12 airlines agree to scrap surprise surcharges
Carriers to end last-minute fees by including debit card charges in headline price
Following stints with Reuters and the Press Association, Martin Hickman joined The Independent as a news editor in 2001. He became the Consumer Affairs Correspondent in September 2005 and has run the paper's trenchant campaigns on packaging, bank charges and factory-farmed chicken. He writes on subjects as diverse as food, finance, energy and fashion. With Tom Watson, he is author of a new book on the phone hacking scandal, Dial M for Murdoch - News Corporation and the Corruption of Britain.
Thursday 05 July 2012
Headline air fares are set to rise after 12 mostly ‘no frills’ airlines - including Ryanair and easyJet - headed off possible court action by scrapping penalty fees for paying by debit card.
Under a peace deal announced by the Office of Fair Trading today, the carriers will incorporate debit card surcharges into advertised prices rather than introducing them at the end of the booking process.
Surcharges for credit cards - which cost more to process - will still be allowed, but the airlines have promised to make those more transparent.
The airlines - Aer Lingus, BMI Baby, Eastern Airways, easyJet, Flybe, German Wings, Jet2, Lufthansa, Ryanair, Thomas Cook, Thomson and Wizz Air - are likely to raise their 'headline' fares to make up the lost revenue.
Most have already changed their pricing, advertising and websites; the others will change advertising this month and complete the changes over coming months.
Welcoming the deal, the Office of Fair Trading said that customers should not have to pay fees for using a debit card which it described as the “online equivalent of cash.”
Clive Maxwell, chief executive, said: “It is important that the cost presented when they search for a flight is realistic and that they are not surprised by extra charges.”
The OFT began investigating the debit card fees last March following a super-complaint from the consumer group Which? and had warned airlines to scrap the fees – or face court action.
Mr Maxwell said: “We made it clear from the start that we would use all of our enforcement powers, including court action if necessary, but are pleased to have reached agreement with the airlines before court proceedings were required.”
The fees are a costly hidden extra: Ryanair currently charges a £6 ‘administration fee’ for debit cards, adding £48 to a holiday for a family of four.
Sarah Brooks, director of financial services at Consumer Focus said: “Nothing is more frustrating for consumers than seeing a good online deal disappear on the final screen before booking.”
Over half of 4,500 people worldwide who had purchased an airline ticket online within the last 12 months told a recent survey by the card processing company WorldPay that they did not think surcharges were made clear enough by airlines, and 38 per cent expressed frustration at paying for using debit cards. The UK was the country where consumers were mostly likely to be sprung with last minute charges (41 per cent), ahead of Finland and Brazil.
Phil McGriskin, WorldPay’s chief product officer, said: “Customers understand that purchasing an airline ticket will involve associated taxes and charges but what really aggrieves them is a lack of transparency about what airlines are charging and why. It’s a positive step forward that airlines are pledging to be upfront about these costs.”
Peter Vicary-Smith, the chief executive of Which? - whose campaign was supported by 50,000 people - said it was important that credit card charges - which will remain - were clearly displayed throughout the booking process.
Last Christmas the Government promised to ban excessive surcharges for debit and credit charges by all travel companies by the end of this year.
Revealed: Devastating impact of 'bedroom tax' sees huge leap in demand for emergency hardship handouts for tenants
Notes from a small island: Is Sealand an independent 'micronation' or an illegal fortress?
You thought Ryanair's attendants had it bad? Wait 'til you hear about their pilots
Revealed: Eerie new images show forgotten French apartment that was abandoned at the outbreak of World War II and left untouched for 70 years
Chloe Johnson death: Family of five-year-old British girl who died in a pool at in Egypt's Sharm el-Sheikh resort 'angry' that more wasn't done to save her
- 1 Stoke City investigate 'religious abuse' after 'pig's head is found in Kenwyne Jones' locker'
- 2 Gove’s lesson: spare the comma, spoil the child
- 3 You thought Ryanair's attendants had it bad? Wait 'til you hear about their pilots
- 4 Join Ryanair! See the world! But we'll only pay you for nine months a year
- 5 It’s official: thanks to Stephen Hawking's Israel boycott, anti-Semitism is no more
BMF is the UK’s biggest and best loved outdoor fitness classes
Find out what The Independent's resident travel expert has to say about one of the most beautiful small cities in the world
Win anything from gadgets to five-star holidays on our competitions and offers page.
£30000 - £40000 per annum + BENS: Progressive Recruitment: Drupal Developer A ...
£45000 - £50000 per annum + bens: Progressive Recruitment: C# WEB DEVELOPER Le...
£240 - £260 per day: Progressive Recruitment: WPF Developer (C#, VB.Net) North...
£85 - £120 per day: Randstad Education Cheshire: KS2 teacher needed to do PPA ...