Extra Baggage

This case started in August 2010, where the air carrier, Vueling, added a €40 surcharge to the base price of airline tickets for checking in baggage. Ms. Arias Villegas filed a complaint when she was charged for checking in two pieces of baggage. She claimed that “the contract of carriage by air concluded with that undertaking contained an unfair term.”  “The Instituto Galego de Consumo de la Xunta de Galicia (consumer body established by the Autonomous Community of Galicia) imposed an administrative fine of €3 000 on Vueling.”

The Spanish high court then turned to the European Court of Justice on whether the Spanish legislation was compatible with the principle of pricing freedom of EU law. The Advocate General, Yves Bot, issue the ruling and stated that “the Spanish legislation which prohibits air carriers from charging for checking in passengers’ baggage in the form of an optional price supplement is incompatible with EU law.” He claimed that “EU law allows air carriers pricing freedom in respect of all commercial services associated with the performance of the contract of carriage by air, including services such as checking in baggage.” Air companies have the option of including the pricing of checked-in baggage in the base price of the airline ticket or to offer the service in return for an optional price supplement.

He also claimed that this interpretation is not applicable to hand baggage, as the airline must keep those free. Bot said that unlike checked-in baggage, “hand baggage remains the sole responsibility of the passenger.” He further stated that  “it is not part of the commercial services provided by the airline because there are no costs for checking it in, tracing it and storing it, as there is with checked-in baggage.” The court also said that passengers have the ability to have “their personal effects and objects they consider most precious or indispensable with them under their own care forms part of their personal dignity.”

Bot is also of the opinion that the Spanish legislation “reintroduces State regulation which the EU legislature took great care to abolish through deregulation and liberalisation of the sector.” As a result of that deregulation, Member states of the EU “no longer have the right to be involved in air carriers’ pricing practices, the applicable pricing conditions, and the types of services included in the basic price of the airline ticket.” The Spanish legislation questions the EU’s objective of “seeking to achieve a more efficient, consistent and homogenous application of Community legislation.” However,  the court stated that since air travel is an international market by it’s very nature, it is essential that the market is regulated by the rules of the EU.

The court claimed that in applying a surcharge for such a service, air carriers have to comply with consumer protection requirements. “Thus, air carriers must communicate in a clear, transparent and unambiguous way, at the start of the booking process undertaken by the customer, the detailed rules for pricing relating to checking in of baggage and allow the customer to accept or refuse the service in question on an opt-in basis”, said the court. The European Court of Justice ended the ruling by remanding the case to the Spanish high court to determine whether Vueling complied with those requirements in their dealing with  Arias Villegas.

The issue of hidden terms within purchasing contracts always seem to be an issue. Further, the increased price of air travel has been a big issue over the past few years, especially with regards to charging money for checking baggage. Even though the court said that it was incompatible with EU law, should air carriers be granted pricing freedom or should there be some sort of regulation to help the consumer? If so, to what extent should regulations have over the control of airlines in pricing? 

Sources: European Court of Justice; ECJ Press Release

Picture: Technorati.com

 

One comment

  1. I think that as much as we hate baggage check fees, it is up to the individual airlines to decide if they want to charge them or not. I believe in the pricing freedom that the EU has established, to the extent that it is not unjust or anticompetitive. There are many airlines in Spain/Europe, and in countries with struggling economies, these airlines have to make up the money in other places. Hopefully there are airlines who don’t charge baggage fees, and who consumers will move to, causing airlines like Veuling to reconsider their structure. Regardless, the companies should be able to make the decision themselves as to whether to add extra charges or not. I know I choose Jetblue because they let you check a bag for free, and it is in a company’s best interest to attract the most consumers, not make them angry. The market will work itself out.

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