Budget airlines’ hidden ‘drip’ fees to be banned in new law in boost for cheap flights hunters
So-called drip-pricing will be made illegal under new laws being drafted by the Government.
Drip-pricing is where businesses promote a product or service at one price but add extra charges throughout the purchasing process, increasing the final cost.
Budget airlines like Ryanair and easyJet have become notorious for drip pricing due to the vast fees they charge for things like baggage, picking seats, and check-in at the airport.
Ryanair can offer a return trip from Manchester to Dublin for £30, but taking a cabin bag will add an extra £72 to the trip. A 20kg checked bag will set travellers back £59.99 per flight - or nearly £120 for the round trip. That makes a return journey advertised as £30 cost £150 - a 500% increase in what was first offered.
Ryanair has also increased fares by 24 percent in the past year, it emerged this week.
easyJet offers flights from about £15, but can charge about £45 for a cabin bag for one journey. Some baggage options include a priority seat selection at the front of the plane, but adding a seat choice alone can cost another £20 per trip.
Worst airlines for hidden fees
Wizz Air has been named the worst airline for hidden fees - or drip pricing - which costs customers eyewatering amounts.
Research from NetVoucherCodes found the airline charges £93.56 in hidden fees when comparing costs for a number of extras offered.
The study totted up prices for a 20kg check in bag, hand luggage, fast track, seat selection, onboard wifi and travel insurance.
Jet2 came second for hidden costs, despite NimbleFins research finding it is actually the best airline for free hand luggage.
Wizz Air charged £42.75 for a checked-in bag, and £34.29 for carry on luggage. Seat selection cost £11.15 in the research which was published in August.
| Airline | Hidden fees |
|---|---|
| 1. Wizz Air | £93.56 |
| 2. Jet2 | £71.00 |
| 3. Vueling | £63.60 |
| 4. Ryanair | £63.28 |
| 5. easyJet | £62.84 |
| 6. Norwegian | £59.91 |
| 7. Finnair | £50.63 |
| 8. Air Europa | £44.00 |
| 9. Lufthansa | £40.32 |
| 10. British Airways | £31.99 |
While the travel industry is most prevalent for drip pricing - 72% of transport providers use drip fees according to Government research - the tactic is also used by entertainment, hospitality and retail industries, with mandatory charges such as booking fees for gig and cinema tickets.
It means customers can end up paying far more than they originally thought, with some charges unavoidable.
Up to £3.5 billion is spent on dripped fees online in the UK, the Government estimates.
Consumer disputes expert Scott Dixon told NimbleFins that retailers often throw in drip pricing after a customer gets halfway through the purchase, or right at the end.
He said: "This is done deliberately as airlines and other providers know that consumers are more likely to accept it, rather than reject it if it was transparent from the outset.
"Consumers are enticed by low fares and prices and are suffering a significant detriment and harm from these insidious practices.
"This crackdown is welcome news for consumers and long overdue, given that airfares are rising and are likely to continue to do so."
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The Government launched a consultation into the practice in September, and it will now form part of the Digital Markets, Competition and Consumers Bill which was announced in the King's Speech to Parliament on Tuesday, November 6.
It's not thought the charges themselves will be banned, but the process of dripping them throughout the purchasing process will be, making prices more transparent and allowing customers to compare more easily.
Matthew Upton, acting executive director of policy and advocacy at Citizens Advice, said: “Citizens Advice found that ‘drip pricing’ is one of the most common online shopping traps used by retailers, so it would be really positive for consumers to finally see this practice banned as we’ve called for.
“It’s essential to have legislation that can keep pace with online retail.”
A source from the Department for Business and Trade told NimbleFins: “We know people are fed up with finding hidden extra costs in their online shopping baskets when times are already challenging.
“That’s why this Government is seizing the benefits of our Brexit freedoms by looking at new legal measures to keep more cash in people's pockets and crack down on hidden fees, restoring more honesty to retail pricing."
Ryanair flight prices rise 24%
The crackdown on airline pricing comes as Ryanair reported the average price of a flight has risen 24% to €58 (£50).
It is expecting record post-tax profits of up to €2.05bn (£1.77bn) this year - surging its previous record of €1.45bn (£1.25bn) in 2018.
Ryanair chief executive Michael O'Leary previously said this year fares were unlikely to surpass a 20% rise and an increase would be more like 10-15%.
The budget airline will pay shareholders dividends for the first time, worth 30p per share and totalling £347m.
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