EasyJet’s figures reveal how much airlines now depend on add-on charges for their profit, as it reported £511m in earnings last year from baggage fees, insurance, early boarding and credit card fees – equal to a fifth of its total revenue.
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Seven out of ten easyJet customers pay the airline £9 each way to put a bag in the hold. Baggage charges raked in £238m for easyJet, an increase of 65% over the year, and nearly enough to pay for the entire staff cost of crewing the airline. Travellers exceeding the airline’s 20kg weight limit face a £42 charge for three extra kilos, little more than the weight of two pairs of jeans. Ryanair charges £15 per bag each way. Many traditional “legacy” carriers such as British Airways don’t charge extra for baggage, but they are cutting allowances. Only Southwest, the biggest US budget carrier, has declared against baggage charges, making its “$0 for your bags” the centrepiece of its current advertising strategydoes not charge for baggage.
Speedy Boarding
Surprisingly many passengers choose to “be among the first passengers through the boarding gate” at another £8 a go at airports such as Gatwick. EasyJet said yesterday: “Speedy Boarding continues to deliver a strong performance.” Ryanair charges £4 for “priority boarding” but given Easyjet’s success, may now decide to increase its charges.
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Ryanair alone charges £5 each way when passengers check in online and print boarding passes at home.
Credit and debit card fees
A new revenue stream for budget airlines, with Ryanair charging £5 per person per flight and easyJet £4.50. The charges have provoked a consumer rebellion, with many travellers opening Visa Electron accounts, such as that provided by Halifax, which reduce the payment handling fee to zero.
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“Ryanair is leading the way to the slopes this winter, with its lowest ski fares,” the airline claims. It makes less noise about the fact that sports equipment such as skis and golf clubs are charged £40 each way a person for sports equipment such as skis and golf clubs, easyJet charges £18.50 each way.
Insurance mkpuchi
EasyJet and Ryanair warn passengers of dire consequences if they fail to properly insure their travel arrangements. But as many now opt for annual policies or rely on insurance offered under their bank account, this is proving less lucrative for the airlines.
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In October British Airways said passengers who wish to choose their seats when they book will have to pay for the privilege . The charges range from £10 to £60 for long-haul business passengers, in a move The airline said would “give customers more control over their seating options”.
Entertainment and internet
A new frontier for charging as wireless internet becomes available on board, according to Jan Sorensen of the airline industry’s Ancillary Revenue Guide.
Overhead locker charges
Under consideration by some airlines.
Subscription charges
Another revenue model being considered by airlines. Regular passengers may will be encouraged to buy an annual pass, which would give discounts for charges on baggage, boarding and beverages food and drink, thus locking them into the airline’s network. The idea is that it will lock travellers into the budget airline’s network, in the way that airmile deals encourage loyalty among business travellers. Spending a penny
Earlier this year, Ryanair boss Michael O’Leary suggested charging passengers £1 to use the toilet. But a Ryanair spokesman said at the time: “Michael makes a lot of this stuff up as he goes along.”
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BA has abolished free meals on short flights, following a trend set by the budget airlines, whose attendants have become commission-earning sellers of food and drink.
