Competition Watchdog Grounds Jetstar and Virgin Over ‘Drip Pricing’ Of Fares

Photo: Bradley Kanaris/Getty

The Australian Competition and Consumer Commission (ACCC) has begun Federal Court actions against both Jetstar and Virgin Australia over ‘drip pricing’ – the practice of advertising one fare online, then adding a range of fees and charges later – alleging the airlines were engaged in misleading or deceptive conduct over airfares.

The ACCC alleges that both Jetstar and Virgin would offer a fare on their websites, but insist they only certain payment methods were acceptable, ultimately adding to the cost of the fare.

The consumer watchdog’s examples are Jetstar’s $8.50 and Virgin’s $7.70 credit card booking fees

They allege that the airlines failed to adequately disclose an additional booking and service fee and since it applies to the substantial majority of online bookings, it should be disclosed prominently up front.

ACCC Chairman Rod Sims said the practice makes it difficult for businesses with more transparent pricing practices to compete on a level playing field.

“The ACCC continues to investigate businesses in other industries in relation to their practices of incremental disclosure of fees and charges,” he said.

The Jestar case is due before the Federal Court on August 6, and Virgin on August 13.