Monday, November 10, 2008

Fares Fair and the Audacity of Hope!

On November 1st new EU rules came into force which will require airlines and others advertising ticket prices for flights to include the full cost including fees, charges and taxes upfront. In addition passengers should get the breakdown of the different categories of costs making up the final price:tariff, taxes, airport charges and other fees. We all know the story, a flight is advertised as free or for a €1, but by the time we pay for it the price is €60. Now there are good deals out there and people can get cheap flights. But the problem with this sort of advertising is that it lures people with an initial misleading offer and having gone through the booking process most people just buy rather than start and search again. So instead of booking a flight with another airline for €50, we pay €60 because the initial cost quoted was a €5.

It would be like a supermarket saying we charge 10c for a loaf of bread, but you have to pay 20c for the car park, 10c for the trolley, 10c for using the check-out. Up to now many consumers didn't have the detailed price information they needed up front to make an informed choice and decision. Price transparency is a key component of any consumer contract, so these new rules are welcome. However there will still be wriggle room for the airlines, some have introduced a number of discretionary charges such as check in and baggage charges, so it will still be difficult in some cases to know the full cost until consumers gets to the point of purchase. Consumers will have to factor these extra costs into account.

The other positive measure being introduced is that airlines will not be able to impose charges on consumers without their express consent. Up to November 1st airlines such as Aer Lingus, Aer Arann and Ryanair have automatically included insurance on flights booked online, requiring the customer "to opt out" if they wanted to exclude an extra such as insurance from their purchase. I have come across cases where the consumer was not aware that they were paying for insurance or thought they were required to buy insurance. Obviously its a matter for each consumer to decide, but do you really need to pay insurance on a flight from Dublin to London? The merit of many of these insurance policies is questionable in my view. From now on the websites of all airlines should be designed so that consumers have "to opt in" to order and pay for insurance and or other extras if they want them.

The key thing now is to ensure that these new rules are enforced. In the first instance that's the responsibility of the Department of Transport and I assume the National Consumer Agency, but also us as consumers to report if we find the new rules are being breached.

I also see that the EU Commission has launched a website for consumers where they can get advice on and report what they consider are unfair commercial practices. Looks like a good initiative.

I cannot leave the blog this week without a mention of events in the US. Well as my friends know I am a bit of a political and election junkie. Watch and enjoy elections and politics from all over the world, and in keeping with habit since 1992 (then all I had was BBC Radio 4) stayed up for the elections. Apart from watching the historic election of Barack Obama, I was keeping an eye on the Senate and House races, would the Democrats get a filibuster proof majority in the Senate and would the 2006 Democrat surprises hold on? My friend Dominic tells me that there is a technical term for this affliction called Psephology not sure if there is any cure! I had been keeping an eye on North Carolina since the summer and was really pleased to see Kay Hagen win over Elizabeth Dole, who ran a nasty and negative campaign, especially in the end.

Inspiring stuff

The thing that inspired me most about Obama was the triumph of hope over fear and optimism over negativity. That got me thinking about consumer advocacy where there is a danger of always being negative, of always knocking, of always being the hurler on the ditch. Yes it is important to highlight deficiencies, but consumer organisations and advocates also need to be positive and put forward solutions and proposals. We are all too familiar with the naysayers, the hurlers on the ditch, the bores who come to meetings, never have a good thing to say, and just criticise and who stay talking when there is nothing left to say. These are the sort of people we all stop listening to after a while, so like people, organisations need to avoid falling into this nexus of negativity or else we won't be taken seriously after a while too.

Classic Naysayers, but at least they were funny unlike some I know!