EU Proposes Bill to Force Airlines to Advertise All-Inclusive Fares

The European Commission on Tuesday proposed legislation that would force airlines to advertise fares inclusive of all taxes, charges and fees, sparing travelers the shock of jaw-dropping hidden costs when it is time to pay.

The bill leaves it to airlines to set fares but will make it easier to compare the price of tickets on different airlines.

It also removes fare differences based on where a passenger lives.

In advertisements and on Web sites, airlines will have to spell out the total charge for a ticket, including - if any - credit card charges, government taxes, fuel surcharges and extra baggage fees.

"Consumers are being mislead by seemingly interesting fare offers and are only told the full fare at the moment of payment," the European Commission said in explaining the rationale for the bill.

The draft legislation must be endorsed by the 25 EU governments and the European Parliament to become law, which could happen in late 2007 at the earliest.

National flag carriers can be as guilty of shaky pricing practices as low-cost airlines.

The liberalization of the EU aviation sector in the past decade has increased the number of air routes by more than 60 percent and forced prices down as new competitors appear on the market.

"Today it is generally cheaper to travel by air and more and more European citizens can afford it," EU Transportation Commissioner Jacques Barrot said in a statement.

But he said passengers can still run into "unclear information on fares or pricing that discriminates based on residence.

The bill requires airlines to charge customers the same fare no matter where they live in the EU.

EU officials say they have received numerous complaints about airlines charging different fares for exactly the same ticket. Most of these complaints were about Internet bookings that refused the sale when customers typed in their credit card numbers and home address.

Eva Lichtenberger, a European Parliament member from Austria, called on the Commission last week to investigate overcharging by budget airline Ryanair Holdings PLC, citing German media reports that these fees are higher than the actual taxes and airport levies Ryanair pays out. Ryanair denies these claims.

The EU's push for price transparency is part of the legislative package that also aims to make it easier to lease aircraft and crew in the EU - and harder in non-EU nations with less rigorous social and safety rules.

The Commission wants the power to be able to revoke EU operating licenses for airlines - something that only national governments can do at the moment - saying it needs to be able to step in if countries do not act.

They will also reinforce regulation to make sure airlines are not on the verge of bankruptcy and will draft clearer rules for airlines run as public services to isolated islands.

The EU says it will demand more information before it approves subsidized air services to make sure that this is not being misused to reward one airline and keep out new contenders.

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