Airlines told to declare full fare

By STUART DYE transport reporter

Airlines are being told to stop hiding extra charges that can add more than $100 to advertised fares.

The directive comes from the Commerce Commission, which says burying extra charges such as levies, taxes and insurance in the small print misrepresents the price of fares.

Travel agents say the extra costs mean travellers can pay as much as 44 per cent more than the advertised price.

Many people seeking advertised fares are not aware of the hidden costs until they buy their tickets from an agent.

Under the commission's directive, the prices advertised would be the prices customers pay.

The director of fair trading, Deborah Battell, says the commission is concerned about inadequate disclosure in advertisements.

"When businesses are advertising, they should be advertising the price people have to pay.

"Additional levies, taxes and costs disclosed only in small print effectively alter the original deal."

The commission last year prosecuted Polynesian Airlines for misleading advertising and Freedom Air for breaches of the Fair Trading Act.

Yesterday, Air New Zealand and Qantas were to appear in court facing similar charges. Both cases were adjourned.

The Consumers Institute says it has been inundated by travellers angry about hidden costs.

"The more competitive airlines become, the closer they get to the line," said chief executive David Russell.

"The consumer wants to know what it costs to get from A to B, and that's what should be quoted.

"Instead, airlines are systematically attempting to deceive consumers."

Airlines began separating insurance and civil aviation levies after the September 11, 2001, attacks in the United States, when new security measures increased the amount customers were paying in taxes.

Flight Centre marketing manager Shane Parlato says travel agents often have to face irate customers.

"We advertise the prices airlines pass to us, and have to explain to the customer why it costs so much more than they thought.

"We would be happier if prices were all-inclusive - that is only fair to the consumer."

Air New Zealand managing director Ralph Norris has said the company will change the way it advertises its prices, but has also denied misleading the public.

The company has indicated it will deny the charges it faces when it appears in August.

Last November, its budget airline, Freedom Air, admitted eight breaches of the Fair Trading Act and was fined $9000 plus costs.

The charges related to newspaper and website advertising that did not disclose the full cost of airfares.

Polynesian Airlines was fined $7500 plus costs after a nationwide campaign advertising an $889 flight and accommodation package to Samoa, which did not say the offer was available only from Auckland.

Airlines can be fined up to $100,000 for Fair Trading Act breaches.

Ms Battell said the commission had been concerned for some time about misleading advertising.

It had been brought to its attention by consumer complaints.

"There are general concerns about this that extend beyond the airline industry."