RYANAIR makes virtually all of its profit from what it calls ancillary charges.
These charges, over and above the basic cost of the ticket, can represent serious pitfalls for unwary customers. They can add up to turn what appeared to be the best fare into an altogether less attractive proposition.
So, earlier this week, Office of Fair Trading chief executive John Fingleton pointed the finger at one particular hidden extra, namely a charge for buying tickets using a credit card.
He also questioned the automatic addition of insurance to flights by airlines such as Ryanair, unless customers opted out.
Nor is this the first time that the OFT has criticised the airline.
Earlier this year, following OFT intervention, Ryanair promised to take steps to increase the clarity and transparency of its website and other advertising.
But Mr Fingleton clearly fears that the airline has now slipped back into its bad old ways. From last month, payments made by the widely-used Electron card, that had previously been free, began to attract a fee when booking a Ryanair seat.
Ryanair changed its free “option” to MasterCard pre-pay.
Mr Fingleton accused the company of using “very low frequency payment mechanism” to get round the rules.” He likened it to Ryanair taunting consumers by pointing out: “Oh well, we know this is completely outside the spirit of the law, but we think it’s within the narrow letter of the law”.
He added: “On some level, it’s quite puerile, it’s almost childish.”
Ryanair has fought back saying it’s not for the overpaid John Fingletons of this world, but for everyday folk “who opt for Ryanair’s guaranteed lowest fares because we give them the opportunity to fly across 26 European countries for free, £5 or £10.”
What the OFT must realise, says the Irish airline, 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 rivals.
The banter makes for colourful copy for newspapers. But, while amusing, Ryanair’s flippant response belies a careless attitude to its own brand. On one level, the airline is right. Customers do value the ability to whittle down the cost of travelling to the bare essentials. On the other hand, customers need to feel confident that they won’t be hit with unexpected charges. Otherwise, there won’t be repeat business.
WHICH way is the wind blowing? The redundancies at Sulzer Pumps, in Netherton, are all the more painful because it’s the second time in less than two years that staff at the plant have faced unemployment.
The decision by the Swiss firm to stop making pumps and turbines reflects the poor state of the oil and gas market.
It just goes to show the vagaries of the global market place and how our labour market is affected by the icy blasts from far-flung corners of the globe. When Sulzer moved into the Netherton plant just over a year ago, there was no sign of weak demand.
In contrast, when Rolls-Royce moved out, they were worried about the weakness of the dollar, which was affecting their ability to sell in the US. Since then, of course, the dollar has recovered, making the decision to shift production to the US look like a bad one.
