Air Asia Berhad to pay $200,000 penalty for breaching the ACL

The Federal Court in Melbourne has imposed a penalty of $200,000 against Air Asia Berhad for contravening the single pricing provision of the Australian Consumer Law.

Air Asia Berhad, for a period of 10 months, did not display on its website (some airfare prices inclusive of all taxes, duties, fees and other mandatory charges in a prominent way and as a single figure.

The conduct was in relation to the following flights between:

  • Melbourne and Macau, London, Ho Chi Minh City, New Delhi, Hangzhou and Chengdu;
  • Perth and Taipei, Phuket, Osaka, London, Ho Chi Minh City, and Hangzhou; and
  • Gold Coast and Ho Chi Minh City.

Air Asia Berhad is a foreign corporation that carries on a business in Australia as a supplier of international air travel services to the Australian public.

Under section 48 of the Australian Consumer Law (ACL), businesses that choose to advertise a part of the price of a particular product or service must also prominently specify a single total price.

“This ACCC action vindicates the importance of all inclusive pricing. Consumers must have accurate price information, and in turn, airlines require a level playing field on price representations in this competitive industry where consumers are price sensitive,” ACCC chairman Rod Sims said.

His Honour Justice Tracey stated that “The principal vice to which s 48 of the ACL is directed is the seductive effect of a quoted price which is lower than the actual amount which the consumer will have to pay in order to receive the relevant service.”

“Unless the full price is prominently displayed the consumer may well be attracted to a transaction which he or she would not otherwise have found to be appealing and grudgingly pay the additional imposts rather than go to the trouble of withdrawing from the transaction and looking elsewhere.”

“The company which is seeking to attract business in contravention of s 48 will also obtain an advantage over competitors who are compliant.”

In addition to the penalty, Justice Tracey made a declaration by consent that Air Asia Berhad contravened section 48 of the Australian Consumer Law. Justice Tracey also accepted a court undertaking from Air Asia Berhad restraining it from engaging in similar conduct for 3 years.

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