Brussels probes extra charges by low-cost airlines
Low-cost airlines face scrutiny over charges
The European Commission will look into how low-cost airlines are slapping passengers with extra charges that, until a few years ago, were considered to be part of a normal air fare.
The EU will discuss charges based on payment type when all options are not available to every customer
It was not satisfied with trends emerging in the air transport industry such as charging customers extra for using a credit or debit card when booking a flight or for “excessive baggage” fees over and above hand luggage.
European Competition Commissioner Karel de Gucht stopped short of directly referring to Ryanair and similar low-cost airlines but said the Commission would soon be publishing a study on transparency in airline ticket prices. It would also discuss with member states “the matter of charges based on payment type, especially when all options are not available to all customers and to see what can be allowed under existing legislation”.
Mr de Gucht was speaking at the European Parliament during a debate in which various MEPs called on the Commission to end the trend of introducing additional charges to the cost of air travel.
Approving a resolution on the issue, the EP denounced the extra fee for credit cards and appealed to the Commission to regulate this area. MEPs also want the EU Executive to introduce regulations establishing limits on the amount of extra charges airlines can levy.
Low-cost airlines such as Ryanair and EasyJet generate much of their profits through the “extras” they charge passengers for services.
Although initially the price of the flight may seem cheap, costs may rise significantly through a range of services including priority boarding, excess baggage that cannot be carried in the cabin, seat selection, food, transport services and many other “hidden” charges.
To compete, legacy airlines are introducing similar “low-cost” concepts for their own customers.
Air Malta, which is implementing a restructuring process, has recently introduced a new pricing policy, with an additional administration fee of €10 for every flight booked, payment for seat reservation and plans to introduce “extra charges” for food and beverages and excess luggage, according to the restructuring report made public by the Commission.
A study issued by the Commission as part of the evaluation of the state aid request by Air Malta, showed that the national airline was severely hit by the introduction of low-cost carriers in Malta, seeing its market share significantly slashed.
According to Mr de Gucht, the Commission was planning to reassess the issue of baggage restrictions as part of the planned review of Regulation 261/2004 on air passengers’ rights.