Ryanair will change the way it advertises its services after being referred to the Office of Fair Trading (OFT) by advertising regulator the Advertising Standards Agency (ASA).
The ASA's Code of Practice does not have the force of law but the ASA can refer repeat breakers of the Code to the OFT. It referred Ryanair over its advertising and website, and the Irish airline has now agreed to change the way it communicates about the price of its services.
The OFT said that Ryanair has now agreed to provide clear information about its 'price guarantee'. When it claims to offer the lowest prices it has agreed to qualify that statement where necessary.
It has also agreed to give more prominence to extra costs such as those for checked-in baggage in email and web communications. Ryanair will also give more prominence in offers to information about when offers are not available and other offer-restricting information, the OFT said.
Ryanair had been the subject of several formal and informal complaints to the ASA. It said that it had to refer the cases to the OFT because of the company's "repeated breaches of the non-broadcast Advertising Code and for refusal to cooperate with the self-regulatory system".
Budget airlines which channel most of their bookings through their own websites have attracted regulatory scrutiny before. The European Commission said in December that it was going to step up scrutiny of companies to ensure they complied with its Air Services Regulations, which came into force last November.
Those regulations say that "optional price supplements shall be communicated in a clear, transparent and unambiguous way at the start of any booking process and their acceptance by the customer shall be on an ‘opt-in’ basis".
In December Ryanair and easyJet were both found to flout the Regulations by operating pre-checked boxes indicating consent for charges for insurance and checked-in luggage.
Ryanair no longer automatically pre-selects those services, but easyJet's UK website still does.
"Each flight you book will automatically include one hold bag (up to 20kg) per person for which a fee will be pre-selected. You may change this allowance on the next page," says easyJet.com's booking system.
"For your peace of mind we will also add travel insurance to your booking. If you wish not to take up this option or if you already have travel insurance, please remove it on the next page," it says.
The OFT said that it was not responsible for airlines and their websites complying with the Regulations. It also said that, unusually, there is actually no penalty for breaking the Regulations.
"As an EU Regulation the Air Services Regulation (ASR) carries the force of law in the UK and airlines should therefore comply with it," said an OFT spokesman. "However, UK legislation implementing sanctions for non-compliance with Article 23 of the ASR have yet to be put in place. This means that although the ASR has legal force it cannot be enforced."
"The Department for Transport is currently progressing the implementation of the relevant UK legislation, which will introduce sanctions for non compliance but it is unclear when it will come into effect," said the OFT spokesman. "We understand that the Civil Aviation Authority will be the primary enforcer of the ASR when sanctions are put in place."