Monarch Airline's U-turn on surcharges75% paying by credit card to be hit by higher fees
18 April 2012
Three quarters of Monarch Airline's passengers who pay by credit card are being hit by higher surcharges after the budget airline changed the way it calculates fees, Which? Money can reveal.
Monarch used to charge a fixed £10 fee for every credit card booking, and said last year it wanted to reduce that cost. The airline was also one of the first to support our campaign to scrap debit card charges, saying there was 'no justification' for advertising one price and then hitting customers with hidden fees.
However, Monarch now charges the higher of either £5 per booking or 4% of the overall cost for people who pay by credit card, which it says covers the cost of processing payments. So customers spending more than £250 on a credit card will be worse off.
Three quarters of credit card-paying customers hit by new surcharge
When we questioned Monarch, a spokesman admitted that only 25% of its customers choosing to pay for flights by credit card are now paying less than the previous £10 fixed-rate fee.
A couple flying with Monarch from London to Alicante in the middle of June will have to pay about £360 for return flights, meals and checking two bags into the hold – resulting in a surcharge of £14.50.
Ryanair hikes voucher fees
Meanwhile, another budget airline, Ryanair, is now charging a £6 processing fee if you buy gift vouchers from them. This is a £1 increase, and makes the cost of using vouchers the same as the processing fee for paying by credit or debit card with the airline.
If the cost of a flight is cheaper than the value of the voucher you will not get any change and some of the value will be lost.
Which? surcharges campaign
This all comes after the government confirmed it will implement a ban against excessive debit and credit card surcharges following the Which? super complaint to the Office of Fair Trading (OFT) in March 2011.
Which? wants all unavoidable fees to be included in the headline price, and has called on firms to state any additional fees upfront so that consumers can better compare best prices, therefore improving competition.
We also asked for the cost of the surcharge to be no more than the cost to the retailer. The ban will be implemented once Article 19 of the Consumer Rights Directive comes into effect at the end of 2012.