Australia’s second largest carrier Virgin Australia Holdings Limited (ASX:VAH) and Jetstar are in the firing line from Australia’s competition regulator.
The Australian Competition and Consumer Commission (ACCC) has started proceedings in the Federal Court against both airlines.
The ACCC alleges both airlines engaged in misleading or deceptive conduct and made false or misleading representations in relation to particular airfares.
Virgin and Jetstar are accused of ‘drip pricing’ which the ACCC describes as advertising a headline price online but adding extra fees which may be unavoidable for consumers.
These charges are incrementally disclosed or ‘dripped’ which hikes the final purchase price above the advertised price.
The ACCC is seeking monetary penalties, injunctions, corrective advertising, and costs against each airline.
Virgin Australia Holdings reported a net loss of $83.7 million in the first half of the 2014 financial year.
