Sneaky ways airlines are charging us and getting very rich

Airlines have found new ways to slug us with extra fees. And this is the extraordinary amount of money they’re earning from it, news.com.au reports.

The price of my recent Ryanair flight from the Czech Republic to Poland was an absolute steal. Being a millennial, I’ve certainly paid more for a cafe breakfast.

The basic seat price was so affordable I decadently upgraded to “priority plus” for a few extra perks, like a carry-on bag and reserved seat — you know, silly little indulgences like that.

Even though I was forking out for those extras, the overall cost was still so low, I’d have been forgiven for wondering how airlines managed to make money at all with such cheapskate fares.

The answer was in the small print of my booking confirmation email.

Ryanair — the no-frills Irish airline I’d never flown before this — said I had to check in online, and download or print my boarding pass in advance, or I’d be charged €50 (about $A90) to check in at the airport like people have done since the dawn of aviation.

Not that I wouldn’t have checked in online anyway (again: millennial), but that €50 fee cost more than many Ryanair airfares in the first place. Ryanair isn’t the only airline with this approach.

It’s part of how airlines, especially budget airlines, keep the cost of their seats so low — they slug us for every other aspect of the experience.

And it’s been earning them an extraordinary amount of money.

A new report has lifted the lid on the soaring value of ancillary revenue — the money airlines made through extra fees for seat reservations, checked luggage, cabin baggage, in-flight food and drink and, in some cases, even traditional airport check-in.

And the value of that revenue is soaring, the joint report from research firm IdeaWorks and Dublin travel tech company CarTrawler found.

In the the past decade, ancillary revenue has increased by about $38 billion for the world’s top 10 airlines.

US airlines United, Delta, American and Southwest were the biggest earners from ancillary revenue in 2017, followed by Ryanair, Air France/KLM, the Lufthansa Group, Alaska Air Group, Air Canada and easyJet.

In total, airlines made $65 billion from ancillary revenue, also called “a la carte” revenue, in 2017.

Qantas didn’t make the top 10 ten list, but was among the biggest ancillary earners in 2016, overwhelmingly due to its frequent flyer program.

“Ten years ago, the top ten airlines, as rated by total ancillary revenue, generated US$2.1 billion ($3.1 billion),” IdeaWorks and CarTrawler said in a joint statement.




And a British report has warned the practice could also be unsafe, as separated family members would be scrambling to find each other during an emergency, slowing any critical evacuation process.

2017 TOP 10 ANCILLARY REVENUE RANKINGS (NZ$)

1. United (USA): $8.6 billion

2. Delta (USA): $8 billion

3. American (USA): $7.9 billion

4. Southwest (USA): $4.6 billion

5. Ryanair (Ireland): $3.4 billion

6. Air France/KLM (France/Netherlands): $3 billion

7. Lufthansa Group (Germany): $2.9 billion

8. Alaska Air Group (USA): $1.9 billion

9. Air Canada (Canada): $1.9 billion

10. easyJet (UK): $1.9 billion

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