Online travel agency Webjet has been accused of misleading consumers and breaching consumer law by omitting compulsory fees when advertising flights, and stating flights had been booked when they had not yet been confirmed by an airline.
The allegations arrive as part of a court undertaking from the Australian Competition and Consumer Commission (ACCC), during which the consumer watchdog will seek penalties and consumer redress from Webjet Marketing Pty Ltd for allegedly making false and misleading representations to consumers about flight prices and bookings.
Webjet offers travel-related products and services from a range of different airlines, enabling consumers to compare and book flights, hotels, insurance and other travel products.
The ACCC alleged that between November 2018 and November 2023, Webjet promoted flights on its app, website, and in promotional emails as being available at or from a given price, without displaying additional compulsory fees which were later charged on each booking.
“The Webjet fees were charged by Webjet regardless of any choices made by the consumer during the booking process,” reads a Federal Court statement.
In an example given by the ACCC, Webjet advertised return flights to London at $1,398 – a figure which did not account for additional compulsory “Webjet servicing fees” and “booking price guarantees”.
Such fees ranged between $34.90 to $54.90 per booking depending on whether flights were domestic, New Zealand/Pacific flights, or other international flights.
Although some promoted prices were accompanied by an asterisk, the ACCC said information about Webjet fees was not displayed on the company’s app, website, or emails in a “sufficiently clear, prominent or proximate manner to neutralise the false, misleading or deceptive effect” of its price representations.
The commission further noted additional Webjet fees were not disclosed in Webjet’s social media posts – specifically on Facebook and Instagram – between 31 July 2019 and 30 October 2023.
“We know how much Australian consumers value air travel to stay connected for work, leisure or to visit family,” said ACCC chair Gina Cass-Gottlieb.
“During this time of cost pressures, many consumers are carefully considering travel arrangements and seeking to save money.
“A statement about the lowest price must be a true minimum price, not a price subject to further fees and charges before a booking can be made.”
Webjet says it 'takes compliance with Australian Consumer Law extremely seriously'. Image: Webjet / Facebook
False prices, false bookings
Webjet is further alleged to have breached consumer law by confirming flights were booked when they were in fact not locked with an airline.
Despite no flight having been confirmed for some 382 bookings, Webjet allegedly displayed a confirmation page and sent a confirmation email after taking payment.
“In these cases, Webjet later allegedly sought additional payment from the consumers to complete the booking, or offered the consumer a refund for the flight, despite having earlier confirmed the booking,” said the ACCC.
“Some consumers may have made and paid for other travel arrangements on the basis of the confirmation so may have had to choose between paying more money or cancelling other arrangements at a potential loss.”
Cass–Gottlieb said the commission was “very concerned” about the alleged conduct, before noting the ACCC was currently prioritising consumer and competition issues in the aviation sector.
The court action against Webjet arrives after Qantas was handed a $100 million fine in October for advertising thousands of tickets to already-cancelled flights.
“We remind all businesses, whether they are online retailers or bricks and mortar stores, that they need to comply with the Australian Consumer Law by not misleading consumers and displaying prices clearly, including hidden fees and surcharges,” said Cass–Gottlieb.
In an announcement to the Australian Securities Exchange (ASX), Webjet Group Limited acknowledged the ACCC proceedings.
“Webjet Marketing takes compliance with Australian Consumer Law extremely seriously and has always prided itself on its high levels of trust with all stakeholders, especially our customers,” the company said.
Despite its share price suffering an 8 per cent plunge following the ACCC’s announcement last Thursday, Webjet Group Ltd closed at a marked 21 per cent increase for the week.
