How the budget airlines rake in billions from extras
NO-FRILLS airline Ryanair is changing its baggage rules from next month, demanding customers pay £6 for priority boarding if they want to take a 10kg bag on board on top of hand luggage that fits under a seat. Budget carrier Wizz Air is also ramping up charges at the same time. It is asking passengers to pay up to €15 (£13) for priority boarding if they wish to take a 10kg carry-on case in addition to a small free bag measuring 40cm x 30cm x 20cm.
Previously both airlines often allowed small carry-on cases weighing up to 10kg to be taken on board for free.
These additional charges represent the latest bid by airlines to boost their so-called ‘ ancillary revenue’ – comprising charges from extras.
The lucrative ruses include charging a fee just for booking and demanding money if you check in at the airport instead of online in advance. If you want to pick a reserved seat to avoid a scrum when boarding you will have to pay and there is another charge for putting luggage in the hold.
Ryanair made almost £1.8 billion last year through the sale of add-ons. This accounted for 28 per cent of its revenue. But research indicates that the equivalent percentage for Wizz Air was 42 per cent.
EasyJet generated £1 billion from ancillary services – 19 per cent of total revenue – while at British Airways add-ons represented only 5 per cent of total revenue.
Jay Sorensen, company president of market researcher IdeaWorksCompany, says: ‘Lowcost carriers are fighting for market share – and they are doing this through deep price discounting. They then boost their income through applying lucrative add-ons.’
He adds: ‘Baggage and seat assignment fees are key areas that airlines focus on. We expect low-cost carriers to try to win more business travellers in the future with service bundle deals, which may include extra upgrades such as for priority boarding.’
The trick for travellers is to plan ahead and not be choosy about who they sit next to. Among the extra charges by airlines such as Ryanair are at least £15 for extra legroom, between £4 and £13 for an allocated seat and £20 for printing a boarding pass at the airport. The cost of priority boarding ahead of other passengers starts from £6 but people often pay more.
Baggage fees for budget airlines remain the biggest earner so pack light and always book online. Ryanair demands at least £25 to check in a 20kg suitcase online but if you wait until you get to the airport it is £40. Go over the baggage limit and it will cost £10 per extra kilogram.
EasyJet charges between £13.99 and £33.99 – depending on the flight – for a suitcase weighing up to 23kg, but if it weighs up to 15kg it is between £8.99 and £29.99.
Wizz Air charges between £13 and £65 for a 20kg bag depending on the route. Exceed this and there is a £9.50-a-kilogram excess baggage fee. As with other airlines, if you fail to book online, the cost of checking in luggage is higher – at least £56. If you are taking lots of heavy bags you will be better off using a courier service – which picks up your bags from home and drops them at your hotel. A service such as Send My Bag can send 30kg of luggage to Spain for £32 within three to four days. You could pay £125 for taking the bags on Ryanair.
Airlines can no longer charge for payment of a flight using a credit card but some, such as easyJet, still hit passengers with a £16 ‘administration fee.’ Double check everything when you book – and do it all online – to avoid crippling charges for making a mistake or being penalised at check-in. For example, changing a name online with Ryanair is £115 – or £160 at the airport. Check-in is free online but £55 at the airport. Lose your boarding pass on the way to the gate and it is a further £20.
Despite fees, the number of people opting for allocated seats has doubled. This is because the random allocation of seats means partners are sometimes sat away from each other. The number of customers paying for priority boarding has also risen fourfold for Ryanair as people attempt to avoid a scrum at the departure gate.
Hannah Maundrell, of consumer website Money, says: ‘Budget airlines are great if travelling light, but if you have luggage, want a decent seat and a free glass of wine, you are better off looking elsewhere.’ She adds: ‘Assume an airline will always try to generate more money t hrough s neaky charges. Seat allocation is a naughty extra but if you pack less you will make the most savings from using a budget airline.’
Ryanair says: ‘Over the past 18 months we have seen about half our customers reserve a seat. All optional extras are visible and transparent on our website. All fees are brought to customers’ attention and agreed prior to boarding.’