European ultra low cost carrier Ryanair is known for its incredibly low base fares, and endless optional fees. Over time, the airline has faced quite a bit of regulatory scrutiny over how it does business.
Just last week I wrote about how the airline “reluctantly” updated its family seating policy, after facing scrutiny in the United Kingdom. Now the airline is potentially facing an even bigger challenge in Austria, as the country’s highest court may force the airline to make several updates to its pricing structure.
Austrian supreme court rules that Ryanair’s terms are unlawful
In recent times we’ve seen the Austrian Consumer Information Association (VKI) challenge aspects of Ryanair’s terms & conditions in court, and the case went all the way to the country’s supreme court.
The court has now ruled that 14 clauses in Ryanair’s terms & conditions are unlawful, and is requiring Ryanair to stop using the contested clauses in the country within three months. The main fee that was being challenged is Ryanair’s €55 airport check-in fee, which is quite controversial, naturally. Beyond that, though, the court also ruled that the €15 boarding pass fee, €25 infant fee, €70 oversized hand baggage fee, and €100 rebooking fee for missed flights, are all unfair and not transparent.
The consumer organization claims that those who paid these fees in the past are entitled to a refund, though Ryanair denies that claim, and I imagine that this isn’t the end of litigation that we’re going to see.
This ruling all centers around Ryanair violating Section 879(3) of the Austrian Civil Code (ABGB), which says the following:
“A contractual provision contained in general terms and conditions (Allgemeine Geschäftsbedingungen, AGB) or standard contract forms, which does not determine one of the principal obligations of the parties, is void in any event if, taking into account all the circumstances of the case, it places one party at a gross disadvantage.”
Will Ryanair have to radically alter its business model?
Ryanair is the most flown airline in Europe, and while it maybe doesn’t have the best reputation, people fly with the carrier for its nonstop routes, low fares, and reliability. While Ryanair is largely villainized for how its fares are structured, I personally kind of feel like there’s a bit of over regulation with the airline.
If you ask me, Ryanair is mostly transparent about what is and isn’t included with tickets. Just because the airline has an unconventional pricing model doesn’t mean there’s anything wrong with it, in my opinion. Now, let me say that I’m not a fan of some of Ryanair’s labor practices to keep costs down, but that’s a different topic, separate from this debate about consumer protection.
Anyway, Ryanair has long played hardball with regulators, and has sort of gone on the offense against them. However, it sure feels to me like Ryanair is facing an increasing amount of scrutiny which might really challenge the carrier’s approach to how it sells tickets.
For example, what if Ryanair is actually forced to comply with these new regulations within three months? As I see it, there are three ways this could play out:
- The airline could simply discontinue all flights to Austria, to send a message to other regulators, viewing this as an existential “line in the sand”
- The airline could update its policies across the board for all flights, but that would represent a radical departure from the Ryanair business model that people know
- The airline could simply update its rules for flights to and from Austria, which seems like it would create even more consumer confusion, and would likely only lead to other regulators following Austria’s lead
Between this and the European Union soon updating rules around how fares can be marketed (to require a carry-on with the advertised fare), I imagine there must be some cussing going on at Ryanair headquarters in Dublin.
Bottom line
The Austrian supreme court has ruled that many aspects of Ryanair’s terms & conditions are unlawful, including fees for airport check-in, printing boarding passes, and much more. The argument is that these terms put consumers at a gross disadvantage.
While Ryanair’s fee structure is disliked by many, that’s balanced by low base fares, and I personally think the airline is fairly transparent. Ryanair now has three months to update its rules for Austrian consumers, so I’m curious to see how this goes.
What do you make of Austria’s supreme court ruling on Ryanair?