and charges in the prices presented in advertising and on their websites.
How we did it
The issue of transparency in airline pricing is a complex one that required a multi-faceted approach.
We collected data on the legal basis for taxes and charges, as well as other relevant legal issues, to clarify the effect of Member State legislation in this area.
We then identified and analysed:
- cases where information provided by air carriers provided potentially misleading information to air passengers
- the level of taxes, fees and charges imposed on air tickets and the transparency of these charges to customers
- the stage in the booking process at which taxes and charges were added to the price
- the relationship between taxes, fees, charges and costs and the legal basis of these charges
- how airlines set the price of air tickets and the conditions that they may impose in order to obtain low fares
- other additional charges that air passengers may have to pay
- the transparency of airline price advertising