While browsing for air travel routes around Australia I discovered
Virgin Blue, one of the country's low fare / budget / no frills (delete as appropriate) airlines. Okay so I admit there's nothing novel about that given these airlines seem to be a dime a dozen these days - even
Aer Lingus, the Irish national carrier, re-structured itself and its business & pricing models to compete with (read: avoid getting wiped out by)
Ryanair and others of their kind.
The pricing model and strategy for such airlines seems to be that they publish a really low fare to get your attention (and your arse in the seat). Then as you advance through the booking process you realize that every passenger cost you can think of has been stripped out - handling charge or booking fee, airport tax, baggage fee, fuel surcharge, credit card fee - the list goes on. The latest one I've seen is the airport check-in fee. Some of these are more irritating than others.
When I originally started writing, I had intended simply to pose some rhetorical questions around fuel surcharges vs. the price of oil - but now that I'm thinking about it I feel a bit of a general industry rant coming on once I get done with that.
Fuel surcharge. As the price of oil began soaring to an all-time high of $147 a barrel last year, just about every airline was threatened and as a counter measure they sportingly passed the cost onto the consumer. Now, while Ryanair were implemented the model that others copied and I'll point the finger at for a lot of things, the fuel surcharge is one thing they did not do, though having said that I'm they covered it with some other charge - but I digress until later. I can accept the fuel surcharge in principle - if the cost of providing a service increases it's natural that the consumer purchase cost increases too. Here's where it gets interesting though. The price of oil has since plummeted, trading in the $33-$50 range at the time of writing. So shouldn't that generate the opposite impact on cost, with travel service providers lowering or even abolishing the fuel surcharge since oil prices are as low or lower than they were when it started? Last December, Virgin Blue
announced that it was ending its fuel surcharge on domestic flights and reducing it on international flights for (it claims) the "second time in as many months". I wonder if and how many others will do the same...
Handling charge / booking fee. It's become generally accepted that being able to purchase tickets (of any kind) early and not having to queue is classified as a privilege or premium service. I get that. Let's consider for a moment the flip side of this, why businesses invest in technology, it's to reduce the demand on, or for, human labour. In this particular case, if a business deploys a web site able to service X number of concurrent ticket purchases, they avoid needing to have (and pay for) Y people to front counter or phone sales, etc. The majority of ticket sales are now done online, not necessarily anymore because people CHOOSE to but because they NEED to if they're to stand a chance of getting a ticket at all. I put it to you that the premium service I alluded to earlier is now the standard/regular service, not to mention that businesses must surely recoup the development costs reasonably quickly from savings on wages and income from booking fees. That being true I wonder why punters still foot the bill for it a purported benefit that actually no longer exists.
Airport check-in fee. GRRRRR! This one is Ryanair-specific unless I've not spotted another airline doing it. Ryanair now charges you to check in at the airport, which you *must* do if you have luggage, which you also get charged for, so it's a double whammy. And there was no attempted explanation or justification as there was with the introduction of baggage charges. Let's do some simple maths. In 2008, Ryanair carried 58.7m passengers. The capacity of a "single class" Boeing 737-800 aircraft, of which makes up mostly if not entirely comprised, is 189 passengers. Keeping the calculations simple and the numbers conservative, let's round up to 200 passengers per [one-way] flight and assume that just a *quarter* of them must check in at the airport due to baggage - in reality the number checking in at the airport for one reason or another is higher (just ask any passenger standing in line to check-in while staff deal with passengers who've not prepaid their baggage). So that's 58.7m passengers * 0.25 airport check-in ratio * €5 charge = €78m! That's a lot of extra money earned through charging for a facility that is core to service delivery. I find it unfathomable that this hasn't been challenged by European bureaucracy yet, but even if it was, they [airline] would probably just invent another method to get this money...
Baggage charges. When these charges were introduced, they were heralded as a saving for a purported majority of passengers who allegedly travelled with cabin baggage only and were "subsidising" those who did have checked baggage. General seat prices would be reduced, with those who chose to bring checked baggage paying for the extra service. I actually did think this was a great thing, until my cynicism took over when I didn't see a difference. There's a conspiracy theory that a chef only needs to dip the [red wine] cork in the gravy to call it red wine sauce - in the same way I suppose an airline needs to make just one seat available at a cheaper price to be able to claim a price reduction. Then we come to the charges, X when you register your bag (online) before travelling otherwise it's Y which can be up to double the cost. I don't believe for a second that the labour, technology or any other cost, varies depending on the timing of when a customer deciding to check in a suitcase - the suitcase still goes on a conveyor belt, loaded on a trolley, then on the plane and offloaded at its destination. Oh but there's the staffing and effort required to process the bag at airport check in. GARBAGE! The customer is already PAYING for their airport check in, so I wonder what other spin can be put on it.
My parents visited me in Berlin from Dublin last year, flying with Ryanair. The charge for a suitcase each (don't forget the mandatory airport check in) came to €52 - that was €8 per baggage piece and €5 check-in fee per person per flight. I sent them off to Dunnes Stores to buy two small cabin sized suitcases at a total cost of €40 that they can use over again. At the time of writing, Ryanair now charges €10 for pre-booked baggage.Card payment fee. This is the other one that really grates with me - it actually doesn't only apply to airlines anymore - it seems every merchant is doing this now and in my opinion it should be considered unfair business practice. In addition to all the booking and handling charges, airlines (and increasingly other sellers) have started charging a fee for using a card to pay them. I am fine with passing on reasonable cost of sales to the customer, but I have two issues with this. Firstly, the charge (around €5 or equivalent) isn't per transaction, it's per sector per person. Consider a family of 4 taking a return flight, that's an additional €40 charge for paying with a credit card. This might go up or down if you travel with Virgin Blue, as apparently (in a similar vein to baggage charges), there's additional effort in accepting payment for international flights than domestic if you read between the lines of their
fees schedule. Which brings me to my second issue... for many airlines, payment by card the only option, particularly when purchasing online. If you're going to do that then GIVE CUSTOMERS AN ALTERNATIVE OPTION. Ryanair (and others I'm sure) renamed their credit card fee to read "payment handling fee", which to me reads like they'll charge regardless of payment method: so for example if you were to walk into their reservations center (assuming you can find one) and pay cash you might want to bring an extra couple of notes. It's a bit of a paradox really. A consumer must of course pay for a service to avail of it, but now they must pay the provider extra so they will accept their payment? I don't know about you, dear reader, but that's a new economic concept to me.
I know I've used Ryanair for many examples in this and I can just imagine the sort of public tongue lashing response their PR/media team would put out if and when they were to read it, lampooning both the author and the competition ("these are our terms, you're free to travel with whichever service you choose" ... sound familiar?) I express general observations and experience having been fortunate to travel quite a bit in my life so far. Many airlines now do the similar things and have similar practices - Ryanair was simply the innovator and it's said that imitation is the sincerest form of flattery, so I do tip my hat to them for their creativity. At the same time, I reserve the right to not necessarily have to like the results...
After all that, there's also an argument that Ryanair and airlines of their kind, unlike many others, are an easy target for criticism because they do itemize their charges to the extent they do. I acknowledge that and so, credit where it's due, there is transparency to the customer (even if it's generally not completely transparent until they come to pay). I don't doubt that all these businesses and industries are operating within legislation so I wonder perhaps if that's the root problem... lack of explicit, clear, consistent legislation on what is and isn't appropriate practice from the consumer's perspective. The general public seems to accept it all one way or another - again I'm not sure if that's out of choice or necessity - so perhaps I'm just blowing hot air this time! In any case...
Rant over. Class dismissed :-)