Ryanair set to earn €23m from €5 baggage charge during peak season

RYANAIR could rake in €23 million with its€5 hike on checked-in luggage during the peak summer months.

This news comes as the airline reported that the number of passengers it carried in March increased to 5.3 million from 4.7m in the same month a year earlier. The company’s load factor or percentage of seats filled rose to 79% from 77%.

Ryanair also announced its seventh route from Kerry Airport to Dusseldorf (Weeze) from July 1.

It is increasing the charge on checked-in baggage from €15 to €20 during July and August, its two busiest months.

Goodbody analyst Eamonn Hughes said assuming a 30% penetration rate on checked-in baggage the move could see the airline generate €23m. Bloxham’s Joe Gill agrees and said it equates to about 7% of net profits produced in the year to March 2010. The shares closed down less than 1% at €3.95.

However, travelsupermarket.com’s Bob Atkinson said the baggage charges increase will be “a real blow for families travelling on a budget”.

“Far from being the ‘world’s favourite airline’, Ryanair is in danger of alienating its customers. Whilst there are ways to travel lighter, a family of four going away for a week would struggle not to put at least one or two pieces of luggage in the hold, especially bearing in mind that the weight allowance is lower than other airlines at only 15kg per bag. So potentially that could add at least £70 (€80) to a return flight with the low-cost airline.

“However if a family of four were to forget to check their hold luggage in online, it could them an up to an outrageous £320 for a return trip.”

Meanwhile, US airline Spirit Air has announced it will start charging as much as $45 (€34) for carry-on bags. It said the new charge will help the airline lower base air fares. The fee applies to carry-ons placed in overhead bins, while personal items placed under the seat remain free.

Mr Hughes said Ryanair will likely be watching consumer reaction to Spirit Air.

“We are not so sure Ryanair will necessarily follow suit given that its decision to charge for checked-in luggage was led by a move to reduce airport handling charges as well as a revenue source,” he said.