Cards-on-table time as OFT attacks Ryanair

One of most read stories on the BBC web site at the time of blogging (1230 GMT Monday) is another attack on the profitable and popular airline Ryanair.

The BBC has lifted (sorry, sourced) its story from The Independent, acknowledging The Indy - without the courtesy of a hyperlink - in the third paragraph. The Indy also uses the story as the basis for its leader column.

The story is based around what could be this year's hot topic - credit card charges and alternative payment mechanisms. The OFT's chief exec, John Finnegan, is moaning about Ryanair having found a perfectly legal way around excluding credit card charges from its price-led advertising.

From the start of this year, Ryanair passengers using Mastercard Prepaid cards will not be charged a booking fee. The charge for customers using other credit and debit card is £5.

As the BBC story itself says: "The law says that if an airline offers at least one free payment method, it is allowed to advertise cheap fares that do not include extra credit card charges."

So what's the problem? Finnegan describes Ryanair's move as "childish and puerile" - nothing like a tautology to kick off the New Year. But this is a value call - whether it's childish and/or puerile is, surely, meaningless if the airline is acting within the law.

There are a number of issues here, such as whether the OFT should be able to use an interview in a national newspaper to have a go at the airline because it is unable to do so via its official channels.

And perhaps this also shows how impotent civil servants and government bodies can be. The CAA's failed attempt to prosecute Travel Republic over alleged ATOL breaches shows how the business community can successfully challenge the authorities in the courts.

But maybe Finnegan has done us all a service by bringing credit card charges and alternative payment mechanisms to the fore at the start of the year. The OTAs in particular have been banging on how much the credit card companies charge to process online payments, while the fall-out from the ongoing E-Clear story remains to be seen.

Maybe by alerting other airlines to a legal loophole, Ryanair has done the business a favour. And not for the first time.

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2 Comments

It is a subject I have written about because realistically how much does it cost for Ryanair (or any airline) to process a payment through their payment processor? I was told between £0.50 - £1.50.

I wasn't aware that airlines could get away with not including the payment fee in their advertising prices if they offered a free method.

Surely, its time that the powers that be make all prices even more transparent?

Whatever the backings or reasons for his comments were, he is really only voicing the frustrations of the consumer who ends up having to pay much more than the headline rate, just because he doesnt have the right card. Maybe the website could say credit card charges apply UNLESS you use XX card to pay with? The consumers cant say they didnt know!

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