Ryanair is reportedly set to earn £1.25bn from extra charges this year - and its latest fee, a £2 delay or cancellation levy, could bring in up to £150 million annually.

The charge is said to go towards compensation it has paid out for delays and cancellations, but its earning potential of £150 million is nearly twice the £88 million it said it paid out as a result of claims following the volcanic ash cloud disruption, as well as the heavy snow and French and Spanish strikes.

Under European Union law, passengers whose flights have been cancelled or delayed are entitled to financial assistance from their airline, including compensation for accommodation.

Ryanair says that claims have been so high that it must make provision for them.

But the long and short of it is: the charge is likely to bring in far more than the bill Ryanair said it was left with after last year's disruptions.

Ryanair already earns up to £450 million a year through online check-in fees, at least £350 million through credit and debit card charges, and at least £320 million through baggage charges.

A spokesman for the airline said this week that the £2 charge would be reduced next year if the number of claims fell. He added, however, that, in the unlikely event of more disruption this year, it could rise.

James Fremantle, spokesman for the Aviation Consumer Advocacy Panel, a passenger watchdog, told the Telegraph: 'Ultimately, this extra charge is just part of the fare.

'It's a way of marketing the fare to make it more attractive to customers.'

He added that it was often difficult to ascertain whether a charge imposed by an airline represented the actual cost of providing a service. For example, Ryanair charges £6 per passenger per flight to process credit or debit card transactions (not including payments made using prepaid MasterCards), so a return trip for a family of four can incur a £48 'administration fee' for a single debit card transaction. EasyJet this week increased its transaction fee to £8 for debit cards, or £12.95 for credit cards.

But the cost of processing a debit card payment is estimated at 20p per transaction.

'There is nothing to stop airlines doing this,' Mr Fremantle said. 'But it makes it more confusing and time-consuming for anyone trying to find the cheapest price.'

Last month, Ryanair began charging £10 each way for reserving specific seats on routes from Dublin to Gatwick and Malaga.


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