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Last Updated: Tuesday, 18 July 2006, 11:50 GMT 12:50 UK
EU clamps down on airline fares
By Theo Leggett
Europe business reporter, BBC News

Planes on the tarmac at Heathrow Airport
The EU wants greater airfare transparency
Airlines which advertise attractive fares but add extra charges once the customer has decided to buy will be acting illegally under EU proposals.

Over the past decade, intense competition between low-cost carriers has greatly reduced the cost of flying.

But many passengers still end up paying more than they bargained for.

In order to attract customers airlines frequently advertise very low ticket prices - only to add taxes and fuel surcharges later.

But these seldom bear much relation to what the customer ends up paying.

That is because extra costs such as airport taxes, fuel surcharges, credit card fees, insurance and service charges are routinely added onto the basic price.

But these extra costs are usually only revealed at a late stage, when a customer may have already decided to buy a ticket.

Numerous complaints

The European Commission, the executive arm of the European Union, says this kind of tactic is misleading, and prevents consumers being able to compare the real cost of travelling with different airlines.

Clarity is what people prefer, but it's rarely what they get
Bruce Castle, London

Its new proposals will ban such practices, and force carriers to publish the full cost of each ticket, including all taxes and charges.

"Citizens must enjoy the benefits of the Single Market and have the possibility for more choice and quality. They must be able to easily compare fares between airlines," said Jacques Barrot, EU transport commissioner.

The EU will also ban airlines from charging customers in different European countries different fares for travelling on the same route.

This has been a common practice in the past - and the Commission says it attracted numerous complaints.

It said customers who tried to take advantage of cheaper prices on foreign websites were often prevented from doing so.

'Full breakdown'

Some observers believe the proposals are intended to target the Irish carrier Ryanair in particular.

Europe's biggest budget carrier has attracted criticism in the past for publishing headline-grabbing fares as low as 99p, when passengers would actually have to pay far more.

Last year, the authorities in Britain fined the company for publishing misleading fares, although it denied any wrongdoing.

But Ryanair says it will welcome the move.

It says it "already provides passengers with a full breakdown of fares, taxes and charges before any passenger makes a booking".

"For airlines it is common practice to separate out charges but consumers only get shown the full price at the end of the booking. This doesn't happen at the supermarket till, so why should buying flights be any different?" said Mike Pedley, principal researcher at Holiday Which?

Tightened rules

The new pricing rules are part of a much broader reform of European Union (EU) aviation law.

It is intended to bring the rules covering the sector, which were introduced 15 years ago, back up to date.

Among its other proposals, the Commission wants to set stricter rules for companies which lease fully crewed aircraft from firms based outside the EU.

It's a practice which is popular during busy months, when airlines can find themselves short of aircraft. But the Commission wants to make sure safety standards aren't undermined.

For the same reason, it wants to tighten up licensing rules, to make sure that airlines operating in the EU are financially in good shape.

There are concerns that airlines which are short of money might allow their safety standards to slip.

Finally, the Commission wants to prevent national governments from distorting the market, by giving national carriers special rights on services to and from the EU.

These are all significant changes. But for most consumers, one proposal matters most.

In future, the price you see should be the price you pay.

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