Last week, Ryanair, announced that its passengers will have to use the airline’s own Mastercard to avoid paying booking fees, but as per several experts, it is simply another money-making scheme.
The change will take place from early October. Currently the low-cost airline charges an ?6 (AED34.58) administration fee for every one-way flight on those paying with a debit, credit or Visa Electron card. With a Mastercard, this charge can be avoided.
On 4 October,?the airline will be launching its own prepaid Mastercard, the Ryanair Cash Passport and from November 1st users of any other brand of prepaid Mastercard will also be charged the ?6 fee.
The principle of prepaid cards is that they are loaded with money before they are used to pay for things, unlike debit cards. Previously, Ryanair passengers had been able to get around the charge by using Visa Electron. But in January 2010, the Irish airline introduced a ?5 ?a-leg-fee for Electron users, which was later increased.
PROFIT MAKING SCHEME
Martin Lewis, of website?MoneySavingExpert.com, responded to Ryanair’s new move by saying: “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 Ryanair’s own prepaid card.” He lambasted the budget airline, adding: ?Card is ‘sticking two fingers up at regulators’ like the National Office of Fair Trading.?
More than a week ago the Office of Fair Trading (OFT) launched a formal investigation into all the airlines who were over their surcharges for using debit and credit cards followed by its findings that seemed to suggest that charges for paying by debit card should be banned. It also suggested that a minor amendment to existing payment services regulations by the Treasury would achieve this.
Consumer magazine Which? claimed that the actual cost to the retailer for processing card transactions was no more than 20p for debit cards, and no more than 2% on credit cards and it lodged a complaint with the OFT in order to stamp out the practice. The experts on informing consumers about fair deals also released a research last week showing that consumers still pay around ?265,000 a day in debit card surcharges for booking plane tickets.
“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,” Lewis said.
Consumer Focus expert Adam Scorer also agreed: “Customers shouldn’t have to sign up to a special service to avoid fees.”
A spokesman for Ryanair said that its new move had “been in the pipeline for some time,? and denied any accusations that it was ignoring the claims of the OFT. “We have suffered from criticism for some time that customers do not know where to get prepaid Mastercards,? he said, ?So we decided that to make it easier for customers they could start getting them from our website.” He added that the administration fee was to fund the upkeep of the company?s websites.
Although the OFT declined to comment on individual airline’s pricing structures it said ?that its investigation is looking at “any additional charge that fluctuates depending on how you [an airline customer] choose to make the payment.”
Ryanair spokesman, Stephen McNamara indicated that the airline?s confidence has not swayed in spite of the criticism. He urged passengers to buy it and told The Sun: ?This year 75 million true money-saving experts will fly on Ryanair’s unbeatable low fares.?
Sources: Guardian, The Sun