Thursday, 15 November 2018

In which currencies should air fares be displayed online? CJEU in C-330/17 Germanwings

We would like to draw the attention of our readers to several interesting judgments and opinions published today at the Court of Justice. One of them concerns the case C-330/17 Verbraucherzentrale Baden-Württemberg v. Germanwings, in which the Court of Justice elaborated on conditions for price transparency under Regulation 1008/2008 on common rules for the operation of air services in the Community.

The dispute was rather simple. The prices of connections between London and Stuttgart operated by Germanwings were expressed in pounds, not euros. A German consumer protection organisation didn't like it and applied for an injunction. The claim was successful in the court of first instance, but the court of appeal disagreed and eventually the case was referred to the CJEU. The Federal Supreme Court wanted to know whether an assessment of the currency in which air fares are to be displayed should be based on particular parameters. 

Legal framework

To recall, pursuant to Article 23(1) of Regulation 1008/2008 "air fares and air rates available to the general public shall include the applicable conditions when offered or published in any form, including on the Internet, for air services from an airport located in the territory of a Member State to which the Treaty applies. The final price to be paid shall at all times be indicated and shall include the applicable air fare or air rate as well as all applicable taxes, and charges, surcharges and fees which are unavoidable and foreseeable at the time of publication". There is no mention of the relevant currency, other than in Article 2(18) which defines ‘air fares’ as "the prices expressed in euro or in local currency to be paid to air carriers or their agents or other ticket sellers for the carriage of passengers on air services and any conditions under which those prices apply, including remuneration and conditions offered to agency and other auxiliary services".

Judgment of the Court

It is understandable that a German passenger flying to Germany might prefer to have the air fare displayed in his local currency when booking his ticket online. However, as rightly pointed out by the Advocate-General and confirmed today by the Court, any such right is not reflected in the interpreted rules. A reference to Rome I regulation on applicable law did not seem justified, either. Eventually, the consumer organisation found no allies in Luxembourg.

There are some differences between the AG's opinion and today's judgment, though. Most notably, while the Advocate-General proposed that the Court steps away and leaves air carriers a margin of discretion, the Court did not show as much judicial restraint. According to the today's judgment, air carriers who do not express air fares in euros are required to choose a local currency that is objectively linked to the service offered. This is the case in particular for the currency of the Member State in which the place of departure or arrival is located.

Two observations

The case is not ground-breaking and the judgment appears to be well-balanced. There is really not much one can say against it. Coming from Poland, a non-eurozone member where complaining is a national discipline, I will nevertheless take a shot.

It is useful to take a step back and note that the entire discussion in the case at hand as to what local currency can be used to express air fares is secondary: it only becomes relevant if an air carrier chose not to express its fares in euros. In other words: displaying air fares in euros is always a good option - also when one travels between non-eurozone countries (so it seems).

To be sure, this is not entirely without justification. Following AG, the Court considered the background story behind the interpreted rules and observed that the previous version of the regulation made reference to ecu. Unlike euro, ecu was not a local currency for any Member State, but rather a common standard used to improve price comparability. This implies that it is not passenger protection that lies at the heart of the interpreted regulation, or at least not in the sense of ensuring that passengers are able to view and then pay the price in a currency to which their journey is related. The emphasis rather lies on price comparability - and to that end, a uniform comparator is preferable.

I do not quite remember the times when air fares were displayed in ecus (or perhaps there wasn't much to miss), but I can hardly imagine them being expressed in ecus only. This brings me to my second thought or rather lack of comprehension why, in the digital age, we are still in need of having this discussion at all (instead of focusing on other questions such as dynamic pricing). When flying from a non-eurozone to a eurozone country (or vice versa) or between non-eurozone countries couldn't one simply have a choice between the respective two currencies? I have already observed this in the market practice, at least of some air carriers. The technology, of course, offers an even broader range of options. One could think of a currency of the country of passenger's residence, as advocated by the German consumer organisation. The privacy concerns arising from such a solution are fairly obvious, though. All in all, a technological response could be preferable; however, for everyone's sake, let us not overcomplicate things.

1 comment:

  1. "All in all, a technological response could be preferable; however, for everyone's sake, let us not overcomplicate things." <3