LONDON (Reuters) - Advertising watchdog on Wednesday criticised Irish airline Ryanair for promoting millions of "zero fare" flights that actually cost passengers up to 21.70 pounds.

The Advertising Standards Authority (ASA) said the low-cost airline should have made clear that people would have to pay taxes and other charges on all tickets.

It upheld a complaint from Ryanair's rival Monarch Airlines and ordered the Dublin-based company to drop the TV commercials.

In a written adjudication, the ASA said Ryanair breached its code because the charges on each ticket were "non-optional".

Ryanair's "amazing autumn sale" commercials promised "Four Million Zero Fare Seats". Small print at the bottom of the screen said taxes and charges applied.

Ryanair had no immediate comment.

The airline has fallen foul of the ASA before.

In May, the watchdog upheld a complaint about an advert for three million free tickets because it failed to make clear that the offer did not include flights on Fridays.

In 2004, it rapped a promotion offering "giveaway" flights because passengers would have to pay charges and taxes.

The European Union's top regulator said in July it planned to clamp down on misleading air fares.

Under the European Commission proposals, airlines would have to be more transparent about the final price passengers pay.

Not that I'm a fan of Ryanair, but in fairness to it the government and related agencies are the ones charging the fees, not to mention that other, non-airline-related goods and services are generally advertised without many of the required taxes factored into their prices. In part, this is because of the complexity of the tax structure, plus taxpayers deserve to see just how much they're being dinged.

I'd love to have the government and airports publish a breakdown of just what they are spending the money on. In regular-sized print, at that.

I disagree. Taxes and charges are part and parcel of doing business. Quote me the whole price, not just the bit that makes you look good so I can make an informed and sensible purchasing decision.

Exactly and "other charges" can often mean the airlines own levies for fuel etc. However having said that most people dont complain when airlines quote a fare of $1799* with the fineprint at the bottom saying taxes and charges apply which can often be $300-400....

Hang on, I didn't say 'other charges' I said fees of 'related agencies' by which I was referriing to airport fees and taxes that are levied by agencies, fully independent of the airline, *that have authority to levy taxes or tax-like fees* (e.g. airport security taxes, etc.) Fuel surcharges, I agree, are not 'taxes' by the proper definition of the word, and not to quote these intrinsic to the price is misleading. Also, for those cases where the price only applies to a round-trip (as opposed to Ryanair, which sells strictly on a point-to-point basis) the price advertised should be for the full round-trip, none of this 'half round-trip' foolishness.

I also do not dispute that of course, the QUOTE (as opposed to the advertised price) will include the final taxes and fees; however I stick to my point that due to the constant flux of taxes, and regional variation, it is fair for the supplier's price to be ADVERTISED separately (which is not the same thing as not advertising anything about forthcoming taxes, etc. at all.)

Now, just what should be advertised in the way of taxes gets tricky. Consider:

Gizmo sold at Canadian Tire (national hardware store chain): $49.99

HST (Harmonized Sales Tax, meaning Provincial Sales Tax is grouped with the federal GST or Goods and Services Tax; it applies in my province, unlike say Ontario which hasn't adopted HST but where GST of 6 per cent and PST of x per cent applies separately.) - in my province of 14 per cent of $49.99 = $7.00
Total cost in my province = $56.99

In Ontario, proviincial sales tax rates vary from 5 to 12 per cent, depending on the nature of the good or service, so total tax (GST + PST) varies from 11 to 18 per cent (from 5 + 6 or 12 + 6 per cent, respectively) so total cost of same good, even if supplier sticks to a consistent national price policy, could be quite different.

Also, taxes and fees vary constantly, outside the control of the supplier. Example: Until very recently the HST in my province was 15, not 14 per cent hence any advertised prices including said tax then would be similarly misleading (for once, on the high side.)

Airfares get even more complex because GST/HST currently applies only on domestic airfares, not on international or transborder (destination US) ones.

So, in the interest of consistent pricing policy, not to mention logistical realitiess, separate pricing is reasonable, IMO - even given that obviously, Ryanair is subject to different tax structures as it doesn't operate in Canada.

Actually, thinking about it I can even see why fuel costs might be reasonable to be itemized separately (reasonable not being, of course, the same thing as convenient for the consumer). It might be reasonable to do so in the instance that the airline is not able to negotiate a fixed price contract with the fuel supplier for even a short period of time (say a few months. ) This seems the likely case, given the recent extreme volatility of crude oil prices. In contrast, durable goods like the aircraft itself, or labour contracts, etc., can be negotiated for certain fixed periods of time, so those aspects of an airline's costs are more predictable and thus the airline has less excuse for varying the price so much that a price inclusive of these aspects can't be advertised.

On the contrary, I think that this is primarily a US/Canadian thing. Everywhere else that I can be bothered to remember includes sales taxes etc in the sticker price (apart from products market exclusively to businesses which reclaim sales tax).

Afraid it shows you come from Canada. Those travelling from other parts of the world find the US/Canadian habit of adding one or more taxes to the quoted price very annoying.

Here in Europe (where Ryanair exclusively operate) retail prices are almost always shown as the total price. Air travel is one of the few exceptions and it is not apparent how they were allowed to start doing so (it wasn't always like this) or to get away with it now.

In the UK the tax on air travel within the EC is �5 each way. Ryanair choose to charge arbitrary greater amounts and call it "taxes and fees".

Airport charges are not a tax, just like fuel, wheelchair services for the disabled, credit card charges etc are not. The point made in this case is that if Ryanair require �21.70 from you to provide a ticket, they should state in their advertising that it will cost you �21.70. Not zero.

simpleflyer, I presume you either haven't flown on Ryanair or you have but haven't examined their list of extra charges.

Yes, they do include government taxes and passenger service charges levied by airports (the latter is something that some airlines include in their fares but most show as an extra). However, they also include something described on the itinearary as a "Aviation / WCHR Levy" (EUR 11.08 on a ticket I just booked) which is fee charged by the airline, not by any outside agencies, and which constitutes each passenger's share of the the cost that Ryanair claims it incurs in transporting passengers with disabilities. (They used to charge disabled people extra for providing them with things like wheelchairs and airport escorts, this was ruled illegal so they are now making everybody pay more - which I wouldn't object to if it was part of the fare, but what gets me the fact that they claim it's something imposed on them by outside agencies)

All of that's irrelevant. The website can figure out the taxes levied by each country according to the point of origin. Why on earth would we follow the North American example of �0.01 + tax and charges when a simple �19.99 will do?

In the UK (and probably the rest of the EU) its a matter of law that prices for goods and most services are displayed including VAT and other taxes/charges. For example in the case of goods this currently set out in the Price Marking Order 2004 (SI 102, 2004) which is delegated a delegated power under s4(3) Prices Act 1974.

There are some exceptions, eg for B2B transactions and certain kinds of service, eg airtravel. But you still can't be misleading.

The above and other provisions have driven the expectation amongst consumers that the price you see is the price you pay. Other bodies (such as the Advertising Standards Authority) have quasi-judicial powers and generally regard it as misleading if the fully-inclusive price isn't shown to a consumer even if legally the supplier is entitled to do so.

As a consumer I find it much simpler if prices shown are fully inclusive. However I can't help thinking that if UK consumers were more aware of the amount of indirect tax they were paying at the point they pay it, they'd hold governments more accountable for the expenditure.

What gets me even more is that this in no way is related to the actual cost of providing wheelchairs. It's just a way for them to increase effective ticket prices without increasing the advertised price and lash out at disability rights groups as well. Keep in mind that the wheelchair charge before was GBP 18. Are one in three passengers in wheelchairs? I don't think so.

First, nothing like a discussion on taxes/prices to get a spirited discussion going.

I concede my ignorance of British tax structure, to say nothing of consumer law, and yes, as a visitor I do like having hotel prices, for example, include the VAT. And yes, I'm operating out of familiarity with our own local sales tax structure, which I agree is nightmarishly complicated. (Our system isn't even consistent: for example, taxes on gas and alcohol, which apply in addition to sales taxes, are embedded in the price of the product.)

That said, the argument we are having isn't resolved by stressing that the 'price you see [ought to be] the price you should pay', since what is a price and what isn't forms the basis of much of our discussion in the first place.

So, what is a price? A fair price is supposed to be one that is set in a freely competitive market - but can governments be said to operate in a competitive market? (One is not free to shop around for a different government with which to do business - at least, that's the theory....) For that matter, can airports, given that many are monopolies, be said to operate in free/fair markets? And if a large portion of an airline's costs consists of taxes and fees levied by agencies not operating in a fair market, to what extent should airlines be held accountable to rules about pricing and advertising that properly apply only in fair markets? In other words, the airlines don't get any assurances that 'the tax rate you see today is the tax you will be required to pay tomorrow'; since airports and governments operate independently of each other, they are free to change their terms unilaterally at any time. This is a significant issue, given that airline margins these days can be extremely small - profit or loss depends on the airline's ability to predict, pretty closely, what their costs will be.

So to some extent - I stress, to some extent (for yes, I know well they abuse the practice) - I see airlines resorting to listing taxes/fees separately from their base costs as reasonable, if not exactly convenient for the consumer.

Meanwhile, there are also practical considerations to publishing fee-inclusive prices by services that are heavily taxed and monitored, as indeed airlines are. If airfares are to be published in nondynamic media such as print newspapers, as opposed to dynamic media such as Internet web sites, then the airline has no way to advertise as USflyer suggests, by going to a database and pulling up a price to suit.

I agree with the other posters that it is irrelevant. Over and above that, according to your logic, taxi drivers should be able to state a price and then add fuel charges on top of that due to the volatility of fuel and inability to set a stable price??

I think it's ludicrous to suggest that a business should be able to break out pricing and surcharges in accordance with their business model and variable and fixed costs.

simpleflyer - no offense, but that's just hot air. Just like in almost any other market, 99% of passengers don't care how the cost is split between the airline, the state, and the airport, they just care how much it costs them. The other 1% can go and look it up if they're really interested.

Plenty of manufacturers have volatile input costs, but they still manage to give a total price.