The Office of Fair Trading (OFT) has said that the charges airlines force customers into paying when using their debit or credit to purchase flights is ‘unfair’.
The ones everybody knows about are Easyjet and Ryanair. These two are constantly in the firing line when it comes to extortionate charges.
The OFT has launched an investigation into the issue which will last 90 days. They estimate that UK consumers have spent £300 million on payment surcharges during 2009. This incredible figure has been contributed to by the majority of the passengers on these airlines as they are unable to get around the charge when they are paying by debit or credit card.
Considerable evidence has been uncovered that travel companies are using what is called ‘drip-pricing’ practices for surcharges online. This is when consumers only find out about the extra charges once they have worked their way through all of the other web pages and input all of their details. All of a sudden the really cheap flight isn’t looking so cheap anymore – especially once you have added on baggage and priority boarding as well as the card fees.
Ryanair charge a £6 fee per journey so for two people it would cost £24 just in card fees. Easyjet charge £8 per transaction so quite a bit cheaper than Ryanair but still another added cost you don’t find out about until the end of your first purchase.
A couple go on holiday to Malta from 9th – 16th October flying with Ryanair, it costs them £123.96. Add the online check-in and EU261 Levy which you can’t escape from, and the total is £155.96. As long as you only take carry-on luggage and pay with a Pre-paid Mastercard then the total doesn’t budge. However, add the a 20kg suitcase each, priority boarding, travel insurance, SMS confirmation and paying by debit card, the total is now an incredible £325.30 – a whopping difference of £169.34. Travel insurance by itself was £24.34 and the two suitcases would cost £100.
The best way to avoid Ryanair’s charges is to get hold of a Pre-paid Mastercard. With these cards, you top them up first and then spend only what is on the card. From the case study above it will save you £24. (Check if the card issuer has any charges).
24/7 travel insurance is cheaper than Ryanair’s own travel insurance, only costing £19.26* for 8 days in Europe for a couple. So even if you have to pay the high charges with the airlines, check the prices of travel insurance elsewhere before you add it to your cart. It may be easier to click add but any money saved is worth it!
* Premium £19.26 includes Insurance Premium Tax based on an 2 x adults aged under 18-54 taking out a ‘Standard’ Single Trip 24/7 travel insurance policy including personal possessions cover in Europe. Cover details and prices are correct at time of going to press (11 July 2011) and are subject to change. You must read the policy wording to ensure you are familiar with your cover.