Germany bans Ryanair from charging credit card fees

Ryanair has been handed a nasty blow to its business model in Germany when their federal court banned the budget airline from charging credit card fees on flight reservations.

The case was brought against Ryanair by the German consumer protection agency who complained about the fee. Every ticket booked for Ryanair flights comes with an additional fee, varying between $2 and $5, and there is no way to avoid paying it.

Because Ryanair does not offer an alternative payment method, the courts dismissed the Ryanair argument that the bank processing fees are simply being passed on to consumers. In their verdict, the courts said the airline must provide an “established” payment method that does not require any extra effort or cost.

This verdict is just another blow to Ryanair in Europe – recently the airline was hit with a three million Euro fine for not aiding stranded passengers. In the end, if Ryanair does start including credit card fees in their ticket prices, it’ll most likely mean ticket prices will simply go up.

Ironically, the court verdict came at the same time Ryanair boss Michael O’Leary was in Germany to announce a major investment in Frankfurt for a new maintenance facility.

Increasing airline baggage fees displayed in pretty colors and numbers

This chart shows the increase in airline baggage fees during the the last couple of quarters. As you can see, American Airlines and Delta Airlines grew from around 40 million Dollars in Q2 2008 to 118 million Dollars in Q2 of this year. You did read that correctly – they each made 118 million Dollars in just one quarter, just off baggage fees.

The total money generated from baggage fees in 2009 between these 10 carriers is 1.23 billion Dollars. And those numbers are only for the first two quarters. With the current new generation of baggage fees, we are on track to reach about 3 billion Dollars for the entire year.

Baggage fees are here to stay, and when you see that airlines can make 118 million in just a couple of months, you’ll understand why.

(Data based off Department Of Transportation data)