UK airlines have reacted angrily to reports that the government will force them to change their pricing models – with talk of headline air fares rising by £80 when “drip pricing” is outlawed.
Since the start of the no-frills airline revolution in the mid-1990s, almost all airlines have “unbundled” fares – charging extra for checked baggage, assigned seating and larger pieces of cabin baggage. These are known as “ancilliaries”, and are increasingly important for carriers.
In Ryanair’s last financial year, ending in March this year, 36 per cent the airline’s revenue was from ancillaries.
In the King’s Speech, the government vowed to crack down on pricing practices by “taking new powers to enable growing consumer harms to be tackled”. Airline passengers are said to be particularly vulnerable to “consumer harms”.
But one senior aviation figure said buying a flight is “no different from buying a pizza – if you want extra toppings, you pay for them”.
The source added: “Airlines are one of the few areas where pricing has met the legal requirements for over a decade.”
The Department for Business and Trade (DBT) says it regards “a dripped fee to be any fee added after the product and its base price was presented together”.
A DBT report found that travellers buying flights from 81 per cent of airline providers are “most likely to encounter dripped fees that meet more than one criterion of harm”.
The criteria of harm applicable to airlines are:
- an extra charge that represents more than 25 per cent of the original price
- a charge presented late in the check-out process
Airlines insist that they adhere to Civil Aviation Authority guidelines that requires displayed fares to be available, and that “optional price supplements” are communicated clearly at the start of the booking prices at the start of the booking process.
A spokesperson for Airlines UK, representing the major carriers in British aviation, said: “Unbundling products and offering greater choice that consumers demand is an important way that airlines compete and is well-understood to have enabled air travel to become accessible for all.
“Any moves to reverse this are clearly not in the interest of UK consumers and we will respond to the government’s proposals when we have more details.”
A leading airline revealed that one in three passengers pay only the basic fare, and said that under government plans such travellers would end up paying for extras they do not need.
Carriers are also concerned about the figures cited by the DBT for ancillaries.
The Department for Business and Trade (DBT) says the median luggage fee is £65, that the typical “fast track” fee is £28 and that a median seat reservation costs £15.
Together these total £108, which the government says is 95 per cent of the median air fare of £113.70.
The DBT says these extras are “costly relative to base product prices and occurred late in the checkout process”.
For a typical easyJet flight, a 15kg checked bag costs £31, while a 23kg case is £40.
On the longest British Airways flight, covering the 10,672 miles from London via Singapore to Sydney, a 23kg checked bag costs £30.
