This was published 12 years ago
Fees make budget airlines more expensive than full-service rivals
Ryanair chief Michael O'Leary.Credit: AFP
Ryanair's latest additional charge – a £2 ($A3.04) fee that it says will go towards compensation it has paid for flight delays and cancellations – could earn it up to £150 million ($A228 million) in a year. That is nearly twice what the airline says it has paid out – almost £88 million – as a result of claims made following disruption caused by the volcanic ash cloud, heavy snow and a series of French and Spanish strikes.
Under European Union law, passengers whose flights have been cancelled or delayed are entitled to financial assistance from their airline, including compensation for accommodation. Ryanair says that claims have been so high that it must make provision for them.
An estimated 75 million journeys will be made with the airline in the next year. Although up to 20 per cent of tickets will be sold using "promotional" fares – which will not include the £2 fee, payable on the outbound flight and return – the charge is likely to bring in far more than the bill Ryanair says it was left with after last year's disruption.
Ryanair already earns up to £450 million a year through online check-in fees, at least £350 million through credit and debit card charges, and at least £320 million through baggage charges.
A spokesman for the airline said this week that the £2 charge would be reduced next year if the number of claims fell. He added, however, that, in the unlikely event of more disruption this year, it could rise.
Last month, Ryanair began charging £10 each way for reserving specific seats on routes from Dublin to Gatwick and Malaga.
James Fremantle, spokesman for the Aviation Consumer Advocacy Panel, a passenger watchdog, said that Ryanair's latest fee would add to the confusion passengers faced when booking a flight.
"Ultimately, this extra charge is just part of the fare," he said. "It's a way of marketing the fare to make it more attractive to customers."
He added that it was often difficult to ascertain whether a charge imposed by an airline represented the actual cost of providing a service. For example, Ryanair charges £6 per passenger per flight to process credit or debit card transactions (not including payments made using prepaid MasterCards), so a return trip for a family of four can incur a £48 "administration fee" for a single debit card transaction. EasyJet this week increased its transaction fee to £8 for debit cards, or £12.95 for credit cards. The cost of processing a debit card payment is estimated at 20p per transaction.
"There is nothing to stop airlines doing this," Mr Fremantle said. "But it makes it more confusing and time-consuming for anyone trying to find the cheapest price."
Research conducted by London's Daily Telegraph this week showed how the cost of a flight with a low-cost airline can escalate during the booking process. We searched for the cheapest return flights from London to Madrid for a family of four travelling on the same dates in August with two checked bags, a set of golf clubs and a travel cot, and paying using a debit card.
Ryanair and easyJet offered similar fares: £271.92 and £275.92, respectively, while British Airways' best offer was £476.20. However, once Ryanair's online check-in fees (£48), luggage fees (£80, plus £80 for golf clubs and £20 for the travel cot), administration fees (£48), and the new delay/cancellation levy (£16) were added, its flights cost £563.92, nearly £100 more than BA's. easyJet's extras added £111.25.
Should a family want to ensure they sit together, priority boarding costs £32 with Ryanair, or £80 with easyJet. BA allows passengers to choose their seats free of charge.
BA's luggage allowance is also 8kg greater than Ryanair's, and 3kg more generous than easyJet's, and BA offers free snacks and drinks, while its low-cost rivals charge nearly £5 for a sandwich and more than £2 for a cup of tea.
Ryanair is set to announce annual profits of £350 million in the coming weeks, up from £281 million.
Meanwhile, the low-cost airline Flybe has introduced a fuel surcharge of £3 per passenger on all bookings made for flight departing after August 31. It said the surcharge would be scrapped if the price of Brent crude oil - currently $121 a barrel - drops below $75 a barrel for four consecutive weeks.
The Telegraph, London
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