Airline surcharges flying high
If you have flown in recent months you will inevitably have been hit with a number of fees and surcharges. From a booking or administration fee, to the cost of checking in your bags at the airport – flying can set you back.
It might come as little surprise, then, to learn that some airlines have increased their debit card surcharges by more than 1,000%. No, I haven’t added an extra zero onto that by mistake.
Research by consumer watchdog Which? has uncovered the true cost of paying plastic. It found that between 2004 and 2011, when the consumer price index increased by 24%, Flybe increased its surcharge prices by 1,025% and Ryanair by 1,400%.
Payments by debit card used to be free for Easyjet in 2004 and now cost £8, says Which? The airline has also increased the cost of its credit card payments by 50%. Meanwhile British Airways has gone from offering all payments for free, to charging £4.50 for credit cards. The company has kept debit card payments free of charge. BMI increased its credit card charge by 12.5% but does not charge for debit cards.
Unsurprisingly, given how many people pay by plastic, these surcharges quickly rack up considerable sums for airlines. According to Which? £43,460,000 has been spent on debit card airline surcharges since June.
Figures from the UK Cards Association show around 61% of flight purchases are made using a credit card, and 39% using a debit card. Nine of 28 UK-based airlines charge for using a debit or electron card. When figures for passenger uplift, provided by the Civil Aviation Authority, are taken into account, the estimated income received from debit card surcharges stands at more than £97m a year – or £265k a day, says Which?
So is it right that airlines impose such a hefty surcharge? The watchdog’s executive director Richard Lloyd thinks not: “There’s no justification for airlines to charge £9 for something that costs the business about 20p,” he said.
On its website, Flybe maintains that processing plastic is a costly exercise: “To defray the substantial administration and financial services costs we incur when processing credit and debit cards a transaction fee and where applicable a credit card supplement may apply to each passenger per one way flight.”
But Which? doesn’t agree: “We think the real cost of processing a credit card transaction is no more than two percent of the value of the purchase. Retailers often charge a fixed value – so you could end paying more than the true cost.”
Which? lodged a super complaint with the Office of Fair Trading (OFT) in March, calling for an investigation into excessive surcharges for paying by debit or credit card. But while the body upheld the complaint, and vowed to introduce enforcement measures under the Consumer Protection Regulations to take action against companies who are not transparent about their surcharges for paying by card, Which? argues surcharges should be banned altogether.
The watchdog acknowledges that when the Consumer Rights Directive comes into force within the next two years, companies who issue surcharges that are not reflective of the true cost of processing a transaction could face legal action. But Which? maintains the Treasury could make an immediate difference to consumers’ lives by scrapping debit card surcharges in the UK, by amending the Payment Services Regulations.
Principles aside – with a multitude of other expenses to cover when flying, such as Air Passenger Duty and fuel duty, can we afford to fork out simply for using plastic? Easyjet charges a £10 per kilo excess baggage fee, while Ryanair will demand £25 to check in a 20kg bag in the low season. If you’re in the unfortunate position of having to change your flight, Ryanair will land you with a £50 fee one way, and it’ll cost you £110 to change a passenger’s name on a booking.
And who could forget the airline’s mooted plan back in 2009 to charge passengers for using the toilet? In October this year Ryanair again left passengers stunned when it announced it was considering reducing the number of lavatories to just one per aircraft.
The plan would see 189 passengers per flight sharing one toilet. Defending the proposal, chief executive Michael O’Leary told this newspaper: “It would fundamentally lower air fares by about five per cent for all passengers” – cutting £2 from a typical £40 ticket. “We very rarely use all three toilets on board our aircraft anyway,” he added.
Picture:ReutersTagged in: airlines, british airways, EasyJet, Flybe, Ryanair, surcharges, Which?
Latest from Independent journalists on Twitter