Extra charges on airlines continue to rise

by Emily DUNBAR on October 25, 2010

This year alone, airlines will collect more than £16.2 billion in revenue from add-on charges such as checked luggage and the use of credit cards on purchases.

The rise represents a jump of nearly £6.5 billion from auxiliary fees in 2009. In a study published by travel technology firm Amadeus, the numbers show that the increases are largely found in priority boarding charges and extra checked luggage.

Partnering with IdeaWorks, a US consulting firm, Amadeus revealed some of its clients are major carriers like Flybe and British Airways. The President of the analyst firm, Jay Sorensen, said that profit margins for ancillary charges may quadruple to reach £65.9 billion.

According to the findings, airlines that profit the most by jacking up additional fees for extras are Flybe, US-based Spirit Air, Singapore-based Tiger Airways and Ryanair. These four airlines average around 20 per cent of their revenue from ancillary fees. Typically add-on charges are the highest on budget carriers that have taken a pay-for-what-you-use approach, however, the report also shows that more traditional carriers like British Airways have begun to tack on extra fees as well.

Mr Sorensen said that airlines across the globe have embraced ‘a la carte’ fees. He also said that baggage fees are going to continue to increase and free meals could be axes on flights altogether.

Despite budget airlines seeing widespread success using this model, the Air Transport Users Council has said that there is concern over the scale in which charges are increasing. A spokesman on the Council said that charging for optional services was fine, so long as limits are established as to how far it can go.

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