Jetstar, Virgin fined over 'drip pricing'

WHY JETSTAR AND VIRGIN AUSTRALIA HAVE BEEN FINES:

* Federal Court proceedings were launched against the airlines in 2014 by the Australian Competition and Consumer Commission, which argued they were advertising prominent headline prices without adequately disclosing booking and service fees.

* Jetstar and Virgin had argued that fees were adequately disclosed before customers entered into binding purchases.

* The court found in 2015 that the airlines' use of "drip pricing" was misleading, deceptive and contravened Australian consumer law.

* On Tuesday the court issued its punishment, ordering Jetstar to pay a $545,000 penalty and Virgin Airlines to pay $200,000.

HOW DRIP PRICING WORKS:

* Drip pricing is where a headline price is advertised before an online purchase but extra fees and charges are introduced as the transaction progresses, according to the ACCC.

* For example, a customer might click on a flight advertised for $139, only to find when they reach payment that a $17 credit card booking and service fee applies.

* The ACCC says businesses can apply fees and charges but they cannot mislead you into paying these fees without telling you up front how much they will cost.