Irish ultra-low carrier Ryanair has emerged as the carrier that is levying the most for ‘extras’ like seat selection, baggage check-in and insurance, in Europe.

The study also found almost 89% of all airlines charged for ‘at least one extra’, with the figure rising to 97% among European carriers.

Entering The Controversial Territory
In August 2023, an elderly couple were charged 110 pounds by Ryanair for new boarding passes after they mistakenly checked in to the wrong leg of their flight.

Ruth Jaffe and Peter Jaffe had to pay the fee as they accidentally downloaded their return boarding passes instead of the outgoing ones for a flight to France.

Ruth Jaffe told the media about finding Ryanair’s website “very confusing” but thought she had printed the correct tickets. However, they realised their mistake after arriving at the airport.

In fact, the website of Ryanair, along with the ones of Jet2.com and Tui, has been rated as the worst major airlines operating in the UK for website accessibility, as the country’s Civil Aviation Authority (CAA) stated that there was “still a way to go” for the industry to provide a smooth digital experience for all passengers.

Airlines’ Fascination With The ‘Add-ons’
United States-based airline Spirit Airlines got the top rank in the NetVoucherCodes study, with total additional costs of 736%, seven times higher than the base fare. Spirit was followed by Mexican low-cost airline Volaris and another low-cost US airline Frontier Airlines.

Talking about Ryanair, the budget airline has generated 18 billion pounds in revenue from the ‘add-ons’ over the last decade.

Analysis from The Telegraph also found charges for services like booking seats and stowing luggage resulted in a surge in “ancillary revenues,” which have risen from 910 million pounds in 2013 to 3.84 billion pounds in 2023. These additional fees now constitute nearly a third of the Irish carrier’s total revenue, marking an increase from one-fifth in 2017.

Henry Harteveldt, president of travel industry analytics firm Atmosphere Research, told USA Today that during the 2008 oil crisis, American was the first airline to levy luggage charges and others followed suit.

According to an April 2023 report from IdeaWorksCompany and CarTrawler, “Airlines are tapping into the gold mine that is excess baggage fees in a big way, with revenue from charges accounting for 4.2% of global airline revenue.”

So the trend is clear here, ‘luggage fees’ has become the new cash cow for the airlines.

US Government Gets Tough
During his State of the Union Address earlier 2023, United States President Joe Biden spent nearly two minutes of his speech decrying ‘junk fees.’

Reacting to it, United Airlines and Frontier Airlines started allowing children under age 12 to sit next to an adult without extra fees.

Biden administration has been aggressively pushing for the ‘Junk Fee Prevention Act’, which would affect airline seat selection rates too. It is actively asking the US Congress to pass the legislation, which mandates refunds to passengers who cannot get adjacent seats for children during their journeys.

The legislation has the potential to be turned into a battle between industry lobbyists and the political will of the Biden government.

Consumer rights expert Martyn James told the Guardian that the add-on culture had increased dramatically and those airlines had been stopped in the past from some practices.

“They used to charge you to pay by debit or credit card, but how else do you buy online? They were told not to do that. When these revenue streams were closed they looked at the process and thought, what else can we charge for?” he stated further, while asking the ticket comparison websites to include extra costs in the overall price from the start.

“I am having to tell people to be cynical and don’t assume a deal is a good deal,” James remarked, while batting for the UK Civil Aviation Authority to be given more power to make airlines add charges up front (during the ticket booking process), apart from noting that sometimes more expensive flights might be a better option, if every charge gets included in the ticket.

The Road Ahead
Katy Maclure of Jack’s Flight Club, which monitors cheapest airfares, batted for customer awareness of the ‘hidden fees’ as more airlines employed the tactics.

The official also gave the examples of Lufthansa and British Airways including charges on checked bags to some locations. Only a few airlines like Emirates are covering all the fees in the initial price range.

James believes passengers need to be realistic about their luggage needs, apart from carefully reading the airline’s terms and conditions about cabin bags.

Henry Harteveldt thinks reforms like the ‘Junk Fee Prevention Act’ may result in higher base airfares, thereby making tickets costlier than ever before.

Airlines have started waiving the fee to check bags once a traveller achieves ‘Elite Frequent Flyer Status’ in their loyalty programs. Yes, this status comes with a lot of perks, including, bag free waiver, but not everyone gets the status. Airlines are also comping off checked bag fees for passengers having lucrative co-branded credit cards. In fact, these credit card partnerships help the airline to make more money than what selling its own tickets does, if Harteveldt’s words are to be believed.

Airlines also use a technique called “social proof” to upsell products like trip protection, as they ‘suggest’ that since ‘many passengers’ have ‘already opted for it while booking the tickets’, you should also do it. Experts don’t see these offers as having real value for customers, so avoid this trap, because opting for it will only make your ticket cost go higher.

Also, budget American airlines like Spirit and Frontier offer ultra-low fares while charging more for basic add-ons, including carry-on bags and seat selection. Skipping the extra fees means forgoing these vital amenities. This is another tricky decision-making area for passengers. If we have the offer for upgrading our seats, along with adding a bundle of other benefits, should we go for it?

Avoiding the ‘add-on fees’ looks like a difficult task for the passengers, unless acts like ‘Junk Fee Prevention Act’ arrive with some knee-jerking clauses for the airlines.

The post IF Insights: Meet ‘Add-on fees’, airline industry’s latest cash cow appeared first on International Finance.

The Ryanair CEO informed the BBC that during the next five years, the airline’s average fare would increase from approximately €40 (£33.75) last year to approximately €50.

But despite the increased expense of living, he asserts that he thinks people will continue to fly regularly.

On BBC Radio 4’s Today programme, Michael O’Leary said, “You won’t see those fares for the next couple of years at the bottom end of the marketplace, our extremely cheap promotional fares — the one euro fares, the €0.99 fares, even the €9.99 fares.”

The increase in household energy prices that is driving up airfares is also reducing people’s discretionary incomes. The airline’s CEO however stated that he anticipates customers to look for less expensive alternatives as opposed to reducing their flying schedule.

“We predict that individuals will keep taking frequent flights. However, I believe that individuals will become much more price sensitive, and as a result, in my opinion, people will trade down from their many millions,” Michael O’Leary added.

In recent years, as air travel has grown more affordable, more people have taken flights in addition to having annual holidays and short trips overseas. In order to provide low-cost, no-frills services, airlines like Ryanair, Easyjet, Vueling, and Wizz Air have competed.

Commercial aviation presently contributes 2.4% of the world’s CO2 emissions, and there is pressure on the industry to lessen its influence on the environment through initiatives like campaigns to encourage rail and road travel.

The focus on lowering emissions from air travel, according to Michael O’Leary, was “misplaced,” and he asserted that shipping and road transport contributed to CO2 emissions more significantly overall.

Although Ryanair was making investments in more fuel-efficient planes, he claimed that switching from gasoline and diesel to electric road vehicles would result in far bigger reductions in the consumption of fossil fuels.

People have shown an eagerness to board planes after the COVID pandemic, which significantly hampered international travel.

However, as demand for air travel has increased, staff shortages at airports and airlines have resulted in delays and cancellations, both domestically and internationally. Some travellers have been required to wait for hours or make last-minute travel arrangements.

People have demonstrated a strong desire to board aircraft following the COVID pandemic, which severely interrupted international travel.

Staffing issues at airports and airlines have caused delays and cancellations, both in the UK and abroad, as demand for air travel has increased. Some travellers have been required to wait for hours or abruptly reschedule their travel plans.

Michael O’Leary claimed that he had “very little sympathy” for airports, claiming that they were aware of schedules months in advance and that security personnel, who were under their control, needed less training than pilots.

He charged Heathrow with “mismanagement” for limiting the number of travellers using the airport this summer.

The cap has been supported by Heathrow, who claimed that it was required to deliver dependable and secure service.

According to the Airport Operators Association, airports have been hiring workers since the end of last year, and the majority of passengers are currently travelling with little to no inconvenience.

Although Michael O’Leary expressed “hope” that the issues at UK airports will be rectified by next summer, he warned that Brexit would continue to make it difficult to find qualified candidates.

Despite having its headquarters in Dublin, Ryanair offers hundreds of routes to and from the UK.

He said that Britain’s exit from the EU had been a “disaster for the free movement of labour” and urged the government to “be honest and own up” to its role in the labour shortages.

Michael O’Leary asserted that the UK labour market was “fundamentally broken” and that it was time for the country to think about undoing “some of the foolishness of Brexit.”

The future UK prime minister should, according to him, make a free trade agreement with the EU, which includes labour mobility, a top priority.

The post Is the era of cheap flights over? appeared first on International Finance.

The aim of this initiative is to provide recommendations on the sustainability aspects of the EU’s policy design to support Sustainable Aviation Fuels (SAF). Ryanair joined the likes of KLM, Easyjet, Air France and the airlines of the International Airlines Group including Aer Lingus, British Airways and Iberia.

Ryanair director of sustainability, Tom Fowler told the media, “A transparent and future-proof regulatory framework for SAFs can support and equip airlines in their fight against climate change, and we are proud to be part of this initiative… With this new initiative, we take a further step to the achievement of our decarbonisation targets and the broader UN Sustainable Development Goals.”

Ryanair revealed that for the month of February 2021, it carried just half of a million passengers, whereas, in February 2020, it had carried around 10.5 million passengers. This is mainly because the carrier had halted a majority of its flights between Ireland and the UK as a result of strict entry requirements implemented by both nations.

The Swords-headquartered carrier also said that its base at Cork airport will not reopen until the winter at the earliest. According to Ryanair, the decision is based on the plan by the airport authorities to carry out work on its 2.1 kilometre long runway during September, October, and November.

The post Ryanair pledges support towards development of sustainable aviation fuels appeared first on International Finance.

Moreover, during cabin crew strike action, Ryanair issued protective notice to 100 pilots and 200 cabin crew based in Dublin. Rather than engaging with workers and attempting to address the grievances that led to the strikes, the company has instead threatened job cuts. ITF and ETF previously warned Ryanair about obstructing workers’ right to strike. Practices such as surveying workers about their intentions on strike days and inducing colleagues to break strikes could contravene international norms on freedom of association.

This irresponsible and immature response to its workforce suggests that Ryanair has a long way to go before it can be considered a fair employer. Calls for industrial action will continue until the company makes good collective bargaining agreements with unions. ITF and ETF support all Ryanair workers in any lawful industrial action they feel necessary to win a fair deal from the company. If Ryanair continues to ignore the legitimate demands of its workforce then further strikes over the summer are probable.

The post ITF and ETF stand in solidarity with striking Ryanair pilots appeared first on International Finance.

More than 2,400 buy-side analysts, asset managers, and sell-side researchers at over 800 firms named the best chief executives, top CFOs, investor relations professionals, and investor relations companies across 31 business sectors.

Buy-side analysts, money managers and sell-side researchers at securities firms and financial institutions that cover the region identified up to four companies that excel in up to seven investor relations attributes including:

• Senior executives are accessible
• IR team is well informed and empowered to speak authoritatively on the company’s behalf
• Timely and appropriate level of financial disclosure
• Responds quickly and thoroughly to requests
• Most constructive conference calls
• Highest quality of meetings through road shows/reversed road shows/conferences; and highest quality of corporate documents and investor kit materials.

“MiFID II continues to drive change and create noise across the investment process for buy side, sell side and corporate, nowhere more so than in Europe. But this aside, this just continues to highlight the need to make sure companies are engaging smarter and more strategically with investors to ensure that their story is understood properly,” says Will Rowlands-Rees, Managing Director of Research at Institutional Investor, “To that end we’re thrilled with the continued depth of response from the European investment community on investor engagement, and are delighted to be working with many of Europe’s leading companies to help be smarter and more discerning around their investor relations efforts. We’d like to congratulate all the recognized companies for their ongoing focus on excellence, and look forward to helping them construct and measure investor engagement programs in the year ahead.”

Last year, Institutional Investor launched its inaugural small and midcap rankings, recognizing those companies with less than US$10bn in market capitalization to great success.  This year, a resounding set of feedback from 1,800 investment professionals demonstrated that investors continue to look for value beyond the largest companies, and that those companies are demonstrating strong capabilities in investor engagement to those investors.

The post Intesa Sanpaolo, Iberdrola and Ryanair win Institutional Investor’s 2018 All-Europe Executive Team Rankings appeared first on International Finance.