With great fanfare last week, El Al Israel Airlines Ltd. (TASE: ELAL) announced that it would soon launch low-cost services to five European destinations, replacing standard flights. However, until El Al begins ticket sales for its low-cost carrier, Up, it is continuing the sale of full-priced tickets to these destinations - without notifying consumers that they are buying an outdated service: flights at prices and at terms that will not exist when the new brand is introduced.
In response, the Consumer Council today called on El Al to stop misleading consumers and creating confusion.
El Al's call center told "Globes" today that a round-trip ticket to Berlin in early April costs $637 - the current price - but will provide a seat upgrade on a low-cost flight. There is no refund on the difference between the full cost, sold under the camouflage of a scheduled flight, and the actual cost of a smart ticket. Asked if this was misleading, the sales rep said, "For the right to reserve a seat now on the flight, we must pay the full price."
The sales rep never mentioned, at her own initiative, the "minor" fact that the nature of the flights and their prices were about to change dramatically, and only responded to "Globes"' specific questions about the low-cost flights. "Had we not known about the upcoming change, insisted and asked about it, would you have allowed us to reserve a more expensive ticket without telling us about the upcoming change in flights?" we asked.
"If the customer wants to reserve a seat on the flight now, of course we will do it," the sales rep replied.
According to El Al, it is possible to reserve a seat at an extra cost of $70. It is also possible to cancel the ticket and receive a full refund. But what happens to a customer who discovers this too late, and cannot reserve a seat on an alternative flight? What if the alternative costs much more than the current fare, and what if the customer prefers business or first class, but finds himself on a different kind of flight altogether?
El Al is basically trapping its customers in its flight schedule, leaving open only a very problematic escape hatch, without any real options for comparison, and most of all, without transparency.
In its query to El Al, the Consumer Council states that the airline announced that, on March 30, 2014, it would begin flights by its Up brand to five destinations: Prague, Kiev, Budapest, Larnaca, and Berlin. Up will make at least 11 weekly flights to each destination, and up to 50 weekly flights altogether. Consumers can choose between just two kinds of tickets: basic and smart. For the basic fare, the one-way starting price is $69, on top of which there are charges for check-in, changing the ticket, luggage, in-flight food and beverages, blankets, earphones, and so on. The smart fare offers the right to take one piece of luggage and change the ticket terms at no charge, a full refund for a cancellation, and so on.
In practice, El Al is selling tickets to these destinations at the standard flight fare, including for flights after March 30.
"On the basis of media reports," says the Consumer Council, "there is concern that El Al intends to replace all its scheduled flights to the abovementioned destinations from March 30 with flights under the new brand, with all that that implies. If what is stated in the reports is true, then El Al is currently selling tickets at terms that will not exist when the flight is made. The Consumer Council's attempt to clarify what will happen to consumers who are now buying tickets for scheduled El Al flights to one of the abovementioned destinations after March 30 have been fruitless. The question we asked the sales reps has not been answered and El Al's representatives could not answer what the fate of the flight would be, whether it would be flown under the current format or the new one, what the actual cost would be, and how and when (even if) consumers will receive a refund, when the flight would be scheduled, and so forth.
"It is superfluous to mention that, under the Consumer Protection Law (5741-1981), someone offering a product or service must not only disclose every detail about the product, but must be confident that it can supply the product or service to the buyer at the same terms. It is the position of the Consumer Council that the sale of flight tickets includes not only the service of carrying the consumer from place to place, but also notification about the times, scale of the service, its quality, and so on. The sale of flight tickets, in the knowledge that not all its items will be supplied, harms the consumer and is therefore improper and liable to mislead the consumer in a forbidden way."
The Consumer Council emphasizes that a future conversion of the ticket to a cheaper ticket will not necessarily remedy the flaw of the sale of the ticket for a service with different terms. It is asking El Al to clarify the situation, including notifying consumers in advance of the terms that it will provide them, and to immediately notify all consumers who have already purchased tickets to the destinations after March 30. This includes assurances that the promised flights will be made, and to allow consumers, following the notification, to cancel the transaction if the new terms are unsuitable for them.
Published by Globes [online], Israel business news - www.globes-online.com - on December 3, 2013
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