05/09/2011

Air fares are taking off

As the price of oil rises, so does what we pay for flights. It might be obvious (fuel surcharge) or hidden (booking fees), but it is there.


Despite the large drop in the price of oil a few days ago, the overall tendency is upwards. This affects airline companies, even those which have hedged their bets in various ways so as to have a guaranteed price for a fixed period.

Some airlines, including Swiss, have chosen to pass on the extra costs by including a fuel surcharge, which may regularly be updated according to the current oil prices. This has the merit of being open and understandable. The FlyBe airline, which runs many flights to and from Geneva, has just introduced a surcharge for the first time.

Other airlines, often the low cost ones, do not wish to adopt this approach, but must nonetheless either reduce their costs or increase their income. The two principal European low-cost airlines, easyJet and Ryanair, have found an original but controversial way to increase their income without affecting their headline fares. Each has increased the fees charged to customers using a debit or credit card (except if you have a particular card, for which a deal has almost certainly been negotiated with the card company).

Geneva passengers will most notice this change when booking easyJet flights. As stated by Sky News, esasyJet has, for the third time in 7 months, raised the fee on the use of a debit card; the latest increase being from £5.50 to £8. If a credit card is used instead, then there is also a charge of 2% of the flight cost, with a minimum of £4.95. Thus, a credit card booking costs at least £12.95.

In England, this charge is being investigated by the Office of Fair Trading (OFT). as a result of a complaint by the consumer magazine "Which". The result of this investigation is expected in June, and the OFT appears to have the power to force a change in these payment fees, though not retrospectively.

Of course, by then most of the Summer bookings will have been made!

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