Monday, 4 January 2010

Overpaid Officials?

If you want an early new year titter, read the linked article on Ryan Air and the OFT.

I quote a magical response to criticism that Ryan Air only allows one type of obscure method of credit card payment in order to get round legislation that would normally prevent it from advertising all flights with credit card fees included, which would mean almost double the fares in many cases of their advertising.

"Ryanair is not for the overpaid John Fingletons (of the OFT) on this world but for the everyday Joe Bloggs who opt for Ryanair's guaranteed lowest fares because we give them the opportunity to fly across 26 European countries for free, £5 and £10. What the OFT must realise is that passengers prefer Ryanair's model as it allows them to avoid costs, such as baggage charges, which are still included in the high fares of high cost, fuel surcharging, strike-threatened airlines"

I am sure John Fingleton of the OFT may have a case to question if they know how much he is paid and whether that compares badly to the money the spokesman at Ryan Air earns but here's how the Ryan Air little dodge works.

For every passenger booking a flight there is a single credit card fee of £5 even if the total is paid on a single credit card transaction - so if 4 passengers are booked on the same transaction, then the fee taken is £20 ($40 if the flights are returns), whereas the actual underlying cost is between 1.5% and 2.5% of the value of the original transaction. All airlines are up to similar stupid tricks at the moment but I have been victim of Ryan Air's wheezes where quoted costs are miles off the actual price paid.

It's not a debate to get into early in the morning because I think Ryan Air have done a great deal to open up air travel across Europe but their advertising has consistently annoyed me as it bears no relation to the real costs you pay and the total rubbish service that ensues - they squeeze every penny of profit they can out of people.

It's a little conundrum on a Monday morning, but if Ryan Air actually do provide millions of seats across Europe at little or no cost, then how do they make their money (and their profits are very nice)? And even if a fair proportion of passengers do pay through the nose as I have done for small incremental services, what things do Ryan Air not pay for that other firms do that costs them significant operating costs?

It's a little thing, but I would hope pilots and engineers are paid and used consistently across all airlines, or am I being naive?

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