The ECJ rules on how air fares should be published by EU carriers in order to comply with Regulation 1008/2008

By Rachel Welch-Phillips, Simon Phippard

11-2018

On 15 November 2018 the European Court of Justice issued a preliminary ruling concerning the interpretation of Article 2(18) and Article 23(1) of EC No 1008/2008 on common rules for the operation of air services (the “Regulation”). These articles relate to an airline’s obligations to display air fares in local currency and for the published fare to include all applicable conditions, charges, taxes and surcharges.

In September 2014, a customer of a German airline, Germanwings, booked a flight from London to Stuttgart using Germanwings’ website. The fare for the flight was indicated in pounds sterling only, and the invoice the customer received showed the fare and all charges in pounds sterling.

The customer notified a regional German consumer protection body, Verbraucherzentrale Baden-Wurttemberg eV, who brought proceedings for a prohibitory order against Germanwings in a regional court in Germany, which that court granted. Germanwings appealed to a higher regional court which allowed the appeal and referred the question of interpretation of the Regulation to the European Court of Justice.

The referring court questioned whether Article 23(1) should be interpreted to mean that air fares must, if not indicated in euros, be expressed in a particular local currency, or whether airlines can choose the relevant local currency. The Regulation does not contain an express obligation to indicate air fares in a specific currency, and it provides that airlines may set their air fares freely. However, the principle contained in the recitals to the Regulation that it should be possible for customers to effectively compare fares across different airlines would be compromised if airlines were given such a wide margin of discretion on how air fares are published.

The European Court of Justice ruled that Article 23(1) and Article 2(18) must be interpreted to mean that airlines who do not express their fares in euros are required to choose a local currency that is objectively linked to the service offered. This means it must be either the legal tender of the Member State of flight departure or that of the Member State of flight arrival. The Court made this ruling in order to preserve the core principle that comparability of price offerings must be maintained – by giving airlines wide discretion to choose the local currency would make comparing prices difficult if not impossible for the customer and deprive Article 23(1) of its effectiveness.