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Airlines' extra charges continue to soar
23 October 2010 @ 13:52

Airlines are expected to collect more than £16.2 billion in “ancillary” revenues this year, including fees for checked baggage and credit card transactions, an increase of nearly £6.5 billion on 2009.

The findings were revealed in a new study by Amadeus, a travel technology provider whose clients include British Airways and Flybe, and its partner, the US consultancy firm IdeaWorks.

Jay Sorensen, president of IdeaWorks, said the rises were largely driven by new baggage charges and priority boarding fees, and predicted that the figure could quadruple to £65.9 billion.

The study found that Flybe, Ryanair, US-based Spirit Air and Tiger Airways, based in Singapore, generate the most from ancillary charges – an average of nearly 20 per cent of their total revenue.

It also highlighted the actions of traditional carriers, including British Airways, which has increased fees for excess baggage and introduced controversial charges for seat selection.

“Airlines worldwide are embracing a la carte fees, and by every measure, the ancillary revenue movement is gaining strength,” said Mr Sorensen.

He suggested that baggage fees were likely to grow, and free meals in economy class cabins could disappear entirely.

“The success of ancillary revenues enables carriers operating under the low cost business model, such as Flybe, to keep the basic price of their tickets low with passengers only paying for the services they actually use,” said a spokesperson for Flybe.

James Fremantle, a spokesman for the Air Transport Users Council, said he was concerned about the scale of the predicted increases.

“Although we have no problem with charging for optional services, there’s obviously a limit to how far it can go,” he said. “You could argue that it benefits some travellers, but it is bad news for families.”

This week easyJet increased its infant fee from £15 to £20, its booking fee from £3.95 to £4.95, and raised its charges for cancelling or making changes to a booking. It currently costs £30 to check in a bag on a return flight with Ryanair (or £70 if you book it over the phone).

Mr Fremantle also urged airlines to improve the transparency of their pricing, and said that all non-optional charges should be included in the headline fare.

Article 23 of the European Commission’s Air Services Regulation, which was updated in 2008, states that “the final price to be paid shall at all times be indicated” and should include all taxes and charges “which are unavoidable”. However, there is currently no UK legislation to enforce this regulation.

A spokesperson for the Department for Transport said: “We consulted earlier this year on proposals which would give the Civil Aviation Authority and Office of Fair Trading enforcement powers for this regulation, and introduce penalties for non-compliance. We expect to make an announcement on this in the near future”.

Source: The Telegraph



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