Airlines ‘cash in’ as extra costs skyrocket
- Passengers face dizzying additional costs, such as bag check-in
- EasyJet’s average add-on per person has increased by 78% since 2013
- Global airlines earn about a fifth of their total revenue from these add-ons.
Airlines have been accused of “taking cash while they can get it” as the cost of add-ons continues to rise for tourists.
In addition to increased fares, passengers face dizzying additional costs, such as checking bags or sitting together.
Ryanair’s average add-on per person has risen 70 per cent since 2013, now reaching £19.56, while EasyJet’s has also shot up 78 per cent, from £11.38 to £20.22 over the same period. time.
Matthew Adamo, a partner at AIP Capital, the aviation asset management arm of 777 Partners, said this was an opportunistic move as travel continues to recover.
‘It’s a high-demand environment. We are coming out of the pandemic, which was a very tight and scary operating environment. And I think the philosophy of these management teams is that we should take the money while we can get it,” he told the Mail.
Flight fares: EasyJet add-ons average £20, an increase of 78 per cent since 2013
“They want to push the limits of fares and ancillary services as much as they can until they find out where that point is, where the passenger substitutes the ticket or just doesn’t travel,” he added.
Global airlines earn about a fifth of their total revenue from these plugins, according to research firm Ideaworks.
Susannah Streeter, an analyst at Hargreaves Lansdown, said: “These inflight add-ons are very lucrative for airlines and add a great cushion to the bottom line.” For now, these price increases don’t seem to deter passengers from spending money.
“However, while bookings will remain strong in the coming months, the deepening cost of living crisis due to high interest rates will likely make passengers more sensitive to additional costs.” She warned there may be a tipping point for these “nice to have” extras.
Concern: Rishi Sunak ordered a review of ‘drip prices’
EasyJet prioritized increasing its ancillary revenue during the pandemic to move closer to budget rivals Ryanair and WizzAir.
This included a significant change to its hand baggage allowance in 2021, when EasyJet began charging customers to bring even small bags on board.
There have been calls to give the industry’s regulator – the Civil Aviation Authority – more power to compel airlines to add up-front charges.
In June, Rishi Sunak ordered a review of ‘drip pricing’, whereby companies hide the true cost of products and services by charging consumers additional fees.
Last year, the Markets and Competition Authority noted concerns about this practice. The government is considering giving the watchdog powers to tackle trickle-down prices, such as imposing fines on companies.