EU considers scrapping airline surcharges

[Neptunus Rex]

From today's press

Ho Hum!

Let's hope they do. Paying 48 quid for a ticket, then another 40 because you don't have the "correct" payment card is plain thievery.

Make the con men of the airlines "say what's on the ticket." What happened to the Advertising Standards Law?

Then let the travelling public pay a reasonable price for their air fares and perhaps those who work for airlines could earn a decent salary.

[farci]

From today's press

Reference, please?

[PAXboy]

If it's true - then just another example of the old guard getting in a lather about the new century. If they want a set of controlled prices, with a cartel of govts setting the prices and no innovation - then they can state that. But if they want a free market (i.e. what the whole of Europe does every day) then you have to let the market do it's thing.

Much better to teach young people to deal with reality than to try and change reality because it's not what you had when you were a kid.

[ExXB]

I'm all in favour of 'unbundling' and would not like to see the EC require prices to be quoted including optional charges.

The only thing I would like to see regulated is the scam of saying credit/debit card fees are optional because the said company offers one option, that is difficult for anyone to take up, that is free.

I'm not sure what the magic solution to this but I suggest that credit/debit card fees be included in the price - and that the airline should use the 'average' charge paid by consumers to them in the previous month (quarter / year ???). The final price would vary up/down depending on the actual card used.

The other option would be to require the most expensive charge required by the particular airline to be included in the quoted price. This would be the maximum the consumer would actually pay, and some could pay less. This could also lead to increase competition on price, what we don't see with the current system where the charge component is hidden.

Any other ideas?

[James 1077]

Any other ideas?

Ensure that Airlines may only pass on the actual cost of any fees and taxes charged.

Anything above the actual cost must be included in the advertised fare.

[ExXB]

Under EC Regulations all advertised prices must include all non-optional taxes, fees and charges.

The only way Cryanair can advertise a £1.00 fare is if that is inclusive of non-optional taxes, fees, and charges. He does do this, but to do so has to absorb the taxes he pays out of his own pocket.

However "optional" charges includes charges for use of a debit/credit card. Most airlines have one which is free (Visa Electron, MC - Prepaid) but whack you if you use anything else. Since one is free, he doesn't have to include this charge in the advertised price. So his £1 fare is actually £9 since he charges you £4 per sector, per passenger, for using most debit/credit cards. Of course if you have the MC prepaid card your price is £1.

So my idea is that in cases of variable charges (free to £8, for example) the highest charge for a round-trip journey should be included in the price.

[hellsbrink]

So instead of them advertising prices "from" whatever amount they should advertise the maximum you would pay for that flight?

Or am I getting confused?

[ExXB]

Yes - any advertised price (media, billboards, website) should include all 'non-optional' taxes, fees, charges and in addition the highest credit/debit card fee that would be applicable to a round-trip journey.

For example on Cryanair's home page they show a 'cheap-flight' from Bristol to Dusseldorf of £12.00 (and note that fares don't include optional Fees/Charges).

If I had (or could get, which I can't) a Prepaid Master Card then I could buy this for £12 but the vast majority of consumers don't have such a card. They would pay an extra £4 per flight, per passenger.

So what I am saying is that in addition to non-optional TFCs the price should include the airlines credit/debit card fees. If the airline has more than one fee then the highest of all of these fees would be included.

So Cryanair would have to add £4 to all of their displayed airfares, but you could get it for less if you had the right card.

[James 1077]

So Cryanair would have to add £4 to all of their displayed airfares, but you could get it for less if you had the right card.

But what would be easiest is to change the law such that you may only pass on transaction fees and taxes; not make a profit on them. If they want to take a loss by having it at nil for one type of card then fine; but they can't charge you $10 when it only cost them $1.

[SwissRef]

If this applies to the EU getting rid of "Fuel Surcharges" and the like (and making them part of the actual fare - I'm in favour. Either it is necessary (and I am sure Fuel is ) and in the main fare or it is optional (not necessary) so can be an "add-on". It must be possible to actually fly at the advertised Fare.

And I would also like them to say: If it isn't in the "Fare" portion of the final total, then it must be refundable. I hate the fact that on (any) airline you cancel a flight, and the fare is non-refundable (fair enough), but the fuel surcharge is non-refundable, the X,Y,Z is non-refunable and the "admin fee" is equal to the Government taxes....

[Chidken Sangwich]

There is NO such thing as a £1.00 fare from the UK as UK APD is £11.00 per departing pax and this tax is NOT 'optional'. ALL marketing of any seat for sale should therefore be at least £11.00.

Add this to the Airport taxes which again are NOT optional, and I would imagine that your average seat price would never be under £20.00.

Anyone that thinks that a seat for a one-way sector under £50.00 (excluding rip-off credit card charges) makes any airline any money is living in a dream world.

[Haven't a clue]

The e-ticket I received for my most recent BA booking included a helpful breakdown of taxes and charges. They included a GBP5 surcharge for insurance and security.

IIRC this charge first appeared when the hull insurance rates were hiked after the tragic event almost 10 years ago and security beefed up. After that length of time it must be difficult to argue that it should continue to be a separate item, and not included in the basic ticket price. Unless, of course, insurance rates are likely to fall (they probably have) or security charges reduced (unlikely, given the growth industry it has spawned).

[ExXB]

Originally Posted by SwissRef

If this applies to the EU getting rid of "Fuel Surcharges" and the like (and making them part of the actual fare - I'm in favour. Either it is necessary (and I am sure Fuel is ) and in the main fare or it is optional (not necessary) so can be an "add-on". It must be possible to actually fly at the advertised Fare.

And I would also like them to say: If it isn't in the "Fare" portion of the final total, then it must be refundable. I hate the fact that on (any) airline you cancel a flight, and the fare is non-refundable (fair enough), but the fuel surcharge is non-refundable, the X,Y,Z is non-refunable and the "admin fee" is equal to the Government taxes....

No, this isn't what the EC is saying. They are saying that all prices displayed in advertising and in fare quote systems must be inclusive of all non-optional Taxes, Fees, and Charges.

This means if airline ZZ has a fare of CHF100 and a fuel surcharge of CHF1000 they can't advertise / show in their fare quote system a price lower than CHF1100.

Airlines use 'fuel surcharges' for one simple reason. Changing fares is expensive. Each fare has to be updated in published tariffs, in GDS/CRS fare quote systems and in advertising. While the cost of each change is a portion of a cent (any currency) airlines have millions of fares, meaning to update each and everyone of their fares costs in the 100s of thousands of (pick your currency). Changing a surcharge costs maybe $100. So if you are going to increase/decrease your surcharge amount every month, both up and down, the cost savings are significant.

So, in their view, the fuel surcharge is part of the fare and if your ticket is non-refundable, this component is also non-refundable. Same thing if you cancel a nonref ticket that has a stopover charge component - it too isn't refundable, because it is part of the fare.

Stuff that goes to third parties (such as government imposed taxes) are refundable (and yes, some airlines impose a high service charge for doing so) but stuff that goes to the airline usually carry the same conditions as the base fare.

[ExXB]

Originally Posted by Chidken Sangwich

There is NO such thing as a £1.00 fare from the UK as UK APD is £11.00 per departing pax and this tax is NOT 'optional'. ALL marketing of any seat for sale should therefore be at least £11.00.

Add this to the Airport taxes which again are NOT optional, and I would imagine that your average seat price would never be under £20.00.

Anyone that thinks that a seat for a one-way sector under £50.00 (excluding rip-off credit card charges) makes any airline any money is living in a dream world.

How do you explain the Bristol to Dusseldorf fare of £16 that I grabbed from the FR website then?

As long as the government gets their £11 do you think they care if Cryanair pays all or a portion of this? No different than shops saying "We'll pay the VAT"

I imagine that many (most) passengers that are tempted to one of these loss leaders will pay for a bag or a sarni or a beer. Cryanair never loses.

[Chidken Sangwich]

ExXB

Did you really just pay £16 by the time you had finished the booking process???

[CelticRambler]

Originally Posted by James 1077

But what would be easiest is to change the law such that you may only pass on transaction fees and taxes; not make a profit on them. If they want to take a loss by having it at nil for one type of card then fine; but they can't charge you $10 when it only cost them $1.

... or at least insist that a charge claiming to be a "card transaction fee" applies only to the final transaction, not to each element that contributed to the transaction sub-total. Neither Visa nor Mastercard care how that figure was arrived at, so it is misleading of any retailer to claim that a "per passenger per sector" charge is directly related to the cost of processing the transaction.

[baggersup]

I'm not normally a regulate-it person, but this airfare thing has become beyond ridiculous.

If the EU and UK want to cooperate on something useful, then standardize the air fare cateogories of charges and make the airlines have a web site that lists all of them clearly, to make up the bottom line.

Flying rarely within the Uk/EU, i recently had to book two flights to and from Ireland from the UK. Two, one-ways due to the destinations involved.

Trying to compare was so confusing, I gave up at one point and just decide to book the flight and airport with the time and location I wanted and didn't care what it cost! I decided it was worth the cost of a business class seat in order to avoid any questions about my suitcase, carry-on, and as a bonus would get lounge access, etc.

I came away from that fare checking, how big is my one suitcase, carryons allowed if the size of a lunch box, fuel surcharge, credit card booking fee, etc etc etc mess wondering if that's the goal. Make checking everything online so time consuming a busy person will just book and look away when we get the bill.

So they obsfucate on purpose.

[PAXboy]

Baggers, you are on the nail with that. Having worked in telecommunications for many years, I saw the telephone companies (mobile + fixed) develope ever more confusing tarrifs. When I saw jobs being recruited for those that specialised in tariffs and that tariffing software became ever more expensive - then there was proof of the efficacy of the strategy.

In the UK, all the utility companies have taken the same road, so it is only logical that others will follow.

The only certainty is that - if this gets fixed, they will find another route to confuse.

[ExXB]

Originally Posted by baggersup

I'm not normally a regulate-it person, but this airfare thing has become beyond ridiculous.

If the EU and UK want to cooperate on something useful, then standardize the air fare cateogories of charges and make the airlines have a web site that lists all of them clearly, to make up the bottom line.

Flying rarely within the Uk/EU, i recently had to book two flights to and from Ireland from the UK. Two, one-ways due to the destinations involved.

Trying to compare was so confusing, I gave up at one point and just decide to book the flight and airport with the time and location I wanted and didn't care what it cost! I decided it was worth the cost of a business class seat in order to avoid any questions about my suitcase, carry-on, and as a bonus would get lounge access, etc.

I came away from that fare checking, how big is my one suitcase, carryons allowed if the size of a lunch box, fuel surcharge, credit card booking fee, etc etc etc mess wondering if that's the goal. Make checking everything online so time consuming a busy person will just book and look away when we get the bill.

So they obsfucate on purpose.

In the good old days IATA used to set these standards, which most airlines followed. They were also submitted to governments for approval before they were implemented. However the EC decided that was anti-competitive, and the market should dictates these standards. So IATA was told they had to stop doing this, so the did.

So the only way to do it now is for governments (or the EC) to regulate these standards. Of course they will do that without consulting the airlines, who know little about these matters.

[L'aviateur]

The pricing setup by the LCC is just plain ridiculous. It's like me advertising to sell a Cheese and Ham Sandwich for 0.99 and then when you arrive at the cashier to pay being told you have to pay a foot and mouth surcharge, cheese shortage surcharge, a cash fee and a charge for having a reciept, with the total price becoming 9.99....
If the fees such as online checkin, fuel charges, taxes are mandatory, then they should be in the price, only the absolute options should be seperate.