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November 30, 2009

Ryanair Prepaid Card: Mastercards Compared

Filed under: Budget airlines, Ryanair, Travel Money — Tags: , , , , , — ja @ 4:16 pm

So Ryanair have just announced that they will no longer be accepting Visa Electron as a means of payment in order to avoid their £5 card transaction fee.

Does this mean the end of their famous 1p flights, or indeed of any of their lowest price offers, where on any given day it is usually possible to book a flight somewhere on their network for less than £10, without paying any additional charges at all?

Well, unfortunately, it no longer seems possible to get away from these fees completely. Ryanair will still accept fee-free payment for all purchases made using Pre-paid Mastercards, but what they have effectively done is outsourced the fee charging to another provider. I’ve had a look around, and I can’t find any company offering totally fee-free pre-paid cards - why would they - at least banks can find extra ways of making revenue from their customers (sounds familiar?), whereas pre-paid card issuers can only really make money from levying a fee for the card itself, and maybe a few extra pennies by selling on the data.

So what’s the best option? Really depends on how often you expect to fly with Ryanair,  whether or not the other airlines will follow suit, and of course - how long this particular loop hole will last. First there was no fee for debit card purchases, then there was only no fee if you paid by electron, and now there is only no fee if you load up a pre-paid Mastercard. But who’s to say they won’t switch their allegiances to Visa come the end of next year?

To Ryanair, this is a clever cat & mouse game of making sure the majority of their customers pay the £5 card handling fee with their bookings. As a one-off charge, this wouldn’t be so bad, but the charge is levied on each sector - yup, that’s £40 for a family of four making a return trip. We might have grown used to extra charges in the airline industry, but there’s something particularly irritating about being asked to pay a fee just for the privilege of spending your money with a company. At least with airport charges, you know the airport is doing something, and with Air Passenger Duty, you know it is a rip-off tax which has nothing to do with the environment, but the money is going to a good cause like bankers’ bailouts. Even when you pay £3 for a cup of muddy coffee, you can at least physically see that you are getting something in return. But shell out £5 just to pay for your booking, and what do you see? Nothing - and we know this transaction only costs the airlines a few pennies to process.

Now I’m not going to say that Ryanair should scrap the card handling fee - we know that it is only by levying these extra charges that they are able to offer the 1p flights in the first place - so all I can suggest is that if you fly with Ryanair regularly, it is worth looking for a pre-paid Mastercard which charges the lowest possible fees. This will depend on your usage levels - look out for:

Pre-paid Mastercard Fees

  1. Application fee - varies from zero to £29.99 - with corresponding increases in other charges.
  2. Load fee - avoidable, sometimes by paying in using a particular method.
  3. Monthly fees - best to avoid if you just want a pre-paid Mastercard for use when making cheap flight bookings.
  4. ATM fees - shouldn’t be relevant if you are just using this card for flights.
  5. Foreign fees - note that for some flight bookings, you might be charged in Euros or local currency, especially when booking flight legs to UK airports where you start your journey in another country.

I’ve checked out a few price comparsion tables, the most informative being What Prepaid Card - although as with many of these websites, other options may be available. For frequent Ryanair bookers (especially if you have a habit of booking loads of flights, but not always turning up), the CashPlus Premium account looks like the best deal - pay a one off fee of £29.99, and you can then enjoy free (1p) flights ‘forever’ - or at least until the next change of Ryanair policy.

Less regular users would be better off with The Sun Prepaid Mastercard - a much lower application fee of £6.49, but you will be charged between 50p and £1.50 per booking (2.95% of value within these limits). This is still much more acceptable than shelling out £5 a pop.

November 23, 2009

7 Habits of highly effective travel cheapskates

Filed under: Aviation Economics, British Airways, Budget airlines, Budget flights, Easyjet, Flybe — Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , — ja @ 3:22 pm

7 Habits of highly effective travel cheapskates (based on The 7 Habits of Highly Effective People by Stephen R. Covey)

1.       Be active – hunt out the best deals. Get on all the emailing lists, have your electron card ready – and if you see a great deal, book it before it has gone.

2.       Begin with multiple destinations in mind – where do you want to go this year? How will you get there cheaply and efficiently – and can you visit several destinations in one trip?

3.       Put First Class Second – cheapskates only travel luxury when someone else is paying.

4.       Think gin/gin – don’t forget those duty free bargains, but make sure they will fit into your carry-on bag if you are travelling with Ryanair. And remember that most ‘duty-free’ offers aren’t really duty-free anymore - so do you want to save a couple of pounds on a bottle of plonk, just to lug it around with you for a week?

5.       Seek to understand and be understood – learn at least a few basic words of the lingo in any country you are visiting. It will also help prevent you from being ripped off by popular tourist traps, and make you many more friends.

6.       Economise – find more ways to creatively cut down your travel costs. Travel light, stay with those Facebook friends you haven’t seen for 20 years and eat where the locals eat. Don’t take any equipment with you that you can live without - you are travelling remember, not working - do you really need that laptop with you?

7.       Be sharp about what you saw – don’t try and cram in everything, just because it is in someone else’s guidebook. Go and visit the places that will excite you most, and enjoy the journey on the way.

 

Happy travels :)

 

November 6, 2009

Cheap flights to Denmark - Copenhagen v. Billund?

Filed under: Budget airlines, Easyjet, Ryanair — Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , — ja @ 4:43 am

I’m flying to Billund next week, courtesy of those kind folks at Ryanair, who sold me a one-way flight to Billund from Birmingham for just 1p. There’s various places in Denmark, Sweden and Finland that I want to visit, and I’ll be flying back from Helsinki to Gatwick with easyJet.

A few weeks ago, my brother went to a wedding in Malmo, Sweden, which is just across the fantastic Oresund bridge from Copenhagen. He flew with SAS direct from Birmingham to Copenhagen, and was waxing lyrical about the service. That’s all well and good, but in these price conscious times, it isn’t surprising to find so many people grabbing the cheap flights with Ryanair.

Now I know that everyone’s motivations for travel are different, but if you wanted to visit three of Denmark top attractions, then you might well start in Billund, which is home to Legoland, before heading on to Copenhagen via Odense, which is the birthplace of author Hans Christian Andersen.

Personally, I’m off to immerse myself in Danish urban design, so Odense’s network of urban parks will be the highlight of my trip, but say you are visiting various different places in Denmark, and you have a choice between flying with Ryanair to Billund (flights available from London Stansted, Birmingham, Edinburgh and Dublin) or with another airline to Copenhagen (wider choice of different departure airports).

Which would you do?

November 5, 2009

Is this the beginning of the end for bmibaby?

Filed under: Aviation Economics, Budget flights, Easyjet, Flybe — Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , — ja @ 9:41 pm

Following on from yesterday’s news that Lufthansa can’t find a suitable buyer for bmi, we’ve had confirmation today that jobs are going to be axed, and that routes will be curtailed at Birmingham, Manchester and Cardiff.

So, is it wise for bmibaby to concentrate their efforts on one large base at East Midlands airports. They say that they want to concentrate on ‘growth routes’, but with growth comes competition, and Ryanair are already very well established at Castle Donnington. Right now, can bmibaby really push themselves as the ones who offer a ‘more pleasant’ experience over Ryanair’s cut-throat service, or will customers continue to vote with their wallets and choose the airline which gives them the cheapest fees? When going after business passengers, it is much easier to play on offering services which take people closer to where they want to go, but is this so important for the leisure passenger - especially when East Midlands airport itself is playing a hybrid game of serving the three cities of Nottingham, Leicester and Derby, and also trying to poach passengers from Birmingham, without being directly adjacent to any of these cities.

Easyjet might be out of the way at East Midlands, but there will have been obvious reasons why they made a commercial decision to pull out. Baby reducing their presence at Manchester leaves room for Jet 2 or Easyjet to add more services, whereas Ryanair and Flybe will swoon over any signs of weakness at Birmingham, and leave tiny with very little opportunity to come back in once the economy starts growing again. As for Cardiff? Not exactly Ryanair’s favourite airport a few years ago, but if baby reduce their presence there, Cardiff airport operators will have many more reasons to do a deal with Ryanair.

This scenario could easily see bmibaby exposed as a one-airport operator within a few months, with very few other places to go to. It would then be only a matter of time before Ryanair came in and made a pincer movement to finally kill off baby for good.

Why don’t no frills airlines offer more cheap flights to Greece?

Filed under: Airlines, Aviation Economics, Budget airlines, Budget flights, Easyjet, Flybe, Ryanair, Thomson / TUI — Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , — ja @ 9:29 pm

I was asked on twitter by @Korb0s why there aren’t any Ryanair flights to Greece. The question could of course be extended to why there aren’t more cheap flights to Greece from all of the budget airlines, with Easyjet and Jet2 perhaps being the main exceptions. I narrowed down the 140 characted twitter answer to two words (airport monopoly), and said I’d give a bit more explanation later. So here are the key reasons:

  1. Airports monopoly. Greek airports operate on a monopoly basis, and to paraphrase Ryanair’s route development manager, ‘they wouldn’t know a commercial deal if it came up to them and slapped them in the face’. One of Ryanair’s biggest driving factors in developing new routes is the ability to secure the best possible deals out of the airports it wants to fly to. This can make or break a route decision just as much as whether or not they actually forecast demand to be there. If they get their sums wrong about demand, they can quickly drop the route, if they can’t screw a good deal out of the airports, they are stuck with paying high handling fees forever - that is the crux of the matter.
  2. Seasonality - no-frills airlines prefer to operate routes which have demand throughout the year. The market for flights to Greece has traditionally been dominated by charter companies, who offer packages during the summer season. Greece is not typically seen as a winter sun destination, and unlike destinations like Barcelona (Girona) or Granada, there aren’t any Greek airports which are close to ski resorts.
  3. Dispersal - when no-frills airlines have competed well against charter operators, they have opened up routes where they can put on a reasonable frequency of flights, and where a good range of resorts can be accessed from the destination airports. Apart from the capital Athens, Greek destinations are scattered around a plethora of islands, making no-frills flight routes to any one island less likely to be viable.
  4. Distance - a flight from London to Alicante is 914 miles, whereas a flight to Athens is 1,485 miles. This extra flying distance doesn’t just burn up a lot more fuel, it also means more crewing time, and more usage of the aircraft. For example, Easyjet’s 6:20 flight from Gatwick to Athens doesn’t arrive back into Gatwick until 14:20 - effectively half the day gone to service just one route. Sure, passengers have a higher perception of value for the longer routes, but it is still easier to juggle slots around two shorter routes than one longer one. At a regional level, Flybe have opened up a number of routes into various regional airports in France, but Greece would simply be out of the range of the Bombardier Q400 aircraft that they use on these routes - although flights to Athens from Birmingham using their Embraer 195 jets would seem to make reasonable sense.
  5. Ancilliary revenue - this is just a theory, but I would guess that as many Greek island destinations are fairly small, a large proportion of passengers use transfer buses to get to and from the resorts they are staying at. There is less benefit from having a hire car, and people who do might be more likely to rent a car just for the day. If this is the case, it means less chance of earning extra money for the airlines - but they should at least sell a few more sandwiches onboard their flights.

As always, this is just my tuppence, but I hope it gives a few insights into why there aren’t more flights to Greece from the UK. James

November 4, 2009

What does Warren Buffett’s train investment say about airlines?

Filed under: Budget airlines, Flights v. Trains, Ryanair, The Travel Business — Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , — ja @ 8:09 am

So, Warren Buffett has invested some $26 billion buying American freight operator BNSF, with news commentators hailing this as an ‘all-in’ bet on the future of the US economy. But there’s more to it than that - it is, of course, a huge leap of faith into the future of railways, even if lumping coal isn’t exactly as glamarous as swish new high speed train sets. But Buffett has never been about style over substance, and trains in Europe are usually associated with massive subsidies.

In typical long-term Buffett style, he has talked about growth potential of rail in the USA over the next 3 decades, and even if this investment is in freight railways, there is no doubt that passenger rail networks will also see substantial development over this period.

Compare this to Buffett’s attitudes towards airlines, after he lost 75% of his $385 million investment in US Airways back in 1995. He pointed out that the he didn’t think the US airline business had ever made money - and this was in an industry without the kind of state carrier subsidies which were common elsewhere in the world. Buffett is quoted as saying, in respect of the Wright brothers’ first flight:

“If there had been a capitalist down there, the guy would have shot down Wilbur. One small step for mankind, and one huge step for capitalism.”

Has anything changed in the airline industry since 1995? Well, there’s been plenty of deregulation across the pond, and plenty of former big names are no longer with us. In Europe, we have Ryanair’s Michael O’Leary echoing many of Buffett’s sentiments, describing the current situation facing European airlines as a ‘bloodbath’, and the ‘perfect storm’. Of course, Ryanair are one of the few airlines to buck the trend, whereas this morning’s announcement from Lufthansa that they can’t find a suitable bidder for bmi, and that consequently bmibaby are shedding jobs hardly comes as a surprise.

Despite all this, Warren hasn’t been put off from investing in flying alltogether, having ditched his own private jet, aka ‘The Indefensible’ back in 1998, in favour of buying private jet hire company NetJets.

November 2, 2009

Finding hidden cheap flights on Ryanair.com

Filed under: Easyjet, Ryanair, Uncategorized — Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , — ja @ 5:25 pm

My brother and I have been talking about going to Morocco for a while, but we’ve never got round to booking. There’s an element of being cheapskates here, especially as Morocco is Ryanair’s only non-European destination, and it falls within the higher tax band. My cunning plan was to skip this tax difference by flying out through Gibraltar, and then taking the ferry.

This was as much about enjoying the journey as it was about keeping Gordon and Alistair’s mitts off my cash - sure, I don’t want them to have any more of it than necessary, but there’s no point in paying more for something just because you think it is taxed less.

So the Ryanair price ‘index’ isn’t quite down to zero at the moment - the confusing ‘80% off our best fares’ doesn’t really mean much, when their cheapest fares are 1p - so are they now going to split the penny and offer me a flight for 0.2p? What the best deal actually meant was that the cheapest flights to Europe started from £3 - but their flights to Marrakech in Morocco were advertised at £34, from either Luton (much easier for my brother) or East Midlands (Coventry is fairly even between the two, but Luton is actually easier to get to on public transport).

So when clicking through to the results page, they have flights going down to £9.99, where the taxes and charges add up to £43, but they also have flights at just £10, and that is all you pay, full stop. Is this a glitch - I somewhat doubt it, that’s not Ryanair’s way of working. Is it a bargain - yeah, and return flights were also available a week later for just £10.

My brother had to get back to work a few days beforehand, and I have a concert to go to which made the £10 deal impossible. This is where Ryanair’s seemingly low fares suddenly rack up - the £9.99 flight working out at £45 with all the charges. So, time to head over to Easyjet to check out the price of that flight back from Gibraltar - £51 all in. For £6 more, I’m getting to enjoy flying out and back through different airports, and my Morocco trip should now include Casablanca aswell as Tangier. There will be a few extras for the train up to Tangier and the ferry to Algeciras, but for me that’s all part of the fun.

Happy travels!

*Note - ‘all in’ includes mandatory taxes and charges - in this case, I paid no fee for online check-in. Both of us are travelling without hand luggage, and I paid using my Co-op Visa Electron card.

7 Ways to Beat Air Passenger Duty Rises

Filed under: Budget airlines, Easyjet, Ryanair — Tags: , , , , , , , , , — ja @ 3:59 pm

    Yesterday, Air Passenger Duty on short haul flights went up by £1, but much larger increases were imposed on long haul and premium service flights. These taxes are set to rise again in November 2010 - and even if a change of government looks likely, there is little to suggest that the Tories will reverse this policy.

    This list was due for a little bit more embellishment, which I’ll try and get round to later in the week, but in the meantime, here are the key suggestions:

    1. Take a Private Jet - you will pay no taxes at all this way.
    2. Let Michael O’Leary pay your taxes - can’t afford a private jet? Look out for Ryanair’s special offers when they pay the taxes for you.
    3. Island hop around Scotland - ‘public service obligation’ flights in the Scottish Highlands & Islands are exempt from duty - and the views are simply stunning.
    4. Take the ferry or Eurostar to Paris or Amsterdam, and fly long haul from there - or even hop over to any European hub on a budget flight, and then continue from there. APD stings you much harder on long haul flights.
    5. Offset the tax by saving on duty free, or not paying other airline hidden charges - ok, so the government sees air passengers as an easy target. Chill out, and enjoy some savings on duty free. The best deals might be at your destination - shop around to see, but even though there aren’t any duty free allowances on short haul flights to EU destinations, these aren’t the ones with the highest taxes. Why not get the best of both worlds and fly via Switzerland or Norway - short haul destinations which also have a duty free allowance. If you don’t have a Visa Electron card by now, then you really can’t whinge about air passenger duty if you are booking flights with a low cost carrier like Easyjet or Ryanair. The taxes aren’t usually avoidable, but the card handling fees always are.
    6. Go all the way by train- this is easier than you might think, and thanks to the new Eurostar links to the continent, you’d be amazed how far you can get in a day from London - and think how much more you see on the way. Don’t fancy a long journey home by train? At least the return flight won’t be taxed so badly, as APD is only levied on the outbound journey - Alistair hasn’t thought out a way of taxing people to come in to the UK yet, but don’t encourage him too much!
    7. Take the ferry to Morocco (from Gibraltar) - ok, so the ferry fare will cost you about as much as the tax you will save, but Gibraltar is a great place to land, and why not add a ferry trip to your African adventure?

    Ryanair switch from high tax to high sun destinations

    Filed under: Ryanair — Tags: , , , , , , — ja @ 4:57 am

    So in their latest media release, Ryanair have stated that they are moving away from ‘high tax’ countries like the UK and Ireland, and setting up more routes in countries which have ‘reduced, or even cancelled their taxes’ - countries like Belgium, the Netherlands, Spain and Italy.

    The release states:

    Traffic at many Irish and UK airports has slumped, with Ireland facing a decline of 15% of its air traffic, and the UK set to lose almost 10% of its traffic.  We again call on the British and Irish Governments to scrap these stupid tourist taxes and reduce airport charges.  VAT receipts on visitor spend alone would be a multiple of the revenues generated from these tourist taxes.  The Belgian, Dutch, Greek and Spanish governments have led the way by scrapping passenger taxes and/or reducing airport charges (in some cases to zero) in order to stimulate traffic growth.  We are switching a material proportion of Ryanair’s Winter capacity and growth away from high tax, high cost countries like Britain and Ireland in favour of “no tax”, lower cost countries like Belgium, Holland, Italy and Spain. 

    Now let’s not pretend that the low countries make any significant impact on Ryanair’s route network - they only have one signficant base here, and that is at Brussels Charleroi, which has been subject to different controversies over airport subsidies. So the real move from summer to winter is from the UK and Ireland to Spain and Italy.

    Is this really all about tax, or does it have more to do with there being just a little bit more sunshine in these countries over the winter months?

    Ryanair to stop growing?

    Filed under: Ryanair — Tags: , , , — ja @ 3:44 am

    Reading through Ryanair’s latest results figures, it seems that Shannon Airport might not be the only company which doesn’t want to yield to their aggressive cost-cutting demands. Ryanair have been in talks with Boeing about the potential delivery of another 200 aircraft, which they want to wrap up before the end of the year.

    It looks like working with other manufacturers isn’t on the table - Ryanair famously ‘fell out’ with Airbus after ‘nearly’ doing a deal, and then walking away to Boeing just before the contract was signed. Ordering smaller Embraer E-195 jets might give Ryanair access to some of Europe’s smaller runway airports, but they seem to have put enough obscure places on the map without the need for such aircraft, and operated a dual-aircraft fleet just doesn’t seem to be in accordance with Ryanair’s low cost model.

    The release states:

    We see no point in continuing to grow rapidly in a declining yield environment, where our main aircraft partner is unwilling to play its part in our cost reduction programme by passing on some of the enormous savings which Boeing have enjoyed both from suppliers and more efficient manufacturing in recent years. We would prefer to grow, but if Boeing doesn’t share our vision, then I believe that Ryanair should change course before the end of this fiscal year and manage the airline  over the next three years to maximise cash for distribution to shareholders.

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