Friday, 6 May 2011

Ryanair to earn £1.25bn from extra ‘delay’ charge.


Ryanair’s latest additional charge – a £2 fee that it says will go towards compensation it has paid for flight delays and cancellations – could earn it up to £150 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 about £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.

Flying in the face of a recent Office of Fair Trading investigation which highlighted unreasonable booking fees, EasyJet has increased its fees.

It is the third increase in seven months for the low-cost airline, which now charges travellers £8 for booking their flights using a debit card, a rise from the old fee of £5.50.

Passengers paying for their flights using credit cards now have to fork out a booking fee of either £12.95 or £8 plus 2.5 per cent of the total cost of the flight – whichever is the highest.

Which?, the consumer magazine, complained to the Office of Fair Trading earlier this year, saying that, while some airlines were levying hefty fees, the actual cost of processing a credit or debit card transaction was just 20 pence.

Ryanair also increased its credit card charge in March and is now taking £6 per person, per flight. Both airlines waive the fees for travellers using cards such as Mastercard Prepaid or Visa Electron, both of which have partner agreements with the airlines.