- Card holders charged for withdrawing cash
- In addition, extra cost for not using card for six months
Budget airline Ryanair was accused today of acting like an aviation card-sharp with its latest wheeze to squeeze cash out of its customers.
The low-cost carrier is charging passengers £6 for a special pre-payment card – without which they will have to pay a £6 each way ‘administration fee’ just to book their tickets.
The administration fees will only be waived if the bookings are made on the new Ryanair-branded pre-paid card called the ‘Ryanair Cash Passport’ and costing £6 which was launched today.
But the move was criticised by consumer watchdog Which? and other critics as ‘insulting’ and anti-competitive.
The card will need to be pre-loaded with cash before any booking is made.
Ryanair insists the card will be more accessible and leave passengers better off.
It says that, for a family of four, the £6 each way administration fees would tot up to £48. It boasts that it will cover the cost of the card’s £6 application fee – though only in the form of travel vouchers for use on Ryanair flights.
Ryanair also justifies its decision by saying that its new card offers free cash withdrawals from some cash machines.
But it warns that this free withdrawal service may expire next year. And as with many pre-paid cards, charges are imposed for not using the card for six months.
But Which? said that switching to the new card complicated the process further and added ‘insult to UK consumers who have little opportunity to avoid such fees’.
Charges include a fee for withdrawing cash from the card over the counter at a bank or from an ATM. There is also a 50p charge for all transactions, other than Ryanair bookings, from April 2012 and a rolling fee of £2.50 if a card is not used for six months.
The specific type of card that avoided the Ryanair administration fee was earlier changed from the Electron card to Mastercard pre-paid cards. But anyone using the Mastercard pre-paid card will now be charged from November.
When the new card was announced, a Ryanair spokesman said a quarter of all UK bookings were made using a Mastercard pre-paid card.
The airline's decision to accept only an even more obscure card, flies in the face of a recent order by the Office of Fair Trading (OFT) to stop the charges altogether.
The OFT recently held an inquiry into card surcharges for passengers booking travel online.
But Ryanair said that its charge was for administration purposes, such as the cost of running a website, rather than a surcharge for using a credit or debit card.
The 90 day OFT investigation found that UK consumers spent £300 million on payment surcharges during 2009 alone. It threatened to take airlines to the High Court if the surcharges do not stop.
Consumer champion Martin Lewis, who runs the moneysavingexpert.com website said: ‘Ryanair is sticking two fingers up at every regulator and consumer group with this news.
He said: ’This is anti-competitive, it's an insult to loyal passengers who first got Electron cards so they could pay for free, then were forced to switch to prepaid Mastercards and are now being asked to dance again this time by getting its own prepaid card.'
‘Quite simply, Ryanair must be forced to include the booking fee in its headline price - this is not a voluntary fee - it's part of core pricing.'
Ryanair defended the card stating: 'The Ryanair Cash Passport card is free to purchase, free to top-up and free to use on Ryanair.com, making it one of the most competitive MasterCard Prepaid products available.
'It will also provide passengers with the additional benefit of avoiding Ryanair's £6 per passenger per flight administration charge, delivering unique and unrivalled savings of £48 every time a family of four makes a Ryanair booking using their Ryanair’s Cash Passport.’
Ryanair spokesman Stephen McNamara added: ‘Ryanair's £6 admin fee will not apply to any bookings made with Ryanair Cash Passport and there are no transaction charges for using the card at UK merchants until 31 March 2012. ‘
RYANAIR'S PENNY PINCHING: 8 TO BEWARE
1. 'Boarding Pass Reprint' Fee: 40€ (£35) per person.
2. Name Change Fee: 150€ (£135) per person (including spelling mistakes).
3. Excess Luggage Fee: 20€ (£18) per kilogramme.
4. Unusual Hand Luggage Dimensions and Extra Fees: Up to 70€ (£60) to check in an extra bag or to take your extra duty-free bag on to the plane.
5. Dynamic Currency Conversion: Approximately 6€ (£5) for every 100€ (£85) spent.
6. Travel Insurance: 15.50€ (£13.30) per person (much more expensive than usual).
7. Flight Change Fee: If you can't board, you'll pay a 55€ (£48) flight change fee and price difference.
8. Expensive In-Flight food and drink: A bottle of water costs 2.70€ (£2.30), for example.
Although the real cost of processing a debit card transaction has been estimated to be as little as 30 pence, research recently published by consumer watchdog Which? revealed that airlines have pocketed £18million in additional revenue from surcharges.
Which? executive director Richard Lloyd said: ‘Thousands of people have complained to us that these hidden card fees are unfair.
'The Government must act so that consumers can easily compare the cost of their flights.’
Budget airlines have been criticised for charging over the odds to carry checked luggage. Ryanair currently charges up to £20 per piece of checked luggage, per flight. And that's only if passengers pre-book the bags.
Checking in luggage un-booked can cost up to £40 per piece, per flight. Go over the 20 kg weight limit, and the price increases by a further £20 per kg, per flight.
A recent study found that the average family's extra budget airline checked-baggage cost is £233.12.
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