Ryanair face possible EU tax inquiry

therecklessone

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Ryanair could face an EU investigation into alleged misstating of taxes and airport passenger fees on its European routes.

The low-cost carrier has been accused of systematically inflating charges added to ticket prices for flights from airports including Dublin, Treviso, Charleroi, Rome, Pisa and Alghero, a practice that may breach EU law.

Tut tut.

Victor

http://home.eircom.net/content/unison/national/8449977?view=Eircomnet

Passengers paying €17m in Ryanair phantom tax
From:The Irish Independent
Tuesday, 11th July, 2006

Airline chief O'Leary defends 'airport levy' as EU probe looms

RYANAIR is charging passengers almost €17m a year in phantom taxes, it can be revealed today.

This is the amount of 'taxes, fees and charges' levied by the airline on Irish passengers - but not paid out to government or aviation authorities.

Although Ryanair typically charges passengers €20.64 flying from Dublin in what it calls 'taxes, fees and charges' neither the government nor any local authority levies any tax on passengers leaving the airport.

The European Commission said yesterday it is studying the need for new rules to govern airline ticket pricing.

That followed a German TV programme which accused Ryanair of mis-stating taxes and airport passenger fees.

The programme prompted a number of MEPs to call for a Commission enquiry.

A Commission spokesman said yesterday that several members of the European Parliament had raised concerns about the lack of transparency in taxes and charges on air fares.

But no inquiries are currently under way.

Ryanair charges a typical passenger travelling from Dublin to London €20.64 in 'taxes, fees & charges'.

No breakdown of the charges is automatically given.

Passengers who click an internet 'details' box are told that €5.24 is made up of insurance and a wheelchair charge. The remaining €15.40 is a 'PSC' with no explanation of what a PSC is.

A Ryanair spokesman said the PSC was a passenger service charge.

It is made up of payments which must be made to Dublin Airport Authority for the use of the airport and the Irish Aviation Authority for the use of air traffic control.

However, a number of industry sources said there is a significant difference, estimated at €2.50 per passenger, between what Ryanair charges Irish customers and what it pays out.

Any difference is pure profit for the airline.

Ryanair carried 7m Irish passengers in the past 12 months, bringing the overpayment by Irish customers for a set of charges, including a non-existent tax, to more than €17m.

This figure does not include the other inventive charging mechanisms which help boost the airline's bottom line.

For instance in the 12 months to the end of March 2005, the airline made €37.5m in 'taxes, fees & charges' from customers who booked flights but did not subsequently travel.

Aside from what Ryanair calls the 'total cost of flight' the airline also levies a €2.50 credit card charge.

Customers making one payment for a family or other group are charged €2.50 for each member of the group for each and every flight that they take, although the credit card company levies only one charge against the airline.

The Ryanair spokesman yesterday denied any suggestion that levying taxes where none apply might confuse customers.

Yesterday, Ryanair chief executive Michael O'Leary said using the term taxes was justified because the airline pays what he called "airport taxes".

Ryanair said reports it was mis-stating charges were "inaccurate and untrue". No Ryanair passenger had ever been overcharged, it said.

The EU Commission has begun a study of airline pricing generally.

A Commission spokesman said: "On the basis of this study, the Commission will examine whether any sector-specific rules are needed to complement the general consumer protection rules which already exist."

Tom McEnaney

BuffyBot

Tut tut.

Don't forget to tut tut at pretty much all the low-cost carriers then. If the EU investigates, pretty much all of them will be getting looked at.

therecklessone

BuffyBot wrote:

Don't forget to tut tut at pretty much all the low-cost carriers then. If the EU investigates, pretty much all of them will be getting looked at.

I'm a defender of the faith, not usually one to have a pop @ Ryanair at all.

Ham'nd'egger

I always wondered just why Aer Lingus charged different rates for taking off from Dublin to Ryanair; now it is that Ryanair are overcharging us. Well, shock horror :rolleyes: