Airlines Increase Charges for Debit Cards

You may not be too surprised to hear but airlines have increased their charges for debit cards. What may be more of a surprise is that it has increased by over 1,000%. Airlines are constantly charging admin or booking fees to the cost of flying but these latest increases have caused some concerns.

A survey found that between 2004 and 2011 one airline increased their charges for paying by plastic by 1,400%. Payments by one airline used to be free in 2004 but now they charge £8 for the privilege. The same airline also increased charges for credit cards over the same period by 50%. In fairness some airlines have kept in line with inflation when it comes to credit card payments and still keep debit card charges free.

However according to recent findings a total of £43,500,000 has been charged by airlines since June of this year. 39% of all flight bookings are made using a debit card whilst 61% use a credit card. One estimate reckons that the airlines rake in a total of nearly £100 million per year.

So are these charges justified? Well a typical charge is something in the region of £9 while the true cost to the airline is 20p. The airlines argue that they need to charge this much due to the costs incurred in the financial services and transaction fees. However the real cost of processing a credit card is around 2% which is much less than the airlines charge.

A complaint was lodged with the Office of Fair Trading which called for an investigation into these charges. The Office of Fair Trading upheld the complaint and promised to enforce measures to take action.

The Consumers Rights Directive that will come into force in the next couple of years could mean that companies who impose excessive charges for things such as card payments could well face prosecution.

Airlines would also argue that they too have a large number of charges that they will have to meet such as private jet tax which itself caused controversy due to the fact that people who opt for private jet hire are exempt.

In 2009 there were talks of charging passengers for using the toilet. Another proposal is to reduce the number of toilets on airlines from 3 to 1. This could see 189 passengers on a flight queuing to use a single toilet.