Submitted by Looking Glass
REDjet CEO Ian Burns
Redjet reminds one of a dying man gasping for breath. The CEO, having claimed to have met with Caricom officials, is claiming fictional success and profitability almost everywhere except St Vincent and attributing success to the Prime Minister. He told the Nation (7/20/2011) that your “intervention paved the way for Redjet to fly to Trinidad and Jamaica.” We supposedly own 51% of the airline and have a minister on the board but so far not a word from the PM or anyone there. Is this a case of fiction following fiction? Now we hear that Redjet is seeking to operate a charter service between Florida and Dominica, and six new low fare routes will include Panama and Antigua in three months time. Does Redjet have license to operate out of the USA or anywhere beside Barbados and Guyana? And through it all the normally very critical opposition remains strangely silent
The Advocate (8/9/2011) reported that Redjet received licences to operate scheduled passenger air services to and fromTrinidad,GuyanaandJamaicaand intermediate and beyond points were granted “in accordance with the agreement between the governments ofBarbadosandTrinidadand beyond their respective territories.” The Trinidad Express (8/6/2011) reported the same thing and that St Lucia’s Civil Aviation Minister told the Caribbean Media Corporation (CMC) “the airline was granted entry into their market a couple of months ago and could begin flying in October……We had meetings in Panama with Redjet with the idea of getting Redjet to operate into Panama both out of St Lucia and Barbados.”
The Pride (Toronto) (10/8/2011) noted that “the licences were granted in keeping an ‘open skies’ agreement between Port of Spainand Bridgetownthat allows for mutual recognition of carriers and automatic permission for air services between and beyond their respective territories.” The “open skies” policy is an ‘agreement’ between certain countries to which none of the islands are signatory. That Trinidad whose airline (CAL) doesn’t serviceBarbados has or will facilitate Redjet makes no sense. The PM stated that competition between Redjet and Liat should be seen as good for business and “part and parcel of the right to freedom of movement as enshrined in the Treaty of Chaguaramas” (Advocate 7/6/2011). The Treaty relates to land sold to theUSA ages ago. It has nothing at all to do withBarbados or the islands. That you were told this falsehood by a certain soul inTrinidad evokes more than suspicion.
Liat services Trinidad. The country owns both CAL and Jamaica Airlines which means they service the region. With those airlines we get every dollar the passenger spent for the trip. The same does not hold true for Redjet. That all the governments involved have chosen to remain silent on the CEO’s utterances suggests they all want to see the end of Redjet. If so it is about time to say goodbye. The PM also maintained the presence of Redjet “did not mean any overnight diminution of Liat’s patronage.” And the tourism minister tells us Redjet is the best thing that could happen to Liat (Advocate 6/8/2011). No wonder Liat cancelled flights.
Mr. Burns also told the Antigua Daily Observer that “the Antiguan authorities have granted Redjet permission to begin flights toSt. John. The airline plans to inaugurate a direct Antigua-Guyana route by early October.” He also stressed that “only15 percent of the 149 seats were available at that price (US$9.99), and increases by ten dollar increments with each day closer to the departure date and as demand grows…Ticket purchases are only available online, by credit card over the phone to the airline and through Digital mobile phone airtime sellers…The airline has repeated its policy of cancellation of all bookings not paid for 24 hours before the scheduled departure time.”
Are tickets sold the same way and 15% of the seats available per flight to all the islands? How come we weren’t told? Jet fuel cost rose by 51% in the last year. The chief economist at the airline industry body warned that “soaring oil prices and tax increases mean that passengers will pay much more for tickets by year end” (Telegraph 30/8/2011). Redjet will have to operate at well above break-even per flight for low fares to obtain. Given the state of actual demand and cost, 40% occupancy per flight is at best wishful thinking (Redjet: Cheap Flights and Validity).
Ryanair recently lost a case in the German court over the “handling charges” it imposed on customers booking on line with payment by credit or debit card. It increased the cost of luggage per return trip, charges 20 pounds for each Babe in arms (under 2 years old), more than one pound a cup of coffee, a bottle of water and toilet use which is more that other non-schedule airlines. Those charges along with other ancillary charges account for much of revenue. Can Redjet forego such charges and be profitable? Virgin is about the only non-schedule airline where none of the above apply. It offers a free meal and a drink and operates like a first class schedule airline.
The Caribbean Camera (9/1/2011) reports that demand for its service had prompted the airline to add a new aircraft. “Our low fares and on-time flights have proven to be extremely popular and the airline is expanding our frequency on all of our routes to cope with the demand…. announced the launch of its Trinidad to Guyana service with 4 flights per week starting September 12… and it is still to announce what date Jamaica will be added to the network of routes.” Next the communication executive told the Nation (9/2/2011) the aircraft experienced problems with its hydraulic system.
Now we are told that the hydraulic problems were “exacerbated” by Hurricane Irene, 11 flights were cancelled, 15 delayed and 182 of the 953 persons affected placed on other flights (Advocate9/7/2011). Of all the airlines servicing the region at the time the Redjet plane was the only one to have been seriously damaged by the hurricane. Hydraulic problems attest to the state of the 2 old planes and raises the question of safety. With two planes and a single crew the cancellation and or delay of 26 flights in such a short space of time needs to be verified, so too the destination(s) of those affected. Convenient explanations just do not add up.
Frankly I do not believe the Cabinet was consulted and government approved the airline as was reported. Economics apart that no government except Guyanahas formally or officially granted licence to Redjet suggests, to put it nicely non-interest. Incompetence suggests the airline’s days to be numbered even with the granting of licences. Redjet reflects and undermines Caricom relations, reflects poorly on the Party and is/will be very costly to the country and Family in more ways than one.
Mr. PM you were given the opportunity to correct the 51% ownership falsehood but chose not to. Check with Washingtonand the Irish Times. The latter tells a different story. Recall the question about personal benefits in About Rising Prices and Oil. Are they other private and personal benefits involved? No wonder your reluctance to undertake the forensic study. We can ill afford the luxury of a few souls taking the country further down the drain for personal and private benefits. May be the time is right for such benefits and or related corruption to be told.
According to the Gleaner (12/7/2007) Airone “expected to bring to Jamaica over 300000 new passengers in the first year of operation and grow that number to over 600000 in 2 years …promised fares as low as 80% below current fares offered by airlines flying to Jamaica and other Caribbean destinations…generate 220 skilled jobs in the first year of operation contribute 2.0% to the country GDP and US$65m in taxes to the government. It planned to operate 5 new Boeing 737s in the first 8 months and expand to 8 aircraft in 2 years.” This before Trinidadwent after Jamaica Airline and the recession. Jamaicasaid no thanks. Later he added “a staff complement of 95 is now awaiting the Barbados’ Civil Aviation authority’s green light.”(Gleaner (2/6/2011). Really?
Later the Advocate (8/ 8/ 2011) was told that “Redjet will add 75000 low fare seats into the Caribbeanover the coming 12 months and 400000 of those will touch Barbados.” Imagine 5 Boeing jets are needed to bring 300000 to next door Jamaicain 8 months but only 2 old planes to bring 400.000 from distant places all the way to Barbados. This at a time of deep recession when cruise lines and North American airlines are bypassing Barbados and increasing flights etc to Jamaica, Dominica and elsewhere, St. Lucia getting more airlift and West Jet increasing flights to Mexico by a bundle from 19 Canadian cities. Man comic books make much more sense. He also noted that since Redjet has been in operation “fares dropped by 72% on the routes which it operates….and that Redjet has already made a profit from its Barbados to Guyana route,” which is an insult to fiction The first of three flights to Guyana was full, the other two had less than 30 % occupancy and the return flights less than 15% occupancy. None of the other flights had 50% occupancy either way. Sounds like a case of convenient accounting
And falsehood continues. Now we are told that over 700000 visitors between January and July this year with 59270 arriving last month (Advocate8/11/2011)). And the tourism minister is upbeat about arrivals (Nation8/19/2011). He should explain why so many guest houses/small hotels are up for sale.
A quick recommendation Looking Glass drop the Looking and Gl from your name then everybody will know who you really are
@ looking ass sorry i mean glass
I dont gather anything from your rambling article, it is either above my head or i am slow to comprehend.
The point which the author misses is that Redjet, a low cost airline, is a model which is anticipated to stimulate travel.
In other words based on affordability.
Do I care about this
JUST asking
JUST asking
humm florida and dominica charater ? As dominica airport is too small for most jets even md 82 or ej190. that not going to happen.
What a real waste of time poor collection of rambling thoughts! Read it twice and it still makes no sense!
Stay away from the bottle before you blog
because the article is rambling does not mean that it does not have any merit.
@balance
The follow on from your last comment is to list what you see to be the merits of the submission.
“We supposedly own 51% of the airline and have a minister on the board but so far not a word from the PM or anyone there.”
————————————————————————————–
We being the people of Barbados?
Must admit I read, then read again…and I am not getting the gist of the story except for one thing…this blogger obviously wants to see Red Jet locked up and gone forever. Sad. Perhaps balance should list the merits of the submission as David says, so that those who might like to find out more about what he knows, can get it. Hmmmm. We are (well I am) definitely interested in finding out if there are indeed irregularities happening with this airline…so if anyone can explain, please do so….
@enuff
To gain/benefit from the air treaties in the Caribbean REDjet had to show 51% ownership. Your question is answered flowing from this position.
Not very well presented, I agree, but the gist is that Redjet is operating in a fairy tale land of fiction. The operator is telling Caribbean governments, especially Barbados, what they want to hear, regardless of the facts. It (the article) points out that companies like Ryanair can only offer low fares by charging for everything else involved in the trip, from online booking to using the aircraft toilet. It also ignores that fact that Ryanair operates to remote or poorly-used airports where landing fees are low, but which cost the passenger a great deal of money to get to and from. No such luck with Caribbean airport landing fees, just one of the costs that forces LIAT to keep its fares high. RedJets’s ancient fuel-guzzling aircraft may be cheap to lease, but they cost a fortune to operate and maintain, and when money’s short, I have a shrewd idea as to where it will be saved. That’s why you won’t see me climbing the stairs anytime soon.
REDjet’s position is to let market forces top operate.
Some fear that the outcome will mean the destruction of CAL and LIAT P&L the irony being both are government funded.
Letter received from The Chairman for your information:
Dear REDjetters,
We would like to take this opportunity to first apologize to you, our loyal supporters for the recent flight cancellations and disruptions that resulted from a technical issue with one of our aircraft in August. Secondly, we would like to also apologize for the communication issues that followed which led to information not being cascaded to customers in a timely fashion. We made a commitment during our inception that we would at all times be honest with our customers, boast about the things we did right but also admit where we went wrong—and fix them.
Last week we held press conferences in Barbados, Guyana and Trinidad to personally explain to you the issues we had with recent flight disruptions and cancellations. We knew we had to speak to you directly—we hope that this correspondence and more like it will assist in bridging the communication gap. We have been listening to all of your comments and suggestions and have taken some of them on board.
The issue
We were conducting scheduled maintenance on one of our aircraft in August. Realizing the risk of having only one available aircraft in operation, we applied for permission to wet lease additional aircraft from the US. Unfortunately this process took a lot longer than expected.
While waiting on approval to bring in more aircraft, our second aircraft experienced hydraulic issues. These issues have nothing to do with age of aircraft as the component parts have been replaced many times as part of the maintenance management systems operated by American Airlines and ourselves and recommended by the manufacturers Boeing.
As a result, we had to cancel 13 flights and had 15 disruptions. We have since provided refunds or rebooked all affected passengers.
Changes
We have signed agreements for two additional aircraft. One is due to arrive in December and the other during the first quarter of 2012
We have also entered into a wet-lease agreement with an airline that has five aircraft that are on standby in the United States, whenever we may need them
We plan to overhaul our internal communications to ensure that all of our representatives in the various islands in which we operate have up-to-date and relevant information for our customers
We plan to upgrade our Call Centre facilities to handle the increasing call capacity
Updates
Moving forward REDjet continues on its quest to deliver on its promise to bring low fares to the region. We look forward to the following:
We will be announcing Jamaican routes this week through our Facebook page and website. Very shortly you will be able to see new schedules online and book and purchase your tickets
We will be announcing our Guyana to Antigua, non-stop service on Monday 19th September and you will also be able to view that schedule online, with all our booking and payment channels open to you
We will be announcing the St. Lucia to Barbados route shortly- stay tuned for more information
REDjet remains committed to its objectives to bring low fares to the Caribbean and make travel available to everyone. In less than 3 months REDjet grew the Barbados to Guyana route by 83% year on year which is incredible. Fares have tumbled and people who had never travelled were inspired to do so by low fares and were able to visit friends and relatives they had not seen for a very long time.
We hope to see you on board!
Ian.
I was in Europe in 2009 and could have taken a flight from Berlin to Copenhagen for approximately 40 euros return. And I had choices of airlines. My point is: If all these airlines can fly Europe successfully, why is it that a company like RedJet could not? We the people are the ones who want to have the opportunity of travel, so why for instance do we not have a Caricom Open-Skies Treaty (see below). CAL, LIAT and RedJet could then operate all of the Caribbean quite successfully and none would interfere with the other. If you want comfort you fly CAL, if you want straightforward get-me-there-without-frills you fly RedJet and if you want to jump up and down on the milky way you take LeaveIslandAnyTime. Simple Tings.
Not only the above but think: perhaps these planes could also consider having a special service for the hauling of inter-island foods…just think…we could get all we need in terms of our foods from our Caribbean nations and leave out the processed crap or the pesticidal fruits we nyam down from the U.S. I have seen limes rotting on the earth of Dominica, and oranges in huge mounds on the ground in Jamaica. Pineapples, Otaheite Apples, delicious mangoes of all sizes and shapes, naseberries (amazing fruit), Rose Apples, Star Apples just to name but a few of the delicious fruit we have in the Caribbean. Smoked meats. Delicious cheeses. Great meats (take the Buffalypso outta Trinidad – high in protein, low in fat!)…and and and….basically we can almost totally feed ourselves as I’ve mentioned above.
We the people of the Caribbean have to demand more of Caricom leaders. They meet, eat, drink, discuss and then? Nutting much. Whilst many would say that the above thoughts of a united Caribbean is far-fetched…it is not…but it is impossible with the leadership that we seem to have all over the islands. When you take the islands between North & South America (see my book Culinaria: The Caribbean) and look at them as unified, we have a strong – and a I mean very strong – continent! And that continent could work as a Caribbean Union (believe it was us who planted the seed for a European Union many years ago). Problem is how do you get crabs in a barrel to see unity that could create a decent, happy, productive, interactive, possibly even healthy life for us as Caribbean people. Still keeping our identity as in individual islands but being strong against the rest of the world….and not for them but for us!
Ahhh….what dreams from a silly woman eh?
These excerpts were taken from WikitTravel : http://wikitravel.org/en/Discount_airlines_in_Europe
Europe has a number of low cost airlines, the largest and most established being easyJet [1], RyanAir [2], germanwings [3] and Air Berlin [4]. These airlines have stirred up air travel within Europe by dramatically cutting fares.
The European Open-Skies Treaty of 1992 blew the lid off the system in place before, where national government would restrict access to their airspace to expensive ‘flag-carriers’, such as British Airways [5] or Lufthansa [6]. This enabled airlines to fly anywhere they wished in the European Union without government approval.
Most discount airlines in Europe sell their tickets exclusively over their website or over the phone, and tickets are not available via travel agents. Most are ticketless; you simply turn up at the check-in desk or even just at the departure gate with your passport and confirmation number (and print-out of your e-ticket). A credit or debit card is a very good idea for booking tickets. Most discount airlines sell their tickets as single journeys only.
The pricing structure is complex, with fares fluctuating strongly according to demand, often on an hourly basis, and the same rule “get as much money as a traveler is ready to pay” that was invented by traditional carriers applies. There are no hard and fast rules for obtaining the cheapest fares. In fact, fares can vary from as little as £1 or £2 on special promotions, right up to £500 – such as a London-Geneva return flight, during the February half-term weekend (winter holidays in most of the schools).
The following will however increase your probability of obtaining very inexpensive fares:
• Do fly mid-week
• Do fly early in the morning or late at night
• Do fly in low season (Spring and Autumn)
• Do make use of sales. These sometimes appear 3-5 weeks prior to departure, however this is by no means guaranteed.
• Don’t fly during public holidays.
• Don’t book your ticket less than two weeks in advance
• Opt for return tickets, but keep in mind, in most cases airlines will charge extra fees for changes of date or time.
• Ryanair does not offer connecting tickets, and discourages people from flying with them if they need to connect.[7]
• EasyJet do not offer connecting tickets, and advise passengers who need to connect to calculate a two hour connection time.[8]
• Air Berlin offers connecting flights on their website and codeshares with some members of the oneworld Alliance
• Norwegian generally operate point-to-point and recommend a connection time of 2 hours. If you have calculated two hours but still miss the connection, Norwegian will rebook you to a later flight subject to available space. Connecting flights can sometimes be booked on a single ticket online (“onlining”) for a surcharge of 40 NOK, and in those cases they are responsible for bringing you to your destination.[9]
• Wizzair do not offer connecting flights, and accept no liability for missed connections. Passengers are advised to calculate “sufficient time”.
• German Wings offer connecting flights, and can often check your luggage through to your destination.[10]
• bmibaby do not offer connecting flights, and do not accept responsibility for missed connections.[11]
• Flybe offer connecting tickets, and will try to reaccommodate passengers onto the nearest available flight if a connection is missed.
• Jet2 do not offer connecting flights, and accept no responsibility for missed connections.[12]
• Monarch Airlines do not offer connecting flights, and accept no responsibility for missed connections.[13]
• Smart Wings do not offer connecting flights unless expressly stated otherwise. They recommed a two hour connecting time, but do not guarantee the connection.[14]
• Transavia do not offer connecting flights on their website. Their general conditions of carriage say “If a passenger is prevented from traveling within the period of validity of the ticket because Carrier: … (5) causes the passenger to miss a connection; … the validity of such passenger’s ticket will be extended until Carrier’s first flight on which space is available for that passenger in the class of service for which the fare has been paid.”[15]
• Meridiana do not offer connecting flights on the website; the conditions of carriage do not cover the issue.[16]
• Iceland Express do not offer connecting flights per se, though they have a service which sets up connecting routes. The contract of carriage accepts no responsibility for missed connections.[17]
Unity in air travel and food security? Food for thought. (if nothing else!).
This whole article is written based on false or concocted premises, but one point which this and many people attack is the recent REDjet shutdown due to maintenance. The fact is that of the two aircraft in service, one was down for scheduled maintenance, and the other developed a “snag”. Both of these are NORMAL in airline operations, what is not normal is not to have a backup immediately available.
REDjet is a new Low Cost carrier. the emphasis is on LOW COST. The idea is NOT to spend any more money than you have to – spare aircraft cost money, therefore they were not purchased. The airline’s ownership are sorting their way through a new venture, and erratic and irresponsible behaviour by Trinidad and Jamaica are not helping.
Nor is the Barbados Aviation Department, whose continuation in Category 2 status – or not being promoted to Category 1 – means that REDjet does not have access to US destinations. This is not REDjet’s fault, and they are doing the best they can with the cards they have been dealt.
Do you want reliability? Somebody has to pay the higher price for that luxury. We have become accustomed to taking a plane just like if we were taking a bus… but it’s really a different world – you can’t pull over and park an airplane if the engine stops working, and it is the most highly regulated and inspected form of transportation in the entire world – again, more expense.
Perhaps being denied access to the USA initially is a good thing for the eastern Caribbean… REDjet made fares lower for all of us before they had made their first flight, and instead of expecting perfection from day one I think we should be making allowances for a brand new start-up which is looking to make all of our regional – and later international – travel cheaper and give us the kinds of choices (and Lord knows that regionally we need choices) that only the developed countries now enjoy.
With low fares comes an increase in travel numbers. When that happens, you will see more income for the carrier and that translates into more aircraft, more routes, and more travellers – a volume which, hopefully, will also mean even lower fares.
So chill out… what will is, will is.
@Anomynuss…you are so right!
@ Looking Glass
I don’t get the point exactly. That notwithstanding, the simple facts are that REDjet’s days are numbers regardless of whichever starndard you apply. I fully expect to see Santa this Christmas but unlike Santa, REDjet won’t be coming.
Is there any truth that REDjet asked the Barbados government for an cash injection to keep it in the skies? If yes, how much money, does BDS$6.0 million sound about rights and or familiar?
Hmmm……..connecting down to South American, does REDjet have a cargo division? If yes, will the bulk of cargo go from the Caribbean to South America or South American to the USA via the Caribbean?
Everyone forgets when CAL had a New Charter in Sept 2007 vowing less lost luggage and more on time flights then by November they effed up 4 flights in one day. Looking Glass has been handled well by other BU readers but I will add another – how much shares do you have in CAL? Do you know Anastasia Beaverhausen?
I would rather a delayed or cancelled flight than a new-brand jet snapping in three!
@Rosemary, shame on you, didn’t you know you MUST be perfect every second? When you lapse for one instant? CRUCIFY THEM… SMDH
I thought i was the only stupid person on this site, but thank good other persons found the article to be an exercise in futily, except for Enuff who sees every thing from a micrscopic politcal perspective. I am a bit disappointed in balance, but then again this must have been his off day not to reason.
Market forces will determine if Redjet succeds or fail, just like the electorate will decide when it is time for a change.
@David
I know you dont want to stiffle democracy, but I believe that the article as presented should not have been allowed, had i been the blogmaster, i would have asked the author to have clarity of thought, but then again, i am not the blogmaster.
Normally, i enjoy reading some of the articles, but when i finished reading one paragraah and moved on to another, i forgot what i had read, and by the way i am not losing my memory yet.
We must all continue to support RedJet. As a Barbadian living in Jamaica I am dissatisfied that I have to accept Caribbean Airlines’ monopoly as I travel back and forth. Only competition and consumer choice will result in improved service.
@Jeffrey
I am in sync with you.
I pry to God that Redjet model works. Airfare in the caribbean is to flipping high.
@spend to qualify…If I was RedJet I would have to try and find out who you were and put you in the hands of the law for uttering such low accusations…well at least that is how I felt when I read your comments. Maybe you were just talking tongue-in-cheek…who knows. I do not believe someone with your intelligence would want to imply anything quite so….hmmm…off the wall.
As I have said before so many raas times over the years about us Caribbean people…anyone come up with something that is good and different and perhaps will help the people of the countries ’bout hey and the first thing is to immediately try and lambaste them dong to below the ground.
Perhaps the real problem here is that some people do not like the idea of an Irish man coming here and thinking up of an idea that no islander had? Geez. Who cares? The airline has local investment and will hire local. And guess what it will do you bunch of negative idiots…it will take locals all over the Caribbean to spend their money there instead of in the raas US. All ya real got me today…’cause I real seeing Red now!
BELIEVE IT OR NOT. The airline RedJet is badly required for those of us who wish to vacation or do business (yes legal business that could help all of within Caricom – and eff you ent know the basics of what Caricom ‘supposed’ to do for you Mr. Spend and Qualify – well it is supposed to be Caribbean unity! Lawd what a raas word eh? Unity!). And I say ‘supposed to do’ liberally ’cause I wish someone would tekk over all we islands like one huge benevolent dictator and organize the lot of us to be one UNIFIED CONTINENT! ‘Cause it sure ent happening with supposedly intelligent people that we supposedly supposed to have ’bout hey! Truly not!
@ Looking Glass… so what if RedJet found itself in economic woes (I do not know how you know dat unless you is one of their Financial Controllers) what do you expect after a complete turn around by governments in our islands who promise and then whoever put pressure ‘pun dem (I ent saying how) turn around and negate. CAL puts pressure and dem all buckle. De only one stood up for RedJet was the Barbados government and Guyana (bless their hearts) and if I can say one thing about dat is GOOD FOR ‘EM. I wish this government had enough money to give RedJet ALL DE MONEY they require TO BUY 100 JETS FOR ALL I CARE – at least it would be a good investment compared to some of the other crap I have seen them invest in (like a million dollars to put up plastic effigies made in foreign at Pelican Village for instance!) because it would be stuped and most ignorant not to see what RedJet could bring to our islands and their futures. Lawd have is mercy gee me a break, BREAK BREAK.
@ Ian…I am not hear to put CAL dong…I want them in the air as much as I want RedJet and LIAT because that gives us choices. I would just like people to be a little more in tune befo’ dem open their mouths with such undiluted crap as what I have seen on this blog bar one or two intelligent and progressive comments.
@David…the one who started this blog may not have been the most understandable in terms of his usage of the English language…but he certainly got some of us real worked up and when we get worked up, some good might come of it all because we know you have readers on here from all walks of life. Bless.
To finish…we should all want to ensure RedJet’s longevity. You could only be a real poppet if you want to see it fail. Lawd come for your world, I keep begging, and begging…maybe I should just aks you to come fuh de Caribbean ’cause we really, really ent know one backside of what we do, Lawd…not one backside.
This courtesy of the Guardian Online today. There’s no such thing as a free lunch, and there’s no such thing as a cheap airline ticket.
“Passengers flying with Ryanair will have to use the airline’s own Mastercard to avoid paying booking fees from early October.
The airline currently charges anyone paying with a debit, credit or Visa Electron card an “admin fee” of £6 per one-way flight that can only be avoided by using a Mastercard prepaid debit card.
But the airline has announced it is launching its own prepaid Mastercard, the Ryanair Cash Passport, on 4 October and only passengers using that card will avoid the £6 fee. From 1 November, anyone using another brand of prepaid Mastercard will also be charged the £6.
Unlike a standard debit card, a prepaid card has to be loaded with money in advance before being used to pay for things and is estimated to be held by only 5% of the population. In the past, Ryanair passengers had been able to get around the charge by using Visa Electron. However, in January last year the airline introduced a £5-a-leg fee (which has since increased) to Electron users.
Responding to the launch of the Ryanair Cash Passport, Martin Lewis, of website MoneySavingExpert.com, said: “This is anti-competitive, it’s an insult to loyal passengers who first got Electron cards so they could pay for free, then were forced to switch to prepaid Mastercards and are now being asked to dance again this time by getting Ryanair’s own prepaid card.”
The move by the airline is a bold one. A week ago the Office of Fair Trading launched a formal investigation into “a number of airlines” over their surcharges for using debit and credit cards. This follows findings issued by the watchdog at the end of June, when it proposed that charges for paying by debit card should be banned, and pointed out that a simple amendment to existing payment rervices regulations by the Treasury would achieve this.
This followed a super complaint from Which?, lodged with the OFT in March, to try to stamp out the practice. Which? claimed that the actual cost to the retailer for processing card transactions was no more than 20p for debit cards and no more than 2% on credit cards.
Last week, Which? released research showing that consumers are still paying an estimated £265,000 a day in debit card surcharges for booking plane tickets, despite the OFT’s recommendations.
“Quite simply, Ryanair must be forced to include the booking fee in its headline price – this is not a voluntary fee – it’s part of core pricing,” said Lewis.
A spokesman for Ryanair denied that the launch of the card was a snub to the OFT and said it had “been in the pipeline for some time”.
He said: “We have suffered from criticism for some time that customers do not know where to get prepaid Mastercards. So we decided that to make it easier for customers they could start getting them from our website.”
He denied the airline charged debit or credit card fees but instead said Ryanair charged an “admin fee” that went towards the upkeep of the company’s websites.
The OFT said it could not comment on individual airline’s pricing structures but did say that its investigation is looking at “any additional charge that fluctuates depending on how you [an airline customer] choose to make the payment.”
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@ peltdownman— there are certainly many examples of airline misjudgements for RedJet to study, take heed of, and avoid. The fact remains that we consumers should have a choice, and if there was some way in which LIAT could offer a wider service to include the Northern Caribbean I would certainly welcome them as well. Choice has many components including but not limited to price, comfort, reliability, civility of staff and schedule.
@Peltdown…I personally (can only speak for myself) do not expect a free ticket or want a far-too-cheap-ticket for comfort…What I want as a consumer is choices….right now I have none, if I want to go to Jamaica I have to travel by CAL and whatever rate they decide to put on a ticket. I want the competition because it has already proven to be exactly what we required – prices dropped almost immediately. If there was only one bread shop in Barbados and they were charging me 20 dollars for a loaf, I would not buy it. I would be forced to either do without bread or make my own. Even that is a choice. But I cannot fly like a bird and need an airline. RedJet is trying to allow ALL of us to have choices. Simple ting. And after a good roti compliments of Indian Grill on Bay Street whose prices remain decent, I feel a lot bettah! It would be nice, however, to be able to nip over to Trinidad for a good plate of crab and callaloo. Life can be as simple as food and still be delicious.
@ David
Thanks
@Obediant
I asked a question and got an answer from David.
@peltdown woman
Any comsumer having common sense would check the price of an airline ticket before deciding which airline to fly on. I just dont care what it charges as long as all the charges are known to me before i decide.
Secondly, i dont beleive that people should use a credit card unless they have the money to pay for the transaction, including booking an airline ticket. The interest on credit card is almost 30%. Why are the low budget airlines still in operation?
Because their service is cheper than the traditional airlines, else they would have been driven out of the market on entry. Virgin Alantic started out as a chep carrier and it survided. Market forces will determine if low cost carriers remain in the market, Consumers will determine which cost they want to incur. On my way to the states on aa i wanted something to much on and enquired how much a sandwich cost and was told $10 and i refused to buy one. Comsumers have choices.
@Rosemary
i never see u so riled before and i can empathise with you, I wish i used to used expletives in my writing because i would have sent them like a ballistic missile at that article.
@Enuff
I am happy that you have been tamed.
@Peltdown woman et al
Ah doan know bout wunna I like scotching pon a fishing boat (wid muh inner tube round muh neck) tah St, Vincent, and probably tah Tabago eff dem want to fish illegally. Dem got more dan one way to skin a flying fish yuh know.
David there is a serious problem world wide with the internet. It is not a LIME problem. Adobe keeps crashing and there is no solution at the moment. My comment will go to your moderation page becaus I can’t get on your blog with Firefox, so I am using Chrome.
@Islandgal
Will report it to WordPress to see where it leads, thanks.
@Rosemary & Obedient (means “always doing as you’re told”)
You talk of competition but this article points out that Ryanair’s tactics are anti-competitive, because it is forcing people to use its own cash card to avoid booking charges that should be part of the fare. These charges cannot be avoided – they are NOT part of the consumer’s choice, and should therefore form part of the core airfare. That is accoring to the Office of Fair Trading in the UK. Of course, you may know better. Furthermore, by using their cash card the consumer is giving them money upfront to use as they like until the consumer wants to buy a ticket. Please let me quote again:
“Responding to the launch of the Ryanair Cash Passport, Martin Lewis, of website MoneySavingExpert.com, said: “This is anti-competitive, it’s an insult to loyal passengers who first got Electron cards so they could pay for free, then were forced to switch to prepaid Mastercards and are now being asked to dance again this time by getting Ryanair’s own prepaid card.”
As for cheap, Ryanair operates from Stanstead Airport, which is miles from anywhere significant and cost a fortune to get to and from. People do not factor this kind of cost into their overall travel costs, and then Ryanair treats them like crap.
@Obediant
Sometimes we learn from the comment exchanges. Don’t only focus on the Looking Glass piece.
@BU.David: “Don’t only focus on the Looking Glass piece.
But you facilitated and published the Looking Glass piece.
What should we think of that?
@Chris
Is it not obvious?
We are all learning together* including Looking Glass who has submitted several articles.
@BU.David: “Is it not obvious?
Of course it is.
At least to the sophisticated.
@BU.David: We are all learning together* including Looking Glass who has submitted several articles.
And TMB et al…
An honest question here David…
Are you fighting for Barbados?
Or are you trying to disrupt?
@Chris
Both
@David
I deeply respect that answer.
Well it appears that RedJet will be soon saying hello to Jamaica and goodbye on its return to Barbados. On CBC news this evening!
@Rosemary……… please fill us in !
@Rosemary
Please elborate as i am over in away.
@peltdown woman
are you a member of shopsmart or the other buying club in barbados?
@David
I appreciate what you have said..
rosemary, even though i might differ with you slightly, i enjoyed your comprehensive perspective on redjet because i sense in your rational argument a genuine desire to reason and be as factual as possible.you did not see to be dismissive of other people’s comments but shared your views for the benefit of us all. keep up the good work. i wish redjet well.
david- your comments 9/13 informs that redjet is a low cost airline whose model is designed to stimulate travel based on affordabilty. just clarification;do you mean “affordabilty’ or ‘competition’
@balance
Affordability meaning with the low price point which REDjet offers people who would not have been able to afford to travel now can.
Just picked up from RedJet’s website:
REDjet – The Caribbean’s Low Fares Airline has announced that it will commence the operation of three new Low Fares routes in November with ticket sales starting shortly. The Low Fare routes are Trinidad to Jamaica (Kingston), Barbados to Jamaica (Kingston) and Antigua to Guyana. These will be REDjet’s 4th, 5th and 6th routes as the Low Fares Airline continues to roll out its services across the region and will make the Low Fares Airline’s entry into two new markets in Antigua and Jamaica. REDjet will announce the date of the commencement of ticket sales and flights later this week. For the latest updates consumers can follow REDjet on Facebook.
The rollout of these new routes has been made possible by the huge success of REDjet’s first three routes between Trinidad and Guyana, Barbados and Guyana, and Trinidad to Barbados. REDjet will soon be announcing the name of its third aircraft as part of its expansion.
@obedient
I don’t get the “Peltdown Woman” thing, unless it makes you feel that you are better able to dominate a discussion by arguing with a woman. Its a Bajan thing, I know. Bless!
I am a member of one of the shopping clubs, though what that has to do with the argument has yet to be established. If you are implying that I am taking advantage of cheaper prices, that depends, because many of the prices are not cheaper. In food much of the quality is better, and some things are obtainable there that are not found in supermarkets. Would never buy an appliance there, as there are few warranty options, and the origin of the appliances is not known (though the same could be said about the appliances for other leading stores).
Regarding the real issue, that of REDjet, low cost carriers survive in Europe because of the size of the market. I do not see the same applying in the Caribbean. The market is very small here and no matter the cost, there will be few frequent flyers. As I have said before, cheap-leasing a fuel guzzler in times of rising oil prices is an exercise in futility. When the excitement wears off, I doubt REDjet will survive. In the meantime it is the predator which only wants the high traffic routes thereby causing long term damage to the only comprehensive carrier in the region, LIAT.
Thanks Rosemary, the more routes the more scale and the profit margin becomes more robust. Have to give the Burns people marks for tenacity in the face of many obstacles tossed in their path. Hopefully Redjet’s success will force the formulation of a sensible Air Transportation policy in the region which is one of the planks to bring the region together.
@peltdownwoman
when i submit a blog in response to one, gender does not enter my thoughts so disabuse your self from that thaough about being a woman.
I deliberate asked you about being a member of a buying club to get you to come to realisation that redjet is not doing anything different from buying clubs. Here in America if you are not a member of one of the buying club you pay more for the commodity, so if you want to use the service you comply or do your business elsewhere and that is why we have choices, and that is why i support more choices in the travelling industry. WE have been exploited by the regional carriers for too long.
I wish redjet every success, and you and i will disagree, but i wont direspect you unless you do so, which would give me the right to respond accrodingly.
Have a nice day and continue puting your perspective as i continue to put mine.
@Rosemary
Thanks
@peltdownman
sorry i dont know why i continue to make such an error, sorry for the oversight. Then again i am not good at spelling.
Remember when CaribExpress was in its final days the then PM took out the GOB cheque book and wrote a cheque to them and they still went out of business.
Block-a-rama;
Remind me about carib express. I can’t find anything on it on Google. When was it operating? When did it fold up? How many planes did it have? Was it low cost? Who did it compete with?
Oh, hear we go with these band wagonist….If Redjet were to fail, we are the same ones who will end up paying US$400 for a flight under one hour..So, get a grip on reality….
Id like to ask one question….
how much did CAL pay you to write this??
It’s a pity you don’t have a donate button! I’d certainly donate to this outstanding blog! I guess for now i’ll settle for bookmarking and adding your RSS feed to my Google account. I look forward to fresh updates and will talk about this blog with my Facebook group. Talk soon! technology marketing
truth is stranger than fiction.!