Ryanair charges ‘should be scrapped’

RYANAIR, the airline that charges €10 (£12) for using a debit card to buy a return ticket online, will have difficulty defending the fees during a British antitrust investigation, lawyers said.

Such charges are misleading and should be scrapped, the British Office of Fair Trading said. Ryanair’s claim that its “administration fee” isn’t affected by the ruling is unlikely to hold up, said Robert Vidal, a competition lawyer at Taylor Wessing in London.

“Calling the charge an ‘administration fee’ or mentioning the option of a pre-paid MasterCard is unlikely to make any difference,” Vidal said in an interview.

The decision doesn’t target specific companies and follows a three-month probe requested by Which?, a British consumer-rights group that said Ryanair was among airlines improperly charging travellers to use their own money. British consumers spent 300 million pounds in 2009 on such charges, the OFT said.

Ryanair says the fees cover costs for its booking system, not just payment processing, and can be avoided by using a pre-paid MasterCard instead of a regular credit or debit card.

The Dublin-based company doesn’t impose any debit- or credit-card transaction fees and is one of the only airlines to provide fee information on its home page, said Joe Carmody, a Ryanair spokesman.

Surcharges are potentially misleading, “particularly when free payment mechanisms are only available to a small proportion of consumers, making a surcharge effectively compulsory,” the OFT said in a statement. No more than 5% of Britain’s 50 million adults have pre-paid MasterCards, the OFT said.

Ryanair’s fees are vulnerable to the decision and may need to be incorporated in the ticket price, rather than tacked on at the end, said Gillian Sproul, a lawyer at Mayer Brown LLP.

The OFT can’t stop the surcharges altogether, said Marjorie Holmes, an antitrust lawyer at Reed Smith LLP in London.

“My guess is the fees will survive — they may have to reduce them a bit,” Holmes said.