Tuesday, 4 February 2014

Airlines may freely determine checked-in luggage costs - AG Bot in Vueling Airlines (C-487/12)

After two weeks of holidays with limited internet access I have a bit of a catching up to do with the recent consumer law developments. I hope that our readers stayed up to date during my absence, but just in case this week posts will gradually aim at updating also your knowledge thereof. Starting with some CJEU developments...

23 January 2014: opinion of AG Bot in case Vueling Airlines (C-487/12)

Spanish law prohibits air carriers from charging for checking in passengers' baggage as an optional price supplement ("The carrier is required to carry passengers’ baggage with them, subject to weight limits, irrespective of the number of items, and size limits established by regulation, as part of the price of the ticket."). The CJEU was asked whether such a national provision was compatible with Art. 22 Regulation No. 1008/2008 which states that: "(...) Community air carriers and, on the basis of reciprocity, air carriers of third countries shall freely set air fares and air rates for intra-Community air services.". The issue arose due to Vueling adding a surcharge of EUR 40 to the base price of airlines tickets (EUR 241.48) bought by Ms Villegas when she checked in two pieces of luggage online. AG Bot considers Spanish law to be contrary to EU law on this matter.

AG Bot acknowledges that this question arose due to the increased operation on the air carriers market of low-cost carriers. Vueling, as one of them, offers its customers to conclude carriage contracts on various, customized conditions - in the basic option consumers would travel at the lowest price but any checked in baggage would have to be paid extra, while upgraded options are more expensive but cover travel with one checked in baggage within the ticket's price. (Par. 18-21) The question is whether consumer protection does not require the final price given to consumers to include all likely to be made costs, like the cost of the checked-in luggage? Or whether it should be left to the airlines to regulate their price structures as they want. 

AG Bot reminds that the EU legislatures was meant to liberalise the airline market and allow them complete freedom in setting 'air fares'. (Par. 33-34) Consumer protection interests only required that consumers were clearly and in detail informed about the service provided within the price, in order to facilitate comparison of various offers. (Par. 37) AG Bot argues that checked-in baggage requires processing, sorting, storing and delivery thereof by the airlines - costs of which services should be able to be redressed separately from a consumer. (Par. 49-50) Offering an optional price supplement for processing checked-in baggage is seen as also allowing the airlines to offer consumers such prices that are proportional to the services they requested. (Par. 53) If that freedom was not granted to the airlines, then consumers would be faced with having to pay raised ticket prices even if they were willing to travel only with a hand luggage. (Par. 58) Since hand-baggage remains the sole responsibility of consumers and forms part of their personal dignity (as their most precious and indispensable items), the airlines have to refrain from charging for carry-on baggage though. (Par. 54-55) 

AG Bot mentions that if the Court is of a different view as to the payment for checked-in baggage: "This would require the Court to define, for the 28 Member States of the European Union, the size and maximum allowed weight of baggage, taking into account the safety requirements for the type of aircraft likely to be used. It is clear, however, that such a decision aimed at defining the technical rules for checking in baggage goes beyond the powers and remit of the Court. ". (Par. 57) Quite a discouragement for the Court to take a different opinion in the case...

On the one hand the argument of consumers being able to pay less if they decide to travel with hand luggage only is sound and entices to see the cost of checked-in luggage as not forming part of the ticket price. On the other hand, it is hard to talk about ticket prices transparency if certain airlines would include checked-in luggage price in the base ticket price and some others would not do so - since the comparison websites do not always clearly indicate these differences. Maybe the cost of the checked-in luggage should be excluded from the calculation of ticket price for all airlines?

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