AirAsia X will drop the use of pre-selected 'opt-out' services and change how it discloses processing fees when selling airline tickets online after being issued with a formal warning by the Commerce Commission.
The censure was issued over AirAsia X's flights from Auckland to the Gold Coast in March 2016, when the airline's advertised price for the flights didn't include a pre-selected checked baggage allowance and charged an unavoidable "processing fee."
"The Commerce Commission believes that in pre-selecting luggage at an extra cost to the advertised flight price, and not properly disclosing a mandatory processing fee, AirAsia was likely to have misled consumers over the price of its services," the regulator said in a statement.
The regulator's chair Mark Berry said AirAsia X had cooperated fully with its investigation, and changed its online booking process so luggage is opt-in and customers can avoid the processing fee by July this year after being contacted by the commission.
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The commission began investigating opt-out pricing last year prompting companies including Air New Zealand, House of Travel, Dash Tickets, Ticket Direct and Naked Bus to fall into line. Consumer NZ had also campaigned to end the practice of using pre-ticked boxes in online booking forms to add extras some travellers may not want, such as insurance.
In March, Jetstar finally agreed to drop the practice after the commission concluded there were grounds to prosecute the Qantas Airways subsidiary under the Fair Trading Act over its opt-out pricing practices.
The commission has no other ongoing investigations into opt-out pricing at this time, it said.