The cost of a ‘bargain’ flight is often double the advertised price.
Q | What are the ancillary fees charged by airlines?
These are the ever-increasing number of extra (and unpopular) charges sprung on air passengers. They can be anything from added costs for checking in your bags to a charge for booking particular seats, and have become standard in the last few years. They are rarely visible until the point of sale and often mean the cost of a ‘bargain’ flight is double the advertised price.
Q | What sort of things am I being charged for?
So-called ‘a la carte’ services, like on-board food and drink sales, the checking of baggage, assigned or better seating, fast-track boarding, call centre support and credit card fees for purchases.
Q | Why? And what else?
Revenue from non-ticketed sources is big money boost for Europe’s low-cost carriers and is being used as a model worldwide by everyone from charter to scheduled carriers. ‘Commission-based’ ancillary fees include money earned by the airline on the sale of hotel rooms, car hire or insurance, or duty-free on board. The airline also gets revenue from frequent flier programmes by selling miles/points to partners like car hire firms or co-branded credit cards.
Q | How much?
Flybe and Ryanair were found to be two of the worst offenders in recent surveys by travel-tech provider Amadeus and US consultancy firm IdeaWorks. These and some other US airlines make 20% of their total revenue from ancillary charges. A good (or bad) example of what this costs passengers is EasyJet, which within the last year increased its infant fee from £15 to £20, upped its booking fee by £1 to £4.95 per passenger and increased its charges for cancelling or changing a booking. Even since the current OFT investigation (see below), the airline has imposed an £8 charge on passengers paying for flights with a debit card (previously £5.50). They are hardly the worst offenders, though – it currently costs £40 to check in a bag on a return flight with Ryanair and as much as £70 if you book over the phone.
Q | That’s extortionate!
Yes, and the Office of Fair Trading (OFT) agrees. The OFT has warned businesses to end ‘unwelcome surprises’ from ancillary charges and make their customer contracts clearer. It stated it would enforce regulations on companies not compiling with consumer law after a study of 4,000 adults found one in five had encountered a problem with these hidden charges within the last year. The OFT said airlines can earn ‘excess profits’ on charges for things like luggage and ‘have an incentive’ to hide these costs.
Q | Sounds good?
In theory, but airlines have been stripping services out of their basic fares and adding them in as ‘optional’ component charges for years without comeback. Which? is adding to the increasing backlash. The consumer watchdog launched a ‘Super Complaint’ against airlines over charges they impose on those paying for flights with debit or credit cards, forcing the OFT to launch its investigation. The results are due to be published this summer.
Update: Since this was written the OFT has put passenger travel companies on notice to change misleading debit and credit card surcharging practices or face enforcement action under consumer protection laws. Read the full release, announced on the 28 June.