Simon Calder: The Man Who Pays His Way
In for a penny - but your flight could end up costing much more
Saturday 22 July 2006
Did you buy this newspaper on impulse, I wonder? Imagine you were walking past a newsagent's with a sign outside promising
The Independent for a penny. Once lured in, were you told that on top of the 1p price the vendor would need to charge 20p for the delivery cost of getting today's edition from the print works to his premises? On top of that, another 49p for the paper the issue is printed on. Funding the extravagant lifestyle of the travel editor requires a contribution of 30p. And how will you be paying - with cash? That's an extra 20p.
However preposterous that scenario may seem, it mirrors the behaviour of some airlines: adding a fanciful range of charges to the basic price of a flight, and then cheekily charging you extra for the privilege of paying for the thing.
This week, the EU's transport commissioner, Jacques Barrot, vowed to stamp out the practice. Airlines that offer flights for a penny or a pound will have to advertise the real fare, rather than applying a range of fanciful supplements that transform a loss-leader into a profitable transaction. Will it work? To judge, take a look back at how we got to where we are today.
In The olden days, up to a decade ago, many air fares were punitively expensive. But at least the quoted fare matched what you actually paid.
Ten years ago, the then-Chancellor, Kenneth Clarke, introduced Air Passenger Duty, adding £5 to the price of a European flight. "I decided that aviation was in an unusual position," Mr Clarke told me, "the only form of transport where no one was paying any tax on the fuel that it uses." The term "plus tax" soon emerged; we didn't like it, but at least it was a genuine, government-extracted levy.
The next twist was, strangely, tied in with the ending of duty-free sales within Europe in 1999. At the time airports and airlines, which made fat profits from selling us stuff we did not need, predicted the end of the world: higher fares, falling passenger numbers and 30,000 jobs lost. In fact, pretty much the exact opposite has occurred. But at the time, British Airways feared that the airport charges it paid would increase to compensate for the drop in retail income. Some bright spark suggested "separating out" the passenger service charge (PSC), a fee of between £5 and £10, and showing it as an addition to the fare. Then, the argument went, travellers would apportion responsibility for any increases to the airport, not BA.
An even brighter spark came up with the cunning plan of describing the PSC as a "new tax". British Airways soon had its knuckles rapped for this misleading claim, and to its considerable credit now quotes actual fares in all its ads and when you book online. Other airlines, though, soon latched on to the use of "taxes, fees and charges" as a way to boost their income and reduce their payments to travel agents; these elements did not earn the agent commission.
The Advertising Standards Authority says that ads should show the actual fare. But enforcement has proved patchy - especially with online ads - and airline revenue teams have devised ever more wily ways to earn extra cash.
Air Berlin, for example, has a flourishing domestic network in the UK, with fares as low as £19 each way. Yet when you come to pay the German airline for your chosen flight, a £4 supplement applies unless you use the airline's own MasterCard or pay by direct debit from an Austrian, Dutch or German bank. The rest of us - which includes just about every passenger shuttling between Belfast, Glasgow, Manchester and London - must hand over an extra £4, or 21 per cent, for the privilege of paying with our substandard British plastic.
The "everyone does it, so we must too" argument should vanish when the European Commission rules come into effect. I fear, though, that the exercise will be about as useful as M. Barrot's foray into passengers' rights. Last year, a tranche of legislation came into effect that stipulates levels of care during delays and compensation for cancelled flights. Yet the rules are so poorly drafted that some airlines are brazenly taking advantage of the many loopholes to avoid paying out to passengers: that explains why complaints to the Air Transport Users' Council have trebled in the past year. And even if misleading ads are stopped, remember that the bargain fares advertised will mostly apply to flights scheduled for dates and times when hardly anyone wants to travel.
Cut-Price Sun? Stay Home!
With many schools breaking up yesterday, Britain's holiday companies still have millions of unsold packages. The next few days could see a who-blinks-first contest between tour operators burdened with scarily perishable flight seats and hotel beds, and prospective customers who have yet to book.
How much, though, might you pay? Last weekend, the figure of £79 for a week's holiday in Turkey, including flights and accommodation, was widely quoted. It eluded my online search.
I did, however, find an internet deal for a week in Mallorca for £89, flying from Luton with First Choice. This is one of Britain's top holiday firms, and a member of the Association of British Travel Agents - whose rules insist that a holiday must be available at the quoted price. But anyone trying to book the trip would have found the price bumped up by £57-worth of unavoidable extras, a rise of 63 per cent. So much for "what you see is what you pay".
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