RyanAir Business Model
Mon, 1 September, 2008 – 12:12 pm
Last night I went onto the RyanAir website to have a look at the cost of a return flight to Dublin for a long weekend away for us. On reaching the site I saw an advert on the front page showing flights for £1 each way. After a quick search I found we could fly out on a Thursday afternoon and back on a Monday afternoon for £2 return. Sounds great right? £4 for return flights, yet the final cost was £52! Okay, before I start, £52 is pretty cheap and I expected to pay more than that anyway so from the cost point of view, we're happy. However how did we go from £4 to 13 times more?!
- RyanAir charge for putting bagging in the hold. We've got one case so that would be an additional £8 each way.
- If you want to check in baggage then you have to use the airport check in as opposed to the free online check in, so that's a further £4 each way.
- Even though we're only checking in one case, because there's two of us in the party we both have to do airport check in (so one couldn't get the free online check in), so another £4 each way (at this point I'll mention that yes I could have done two bookings, but is £8 really worth the hassle of doing everything twice?!).
So, so far we have:
£4 - Flights, fantastic price
£16 - baggage check in, understandable
£16 - airport check in, understandable by why do we both have to do it?
That's £36. So that's what I thought, £36 for two return flights, that's £9 each way, a bargain. I realised there were fees for paying by card (how else can you pay online?!) but from past experience I knew that a credit card was more expensive than switch, so I grabbed my bank card and used that to pay (without checking the fees list I admit). Final page, £52 charge! So I've just paid £16 to pay by Switch??!! I then checked the fees for the cards. All but Visa Electron (which is free for some reason) would cost £4 per person per flight. Who on earth thought up that system?
I still have the screen shot from our flight to Rome in January, so just 7 months ago. We paid:
£0.04 for the flights
£20 for 2 cases, £5 per case per flight
£8 airport check in fee, so £2 per person per flight
£39.96 for the taxes and charges usually added to the flights
£2.80 to pay by switch
So why did it all change? Okay, I can understand inflation, the cases have gone up by £3 each, that's understandable, petrol prices have increased and more weight means more petrol needed. Thank god they don't weigh us too! The airport check in has doubled in price, again I can understand why they have the fee but 100% increase in 7 months is a bit steep, especially as all members of the party have to do the same as the other. However, the most important point here is that 7 months ago I paid £2.80 charge to pay by switch card. I know they don't get charged that, I have worked in retail before, but I don't begrudge paying a small fee. But £16??!! That is simply ridiculous, especially when they charge per person and flight. So if I'd just been flying on my own but paying the same amount it would have only cost £8. How can a switch charge increase for each person flying?
I'm not a fan of hidden charges. I hate dealing with companies who forget that not all of us are not VAT registered. I get prices quoted to me without the VAT and sometimes no one mentions VAT so I assume that's the final price. Or going to a site, selecting items and then suddenly having VAT whacked on at the end of it. I've got used to RyanAir's system of only display the cost of the flight and not the taxes. Then came the baggage hold fee, and there's always a card charge, but to advertise flights for £1 each way when, unless you are a small minority who own a visa electron card, you will be paying an additional £8 for a return flight.
As I said, yes I do realise £26 return per person is cheap and I'm not disputing that, it's the charge that has gone up over 500% in 7 months, which usually costs most businesses about 20p in bank charges. If I'd known it was the same price for Switch and a credit card I'd have used my credit card for a start, get some points back on it at least!
Should airline sites still be allowed to get away with these types of charges? Is the £16 switch charge only there because the flights were so cheap? I'd love to hear from anyone who's recently used RyanAir and how much their card charge was. Still, roll on October!
10 Responses to “RyanAir Business Model”
Found the fees page.
By Sarah on Sep 1, 2008
Further info, looks like RyanAir 'had to' increase the charge for Switch cards to be the same as credit cards, why not drop the credit card charge instead?
Also found the Daily Mirror had blogged on this subject along with quite a few frustrated people - blog post. I like RyanAir's argument that it's avoidable by paying with Visa Electron. I have several cards, not one is a VE card!
By Sarah on Sep 1, 2008
I guess they are just trying to not end up like Zoom
By Mike Robinson on Sep 1, 2008
It's not the costs that are the issue, it's the fact that they advertised a flight for £1 that in reality became £13. I know it's a cheap flight, I don't dispute that. But it's as bad as a company advertising a price excluding VAT.
Why add £4 per person per flight on at the card payment stage? Why not just make the flights £5?! Saying £16 for a switch card processing fee is ridiculous, saying 40p for the fee and £5 for the flight would get them more respect.
By Sarah on Sep 1, 2008
Airline sites charge for what ever and as much as they possibly can. It's the sad truth.
By Goran Giertz on Sep 3, 2008
It's not the cost of the flight that's the issue here, it's the tactics and the ethics behind the way they make their money.
Take a hosting company who sells domains for say $5 a year. The cheapest .com I know of is about $6 a year, so clear the company is making a loss. Of course they need to recoup that loss, so hidden in the terms and conditions it says that if you wish to pay by card for your domain it will cost $5 per domain.
However, how else are you meant to pay for something online? So the advert is '$5 domains' but after you've added a few to your basket, you've completed your details and then you get to the point where it asks for your card details. $15 it says on the page, for 3 domains. Sounds like a great deal, so you enter your details in. Suddenly $15 shoots up to $30 as they've added $5 per domain to your card, which is actually less than what I paid for a card payment on these flights.
If RyanAir can get away with doing it, why not a hosting company? We're used to seeing minor charges on cards if the price is low. You can't offer a low price without charging for the fee. But £16 for a maximum 40p fee is ridiculous. It's not a case of saying 'they need to make back their money', otherwise why bother discounting the tickets in the first place. All the other charges I can understand, and it wouldn't be an issue if the flights had been £5 each.
As I said, it's not the price, it's the way they took the money. I like things to be in plain sight, not hidden to make it sound attractive.
By Sarah on Sep 5, 2008
The choice is yours - you do not have to fly with RyanAir! If you fly off-season you get some excellent starting ticket prices but yes the extras do add up.
My main gripe with RyanAir is on the return legs of flights. If they cancel for whatever reason, you are up a gumtree. Have you tried ringing the customer support line - forget it. Basically you are on your own to find a way back! Get compensation???? You are joking.
By Bob on Sep 9, 2008
Actually, to get from Liverpool to Dublin, there's no other carrier at present, as far as I'm aware.
Plus if you re-read what I wrote, you'll see that I was unaware of the additional £16 charge until I'd paid in full. I'm not about to cancel, as you can't get your money back.
Anyway, as I've said over and over, it's not the cost, that's cheap there's no doubt about it. It's the way they do it. I just don't appreciate hiding costs.
Oh and it's well recommended that you take travel insurance when ever you go away. I've been abroad and had a canceled RyanAir flight due to the weather. They just booked me into the following day, no additional cost or problem. However, that's what your travel insurance is for if you need it.
By Sarah on Sep 15, 2008
I got this far …
Even though we're only checking in one case, because there's two of us in the party we both have to do airport check in (so one couldn't get the free online check in), so another £4 each way
… and decided it wasn't worth my time reading any more. Ever hear of a split booking?
By Paul OMara on Sep 28, 2008
If it wasn't worth your time reading then why bother commenting? Try continue reading. I'll repeat the next bit of it (right after the bit you quoted) here for you to save you the effort:
Also, another reason is because when you pay by card you get a fee. At the time I assumed the fee would be around £3-4 (as it was £2.80 in January, which you'll have seen had you continued reading), and so a fee for each booking would have made the £8 saving just £4-5. Not to mention that you'd have to find a way to check in whilst on holiday (as I think you have to check in under a certain number of hours beforehand) which makes you wonder if £4-5 is worth the saving.
But of course, if you'd continued reading you'd have found the real point behind the post which wasn't about the cost of the flights, wasn't about the cost of the extras which are all understandable for a budget airline. But about their business ethics in charging £16 to pay by Switch for a £36 purchase.
You'd have seen that if you'd continued reading…
By Sarah on Sep 28, 2008