The Office of Fair Trading said that it had evidence of up to 30 different unfair terms that were written into contracts by airlines.
The OFT singled out the refusal by most airlines to allow tickets to be transferred from one passenger to another. John Bridgeman, the director- general of fair trading, said this rule was being applied "harshly, unbendingly and without good reason". He said it was a particular problem where scheduled flights were part of a package holiday such as a city break. In most cases these tickets are not refundable. So if a passenger is unable to go on the break because of ill-health, for instance, he or she cannot pass the ticket on to a friend or family member, nor is it possible to obtain a cash refund.
Other abuses highlighted by the OFT include the rescheduling of flights without warning or compensation and limits on the amount airlines are liable to pay if baggage is damaged during a flight.
The OFT's warning follows a complaint to the competition authorities from the Air Transport Users' Council against British Airways and Air France. The OFT stressed that although these two carriers had been named in the complaint, the practices complained of were common to all airlines that used standard contract terms drawn up by the International Air Transport Association (Iata).
Mr Bridgeman has now told Iata that contract terms must be reviewed and either amended or dropped if they unfairly disadvantage passengers. If necessary, the OFT would seek a High Court injunction to prevent the use of such conditions under the Unfair Terms in Consumer Contracts Regulations, which came into force in 1995. "The airlines have a number of excuses for such terms but I see no good reason why they should be allowed to continue," he added.
Simon Evans, industry affairs adviser to the Air Transport Users' Council, said it was delighted that the OFT was taking action. "This is exactly what we hoped would happen. There is now a clear determination to do something about these unfair terms of carriage." He said most complaints received by the council concerned the ability of airlines to reschedule flights with no advance notice or compensation. "It is quite a shock when a passenger goes into a travel agency and buys a ticket to fly with an airline at a particular time on a given day and then subsequently discovers it means absolutely nothing at all."
A BA spokesman said the airline had been working with Iata for two years to devise ticket contracts that were more "user-friendly" to passengers. "The OFT has raised a number of complex issues which need careful consideration. We want to work in a constructive way with the OFT to evaluate the validity of the points raised."
Since the Unfair Terms in Consumer Contracts Regulations came into force, the OFT has received 4,000 complaints. But a spokeswoman said it had not had to resort to court injunctions because companies usually amended contracts when a complaint was made.
The European Commission carried out an investigation into the Iata conditions of carriage in 1997 but was reluctant to take action, leaving it instead to individual member states. Mr Bridgeman said he regretted the initiative had fizzled out as fragmented action might not be so effective.