Working the numbers on Ryanair's new £2 cancellation charge

31 March 2011

Bitterwallet - Ryanair new plane liveryIt's the way of the world - airlines often have to cancel flights for reasons beyond their control; Acts of God, strike action, the Spanish. When such instances occur in Europe, an EU law comes into play - EU261 - that states airlines have a duty of care to passengers stranded as a result, who must be provided provisions such as accommodation and meals.

Despite the fact that that's the law and has been for sometime, Ryanair keep acting surprised by the fact they have to comply with it. Campaign for change is one thing, and Ryanair are currently doing just that; they want airlines to be only responsible for matters they have control over - cancellation through mechanical failure, and so on.

But now Ryanair have announced they're to begin charging a £2/2€ levy per person per flight, to cover the cost of complying with the law. Said Ryanair:

"It is clearly unfair that airlines are obliged to provide meals and accommodation for passengers simply because governments close their airspace, or air traffic controllers walk off the job, or incompetent airports fail to clear their runways of snow."

You can see their point; it's not their fault in these circumstances. Perhaps the travel insurance industry should instead be responsible for their customers in unforeseeable situations, since that's the point of travel insurance in the first place.

But for us, that's not the issue. The problem is Ryanair presenting the legal requirement for duty of care as some new and unexpected fee; as if management has never thought to budget for such eventualities in the first place.

easyJet responded to Ryanair's hijacking of their own flights by stating:

“EU 261 places an unfair burden on airlines and easyJet would like to see it reformed. However, easyJet has no plans to follow Ryanair in applying an the charge on our passengers.”

That's probably because easyJet fares reflect some modicum of contingency planning, instead of stripping it out in order to make their point and support their own campaign, whip up headlines and continue to make their prices appear artificially low.

So there's that. And if you care to indulge us in a spot of simple maths;

• Ryanair claim that complying with EU 261 cost them more than £88 million last year (100 million Euro) in a 12 month period that saw ash clouds, strikes and winter weather impact severely on European flights; it's generally agreed this was an exceptional year in terms of disruption

• Ryanair believe 78 million passengers will fly with them in the next year; let's assume that means 78 million single flights, instead of assuming each passenger may make several flights with Ryanair)

• Ryanair's new levy therefore means an additional revenue of at least 156 million Euros (more where flights are bought by UK-based customers), even though the worst year of disruption only saw them spend 100 million Euros

So in a worst case scenario - if the events of last year were to happen again this year - Ryanair would make at least 56 million Euros from the new charge. However, the best case scenario for Ryanair is also the more likely - that there'll be no flights cancelled by dust clouds and airports will be better prepared to deal with adverse weather - and so Ryanair are likely to pocket most of the money raised.

TOPICS:   Travel

11 comments

  • Alexis
    Falls foul of Consumer Protection from Unfair Trading Regulations 2008 IMO. You're basically being forced to buy a form of insurance.
  • kv
    total hypocites, they've spent the last year complaining about how the irish Tavel Tax is costing them business, and then they go and add a "tax" of their own
  • Claire N.
    What I hate is that Ryanair are grouchy that they're forking out for something that's not their fault. Well, it's not the passengers' fault either, and we already have to deal with the fallout of these circumstances with cancelled or delayed holidays. Penalising the customer is not going to suddenly get us all onside, shaking our fists at the aviation insurance industry - we're going to be taking it out on Ryanair in return. Idiots. I refuse to fly them anymore anyway.
  • Big G.
    Alexis, many other airlines cost this into their prices without telling you how much it is and what it is for, all Ryan Air are doing is breaking the charge down.
  • Alexis
    It's a form of insurance though, not a charge. Do Ryanair give you the £2 back if there are no problems with the flight? It's disingenuous to slap it onto the customer. Do you expect a breakdown of costs incurred to the manufacturer before you buy a new fridge freezer?
  • Marky M.
    Len! Where are you in this hour of need?!
  • Dick
    > Falls foul of Consumer Protection from Unfair Trading Regulations 2008 IMO. No it doesn't. All airlines charge the customer something because of the european regulations that state they have a duty of care towards stranded customers. Ryanair want to campaign against it, so they make sure passengers know why they are paying extra, whereas other airlines just hide it in their total price. It is a charge, not a form of insurance.
  • RyanUnFair
    Well if you are stupid enough to fly with these guys then don't cry when that Irish man screws you over!!
  • wood
    Simple solution - I will not fly with them any longer. I would rather pay alittle more (and it is only alittle more after all the charges) with a better airline who are honest upfront. Thought paying for checking yourselves in and printing your own bloody boarding pass took the biscuit, but hey ho - another biscuit gone!
  • Frank B.
    By continuing to agitate the general public with this new levy "increase Ryanair profit tax" I feel safe in the knowledge that for every one person that books a flight with Ryanair ten more like myself will say "never again". O'Leary and Ryanair your bubble will burst. The Public are not idiots, stop treating them like they are.
  • oioioi
    Nothing really wrong with RyanAir. They are not worse (or better) than the rest. I fly a lot with all kinds of airlines (including RA), and I have to say that they're all pretty much the same. Are they treating you horrible at RA? Not really; they tend to be on time, which at least to me is very important. Are they super cheap? No, but they might be slightly cheaper than most of the others even after all the fees have been calculated in, at least if you're not travelling with a lot of luggage.

What do you think?

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