Money News

Ryanair defies OFT and maintains card surcharges

By Martin Fagan - news@consumerchoices.co.uk

From October, the only way passengers can avoid £6 per journey surcharge it to take out Ryanair’s new pre-paid card.

Proposals by the Office of Fair Trading (OFT) requiring airlines to drop surcharges on debit and credit card payments has been thrown into turmoil by budget airline, Ryanair.

Rather than cease the practice of card surcharges as the OFT has recommended, the budget airline has said that from 4 October, the only way passengers can avoid paying these fees is by signing up to the Ryanair Cash Passport.

This is a Ryanair branded, pre-paid credit card and only passengers using it will avoid the £6 fee. From 1 November, anyone using any other brand of prepaid MasterCard will also be charged £6.

During its investigation, the OFT discovered Ryanair charged a fee of £6 per journey (not per transaction) for both credit and debit card users. As a consequence, the charge would add £48 to the cost of tickets for a family of four’s outward and return flights.

Ryanair has a history of forcing customers into using a particular pre-paid credit card if they wanted to avoid these fees. Until 2009 a Visa Electron was the budget airline’s favoured pre-paid card, but it changed the rules in January 2010 so that only a prepaid MasterCard would avoid the charges.

Although the airline claims the card is free to apply for, it will actually cost £6 to buy, with each customer being given a £6 Ryanair travel voucher to offset the cost.

The card also carries a raft of other fees including a £4 charge for withdrawing cash over the counter at a bank, a £2 fee for using the card at an ATM, a 50p charge for all transactions from 1 April 2012 and a rolling fee of £2.50 if a card is not used for six months.

“Ryanair’s £6 admin fee will not apply to any bookings made with Ryanair Cash Passport,” said Stephen McNamara, spokesman for the airline.

“Also there are no transaction charges for using the card at UK merchants until 31 March 2012, so we recommend that UK passengers make the switch to Ryanair Cash Passport as soon as possible to take advantage of the no fee offer.”

In March 2011, consumer watchdog Which? submitted a super-complaint to the OFT asking the regulator to investigate excessive credit and debit card surcharges by airlines. During its investigation, the OFT discovered Ryanair charged a fee of £6 per journey, rather than per transaction, for both credit and debit card users.

In July, Ryanair reported that pre-tax profits for the three months to the end of June were £138million, up 50% from the same period last year.