ASA Adjudication on KLM Royal Dutch Airlines

Ad

A promotional e-mail from KLM was entitled "Europe on sale from £129*!" The body of the e-mail listed ten European cities, each of which had "from £129" and "Book now" buttons alongside. A footnote stated "*All fares are for return flights from London Heathrow and correct at time of broadcast 03.10.08. Book by 15.10.08. Travel periods may vary and prices are subject to availability. Please check www.klm.com for more details."

Issue

The complainant, who was unable to find any flights for £129 on the day he received the e-mail, challenged the availability of flights at £129.

CAP Code (Edition 11)

Response

KLM Royal Dutch Airlines (KLM) said the the price of £129 comprised a £16 KLM fare, £52 KLM fuel surcharge and £10 London Heathrow passenger duty.  The remainder of the price was made up of certain variable elements such as London Heathrow and Netherlands passenger service charges, Dutch noise and security taxes and the local passenger charges of the destination country.  They explained that the variable items were taxes imposed by various governments and were subject to change.  Most could be anticipated in advance and could therefore be built into the final price with some certainty, but they could also be increased or decreased by the relevant government authority at any time and sometimes at short notice.  KLM added that the European tax could also change because of the fluctuation in the Euro/Sterling exchange rate.  

They sent a selection of bookings made on their website during the promotional period.  They said the data showed that the fare for more than 50% of the bookings was £16, the remainder of the price being made up of fixed and variable taxes.  In some cases the fare dropped to £15 or £12, to anticipate a rise in taxes, and in two instances it increased to £17 to maintain the £129 price for destinations where taxes were slightly lower than other destinations.  They said, while the KLM fare of £16 remained constant or lower in 93% of the sample bookings they sent, regardless of the date of travel, the exact price of £129 could not be guaranteed.  They argued that the fare structure was not misleading because the promotional e-mail gave an indication of possible price variations. They nevertheless gave an assurance that in future they would ensure that any promotional offers could be satisfied and would contain wording that specifically stated that variations in tax and exchange rates could impact on the total price payable.

Assessment

Upheld

The ASA noted KLM sent a selection of bookings made on their website, but were unable to access bookings made via agents.  We also noted, from the sample bookings, fares ranged from £128.70 to £149.78, with only three of the 32 fares at £129 or below and the average fare being £136.35.  We noted, furthermore, the data sent related to sold prices for a selection of tickets and not to general availability at the promotional price.  We noted KLMs argument about fluctuating taxes and charges and that the e-mail stated "prices are subject to availability".  However, because we had not seen evidence to show that a reasonable proportion of flights to any of the destinations was available at £129, we concluded that the ad was likely to mislead.

The ad breached CAP Code clauses 3.1 (Substantiation), 7.1, 7.2 (Truthfulness), 15.4 (Prices) and 16.4 (Availability).

Action

The ad must not appear again in its current form.  We told KLM to ensure that in future promotions they could demonstrate sufficient availability of flights at the "from" price.

Adjudication of the ASA Council (Non-broadcast)