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British airlines are upset by news that the government plans to require them to alter their pricing strategies. There is discussion of potential increases in base airfare of £80 when the practice of “drip pricing” is prohibited.
Starting in the mid-1990s, with the rise of budget airlines, most airlines have adopted “unbundled” ticket prices. This means that additional charges are applied for services such as checked bags, assigned seats, and larger cabin baggage. These extra charges, also known as “ancillaries”, have become a crucial aspect for airlines.
In the most recent fiscal year of Ryanair, which concluded in March of this year, 36 percent of the airline’s income was generated from ancillary services.
The King’s Speech addressed the government’s determination to address pricing practices and take action against potential consumer harm. Airline travelers are reported to be at a higher risk of experiencing such harm.
However, according to a high-ranking individual in the aviation industry, purchasing a flight is comparable to ordering a pizza – if you desire additional toppings, you must pay for them.
According to the source, airlines have been meeting legal pricing requirements for over ten years, which is uncommon among industries.
According to the Department for Business and Trade (DBT), a “dripped fee” is defined as any additional fee that is applied after the product and its base price have already been presented together.
According to a DBT report, 81% of airline providers charge additional fees that can cause harm to travelers.
The standards for determining harm that are relevant to airlines include:
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An additional fee that exceeds 25 percent of the initial cost.
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A fee that is introduced towards the end of the checkout procedure.
Airline companies maintain that they follow the guidelines set by the Civil Aviation Authority, which mandates that all displayed fares must be accessible. They also ensure that any additional fees, known as “optional price supplements,” are clearly communicated at the beginning of the booking process.
A representative from Airlines UK, which represents the main airlines in British aviation, stated that providing unbundled products and more options in response to consumer demand is a key way for airlines to compete and has played a crucial role in making air travel accessible to everyone.
“Any moves to reverse this are clearly not in the interest of UK consumers and we will respond to the government’s proposals when we have more details.”
A prominent airline announced that 33% of their passengers only purchase the standard fare. They also stated that according to government proposals, these individuals may be charged for additional services that they do not require.
The DBT’s ancillary statistics are also a source of concern for carriers.
The DBT reports that the average cost for baggage is £65, while the standard fee for a “fast track” service is £28 and the median price for reserving a seat is £15.
The government claims that the total of these amounts, which equals £108, is 95% of the median airfare of £113.70.
The DBT reports that these additional items are expensive compared to the base product prices and were added towards the end of the checkout process.
On a typical easyJet flight, a 15kg checked bag costs £31, and a 23kg case costs £40.
For the longest British Airways trip, which spans 10,672 miles from London to Singapore and then to Sydney, the fee for a checked bag weighing 23kg is £30.
Source: independent.co.uk
