How sneaky add-ons make Ryanair and Easyjet £2.6bn a year

RYANAIR raked in £1.6 billion last year from more than 16 different ‘extras’ including baggage charges, leg room and even oxygen.

And Easyjet, which operates more than 1,000 flights a day, made £986 million in add- ons – so- called ‘ancillary revenue’ – up from £837 million in the previous year.

It works out as an extra £11.38 per seat, up from £10.48, and was around 22 per cent of Easyjet’s annual revenue. The huge sums are likely to infuriate passengers who have to pay for the ‘luxury’ of choosing their seats. Travellers have expressed anger at being bombarded with a range of ‘extras’ rather than a simple headline price for a flight.

Earlier this year, it emerged that some low-cost airlines have even started charging passengers to ensure they can keep hand luggage with them in the cabin. Rya-study nair’s ancillary revenues increased by 13 per cent, from £1.4 billion to £1.6 billion. It amounts to £13.06 per passenger.

It comes as a report by IdeaWorks Company, a US travel consultancy, projected that airline ancillary revenue will reach £62 billion worldwide in 2017 – a 264 per cent increase since 2010.

The study defines ancillary as any revenue generated beyond ticket sales and includes frequent flyer programme sales, and fees for checked bags, seats, wifi and paying with a credit card. It now accounts for 10.6 per cent of all airline revenue – up from 4.8 per cent seven years ago. The Idea Works found that ‘with few exceptions’, airlines are moving to ‘a la carte methods’ – where customers can choose add- ons ‘to provide more choices for consumers while boosting ancillary revenue’.

The report said that with continued growth, it was reasonable to suggest ancillary revenue will at some point exceed the airline industry’s annual fuel bill.

But it warned some airlines were taking it too far.

‘The economic boom of ancillary revenue has proven to be a highly useful tool to fix airline finances,’ the report said.

‘ It delivers profit- boosting results during times of severe economic distress, and works effectively to lift profits even higher when airlines are achieving investment-grade margins. But airlines should tread carefully. Good retail practice ensures the ability to easily remove unwanted products from a shopping cart and place them back on the shelf. But some carriers continue to treat ancillary revenue as an opportunity to simply charge new fees without creating a better product.’

Guy Anker, managing editor of Moneysavingexpert, said: ‘It is not just budget airlines using this tactic. The likes of BA use a similar model as Ryanair and Easyjet for European flights.

‘For short-haul flights, passengers often end up paying a fair chunk more than the headline price, whether that’s for baggage or making sure you sit next to your loved ones – or paying with a credit card.

‘Airlines are more explicit than they were a few years ago and these charges are no longer hidden. But they are still incredibly frustrating for passengers.

‘The only way to pay the lowest fares is to take only hand luggage, pay on debit card, sit wherever you’re put and take your own food.’

‘Opportunity to charge new fees’