New law forces airlines to display full price of flight deals on ads
Fasten your seat belts: plane fares are about to soar.
Well, not exactly. You will still be paying the same, only now you will know what you are in for as airlines will have to disclose all the hidden costs of flights in their advertisements.
Ads for air fares that until how have stripped out taxes and fuel surcharges to suggest flights are cheap will now have to state those costs clearly, under Hong Kong's new Trade Description Ordinance.
For example, a "special" HK$1,880 round trip ticket to Sydney that Virgin Atlantic launched last week actually tots up to HK$4,535 after factoring in HK$2,655 in taxes and fuel surcharges, which is stated in the disclaimer to the advertisement. In many cases, these charges are not even included in the disclaimer. From now on, however, they will have to be, if not included in the banner price itself.
The impact of stricter rules on supposed discounts and special prices, which came into effect on July 1, has already been felt in several other industries. It is now set to force a new level of transparency in the fiercely competitive airline sector just as the peak holiday period gets under way.
Cathay Pacific Airways said it would now provide a ballpark figure for taxes and surcharges in advertisements. In the past, Cathay ads would only state that fares are subject to applicable taxes and surcharges, without specifying the figures.
Qantas' Hong Kong general manager, Wyn Li, said it would put the all-inclusive price in its banner ads to make it even clearer - a practice mandatory in its home base of Australia.
Singapore enforced a similar system two years ago. Industry veterans said Singapore Airlines took a hit in the Hong Kong market when it started advertising the all-inclusive prices up front because its fares suddenly began to look far less appealing than those of Rivals.
Legislative Council member Wayne Yiu Si-wing said the 800-odd travel agencies in Hong Kong, which are general sales agents for airlines, will risk breaking the new law if they don't state the full prices to customers.
As the lowest air fares always fluctuate because of differences in booking classes and availability, Yiu said that he had "asked travel agents to be more careful in explaining [the rates] to their customers".