Airlines under government scrutiny over drip-pricing strategies
- Airlines could be forced to be more transparent about hidden costs as part of a public consultation into unnecessary charges.
- The government claims so-called “drip pricing” occurs in products ranging from ticket fares to food deliveries.
- Almost three quarters of transport providers, including air and rail, include hidden fees in their products, according to government research.
- It comes as Ryanair flew 12% more passengers in August than the same month last year – it’s latest all time traffic record.
Susannah Streeter, head of money and markets, Hargreaves Lansdown:
‘’Airline passengers have had to buckle up and accept some hefty charges as they click through booking systems and many customers would benefit from a lot more clarity about final prices. The public consultation is hugely welcome and is bound to shine the light on just how tough some companies have been about enforcing their rules.
Inflight add-ons are highly lucrative for airlines, adding a big cushion to the bottom line. For now, this ‘drip pricing’ strategy doesn’t seem to be putting off passengers from splashing the cash, with Ryanair revealing today it flew 12% more passengers in August than the same month last year – it’s latest all time traffic record.
However, although bookings remain strong in the months ahead, the deepening cost-of-living crisis due to high interest rates may make passenger more sensitive to add-on costs. More legroom or another bag might be worth paying the price for, if bank accounts are flush, but as budgets are eroded further these ‘nice to have’ extras will be easy to ditch. People may also be more inclined to stash away snacks to eat on board and save spending money for the beach bar.
Airlines also need to recognise that there is a tipping point. Passengers will start to resent super-strict rules on boarding, like being forced to pay huge sums for a forgotten print out ticket, or slammed for a bag which is millimetres too large, if airlines don’t also adhere to the rules and offer the correct compensation when flights are cancelled or delayed.’’
