As anyone who has ever booked a flight on the budget airline Ryanair will know, what you see at first is seldom what you end up with. Credit card booking fees, charges for checking luggage, penalties for failing to check-in online and a host of other levies often drive up those headline cheap fares considerably.
So the question, given that none of these charges are illegal, is whether the manner in which Ryanair conducts its business is anyone else's concern. John Fingleton, the head of the Office of Fair Trading, suggests that it is. In an interview with this newspaper today Mr Fingleton describes Ryanair's charging system, with its proliferation of last-minute fees and opaque penalties, as "puerile" and "outside the spirit of the law". This seems like a shot across the bows for the airline. The OFT is in the middle of an investigation into online prices and advertising, which could spell trouble for Ryanair when it reports later this year. The regulator has certainly shown itself willing to take on the airline in the past. In 2006 it forced Ryanair to alter its contract terms over lost baggage. And last year, the OFT secured an agreement from the airline to increase the clarity of its website and emails over the small print on promotional offers.
The central issue now is price transparency. For any market to work well for consumers, prices need to be clear. Clear prices enable people to shop around for the best value. And the act of shopping around forces all providers to improve and compete on price. The argument made by some is that Ryanair's advertising and pricing practices are short-circuiting that mechanism of healthy competition.
Ryanair angrily counters that its vigorous cost-cutting over the years has been a great benefit for travellers, enabling them to fly far more cheaply than ever before. That might be so, but such services would not excuse the practice of misleading people now.
The fact that a business has benefited customers in the past is no guarantee that it will always do so. The OFT should ignore Ryanair's bluster and concentrate single-mindedly on the best interests of the consumer.Reuse content