ACCC Seeks Injunction Against Air Asia Over Misleading Ticket Prices

The Australian Competition and Consumer Commission (ACCC) said on Tuesday that it will seek an injunction from the Federal Court to stop Air Asia from publishing misleading advertisements.

The hearing for the injunction, which is scheduled in Melbourne on March 2, is over complaints over ticket prices of the Malaysia-based budget air carrier. The complaints stem from alleged failure of Air Asia to show the full price of its tickets on its Web site.

The air carrier allegedly did not include all the taxes, duties, fees and other charges for its airfares, particularly its flights from Gold Coast in Melbourne and Perth.

The ACCC requires businesses that advertise a part of the price of a product or service to also specify a single total price which must be prominently shown in the advertisement.

Air Asia announced on Jan 18 the launch of a new service from Sydney to Kuala Lumpur with an introductory offer of a $99 one-way fare. The airline also offers a one-way ticket from Sydney to Bali for $159 and a one-way fare from Sydney to Phuket in Thailand for $139.

The daily trips from Sydney beginning April 2 are part of the 80 Asian destinations that Air Asia is dangling to Australian travelers at lower fares. The budget airline has existing trips to KL from the Gold Coast, Melbourne and Perth.

Due to the new Sydney service, Air Asia suspended operations to Europe and India for 2012 to concentrate on its Australasia, China, Taiwan, Japan and Korea operations.

The offer of Air Asia is expected to heat up the travel market in Australia following the announcement by Scoot, Singapore Airlines's budget carrier, of plans to offer competitive rates for Sydney to Singapore trips.

Meanwhile, flag carrier Qantas has one less headache following the endorsement by Fair Work Australia of the agreement between the airline and the aircraft engineers' union. The deal would provide for guaranteed industrial peace between the two for a period of three years ending in Dec 31, 2014.

Qantas needs to reach similar agreements with baggage carriers and pilots.