NEW ZEALAND: Airlines Under Prosecution Over Pricing Tactics

Airline "drip-pricing" is again under scrutiny in New Zealand after a ruling in Australia.

Drip-pricing, or adding on extra costs after a headline fare is selected, is common practice, particularly for low-cost carriers.

The Australian Competition and Consumer Commission (ACCC) has forced Jetstar and Virgin to warn passengers booking online that there might be more fees to pay when a flight is selected.

They had previously been adding the fees at the end of the online booking process, without warning.

The ACCC recommended a $550,000 fine for Jetstar and a $200,000 fine for Virgin Australia. Jetstar has challenged the amount of the fine.

In New Zealand, Air New Zealand charges a card payment surcharge of at least $4 per passenger, added late in the purchase process.

Jetstar's app adds a booking fee on the page where credit card details are entered.

The Commerce Commission has already taken action against airlines' "opt-out" extras, such as insurance that was added on automatically unless the customer took it off.

The Commerce Commission had said it would not pursue an investigation into drip-pricing until the Australian case was decided.

A spokeswoman said the issue had been raised with the commission and was being assessed.

Lawyer Michael Wigley said the law required the airlines to be upfront with their customers, which was why the Australian regulator had taken action.

"Air New Zealand and Jetstar should be prosecuted based on allegations they are misleading their customers, largely for the reasons that court proceedings were successfully brought against Jetstar and virgin by the Australian equivalent of the Commerce Commission."

An Air New Zealand spokeswoman said the airline was not under investigation

"We are confident that we are upfront with our pricing."