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The Australian Federal Court has fined Jetstar Airways AUD545,000 (USD410,000) and Virgin Australia AUD200,000 (USD150,000) for offences relating to misleading advertising.
The pair were found guilty in December 2015, and the fines were announced this week by the Australian Competition and Consumer Commission (ACCC).
“The ACCC was concerned that Jetstar and Virgin’s ‘drip pricing’ conduct drew consumers into an online purchase process with a headline price, but failed to provide adequate disclosure of additional fees and charges that are likely to apply,” ACCC Chairman Rod Sims said.
‘Drip pricing’ is a practice where consumers are fed additional fees and charges incrementally, leading to a final price which may be significantly higher than the original advertised price.
For the 2014/2015 financial year, Virgin Australia had total revenue of AUD4.75 billion (USD3.5 billion) for an operating loss of AUD70 million (USD52.6 million). In the same period, Jetstar had revenue of AUD3.46 billion (USD2.6 billion) for an operating profit of AUD625 million (USD470 million).