Ads ruling a blow for no-frills carriers

A COURT judgment in Germany could have a profound effect on the future of budget airlines in Europe after carriers were ordered to start offering customers more seats at the dirt-cheap prices they advertise.

The ruling in Hanover comes in a bad month for the no-frills carriers as Ryanair pulls out of a route in France over subsidies to regional airports and faces a courtroom challenge to fees it receives from another airport, Charleroi in Belgium.

The Green lobby in Germany is also asking the European Union for a Europewide tax on aviation spirit and a minimum ticket price in a bid to ground cheap airlines, whose boom it claims is destroying the environment.

Now comes the ruling from a German court that budget airlines must offer a minimum 10% of seats on all their flights at the cheapest rates they advertise. The court ruled that Hapag Lloyd Express, owned by tour giant TUI, misled customers.

Advertised flights from Germany to European destinations ranging from Paris to Venice for only e19.99 (£13.91) were few and far between, the court said. Many people miss out on cheap flights because no mention is made in the advertising of how few seats are available at the quoted rock-bottom price.

In the case of Hapag Lloyd Express, many consumer groups felt the advertising of some offers failed to inform the public adequately. The court upheld a suit brought by the Federal Association for Consumer Protection, which had accused the airline of running a misleading ad campaign. It said airlines that want to continue marketing themselves as budget carriers must offer every tenth seat at the advertised discount rate.

The ruling extends to airlines flying to Germany including easyJet and Ryanair.

Future advertisements must also disclose in detail the number of cheap seats available on each flight - the main cause of the dispute between Hapag and consumer protection groups.

The ruling may well turn out to be a yardstick in cases involving disputes over aggressive advertising, especially that of the cutthroat budget airline industry.

Hapag's advertising campaign for flights between Berlin and Cologne between 22 January and 4 March this year first attracted criticism. But during the civil proceedings, lawyers defending the company said that of the total of 384 flights made during that time on that route, more than 10% of capacity was allocated the cheapest seat price of e19.99. They added that the share of cheap places later rose to 22.5% of capacity.

However, the issue at the centre of the case was the advertising accompanying the offer, not the amount of seating actually available at the cheapest price.

Judge Ullrich Kleybolte issued a warning to other budget carriers, saying: 'Should the information concerning a capacity of cheap seats that total less that 10% of a plane's seats be missing from future advertising, then it will be treated as a misleading advertisement and deemed a 'decoy offer'.