IRELAND’S two leading airlines are making over €285 million clear profit per annum by holding on to taxes and charges paid by passengers who fail to show up for flights.
The operators of a new service to assist Irish air travellers to reclaim refunds of taxes, fees and charges (TFCs), claim Ryanair and Aer Lingus are engaging in “unfair practice” over their handling of the issue.
The company, Airtaxrefund.com, said it had dealt with passengers of over 500 flights since its service was launched last October.
A survey of such claims indicated Aer Lingus owes an average refund of taxes, fees and charges of €40 per passenger and Ryanair an average refund of €35 per passenger.
Such refunds include Government taxes and airport charges as well as handling and baggage fees, insurance as well as priority boarding and seat reservation charges.
Airtaxrefund chief executive, Brian Whelan, said the average amount of recoverable TFCs per passenger, after allowing for the administration charge imposed by airlines is €0 for Ryanair and €16.30 for Aer Lingus.
The results would indicate Ryanair prices its administration charge for processing refunds at a level to discourage any passenger from seeking their money back.
Airtaxrefund estimates the true proportion of passengers that book flights, but subsequently fail to travel, is much higher than originally believed. It claimed previous estimates of the value of retaining refunds for airlines was based on a 5% “no-show” rate. However, it believes the true figure is considerably higher. A British study indicated the rate could be 15%.
Even taking a “conservative” estimate of 10%, Airtaxrefund calculated such a level would have generated €247.1m for Ryanair last year and €38.8m for Aer Lingus. The combined figure would rise to almost €430m if the “no show” rate was 15%.
Airtaxrefund has called on the airlines to change their practices by reducing or eliminating administration fees which currently cost up to €30 per passenger or per flight. “This is a randomly selected amount designed solely to discourage passengers from collecting what is rightfully theirs,” said Mr Whelan.
He also criticised the airlines for imposing a randomly applied deadline of 30 days on passengers to apply for a refund.
The National Consumer Agency has also warned airlines that it is considering a High Court challenge to compel them to refund TFCs to passengers who cancel flights. Ryanair also overcharges its Irish customers by almost €1m per year for the cost of providing wheelchair services for disabled passengers.
The no-frills airline imposes a levy on passengers at Dublin Airport that is more than 50% above the charge which the airline must itself pay to the Dublin Airport Authority for access to wheelchair services.
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