Cheap flights no seats - misleading airline advertising cases Michael Wukoschitz Austria
Main Problems • „cheap flights“ - pricing • „no seats“ - availability
Legal situation in Austria • Pricing Act („Preisauszeichnungsgesetz“) • Unfair Competition Act („Gesetz gegen den unlauteren Wettbewerb – UWG“)
Pricing Act: • Sec. 1 Par. 1 Num. 3: „This Federal Act applies to ... pricing for air travel if offered by air carriers to consumers.“ • Sec. 9 Par. 1: „All pricing has to include VAT as well as all other taxes and surcharges“ • Sec. 13 Par. 1: „Sec. 9 to 12 also apply to voluntary pricing particulary in advertisements ...“
Unfair Competition Act(old version) • Sec. 1 Par. 1: „Who acts against morality in business dealings for competition purposes, may be claimed against for ceasing and desisting as well as compensation“ • Sec. 2 Par. 1: „Who provides details in business dealings for competition purposes about his business, quality..., prices ofhis products and services, ... which are potentially misleading, may be claimed against for ceasing and desisting ...
Formal Oligation to • cease and desist from advertising airfares in Austria, such as but not limited to fares for flights to Frankfurt (Hahn), London (Stansted) ... at EUR 1,-- ... in particular in Austrian newspapers like ... if these fares do not include all applicable fees and taxes ... • pay a contractual penalty of EUR 5.000,-- per incident for each further infringement of this obligation • publish this obligation in the editorial sections of the relevant newspapers
Ryanair‘s Defence: • not misleading, consumers used to add taxes • prices excluding taxes only advertised by mistake • no relevant influence on consumer‘s decision • no danger of repetition because of strict observation of national laws
2. Case Austrian Airlines v Niki Luftfahrt GmbH
Advertisements • Flights to Paris, Rome Zurich „from EUR 29,--“ • direct booking through website • 11,5 to 14,4 % of the seats
Claim to cease and desist from advertsing low fares whereas consumers have to pay more expensive fares because • non-availability of seats at the advertised fare within the months indicated on the website despite availability of more costly seats • non-availability of a return flight at the advertised fare within the months indicated on the website but only at more costly fares • next flight at avertised fare available no earlier than in more than 10 weeks from advertisement despite availability of more costly seats before that date
Interim Injunction • to cease and desist from advertising low airfares • if no sufficient number of seats at these fares available for online-booking to cover consumer request to be expected • but only seats at more costly fares available • specifcly if within a timeframe following the advertisement of about 4 ½ month as indicated on the website no single seat and/or no return flight available at advertised fare
Supreme Court Reasoning(OGH 4 Ob 265/05g) • Consumers are aware of limited availability of cheap seats and do not expect availability at each flight if only any seats are available; they are expecting necessity of long term booking. • Consumers are expecting possibility of online booking; availability of seats through other channels is therefore irrelevant. • Low fare flights are often used for short trips; consumers therefore expect availability of a low fare return flight.
Contact: Michael Wukoschitz SCHMIDT KORNFELD WUKOSCHITZ WINDHAGER RECHTSANWÄLTE - ATTORNEYS AT LAW Mariahilfer Straße 1d, A 1060 Vienna, Austria Tel ++43 (1) 586 15 21 Fax ++43 (1) 587 42 06 E-Mail: firstname.lastname@example.org Web: www.coop-recht.at