I’m on my way back to Kraków from a two-week trip to the Netherlands. I’m flying there with Ryanair, the well-known Irish discount airline. Over the years I’ve taken many flights with the company, and have developed a love-hate relationship with them. On the one hand their fares are unbeatable (if you book early), and they fly some very convenient routes. On the other hand their cramped airplanes, the cattle-like treatment you get, and the hefty penalty fees for all sorts of trifles make every journey with them an ordeal.
Ryanair’s currency conversion policy
When I booked my current flight some months ago, I noticed something new. Ryanair now quotes its fares in the currency of your country of departure, regardless of whether this suits you or not. Then it ‘conveniently’ offers you the option to exchange that fare into your own home currency… at a hefty markup of around 7 percent. If you generally book return flights from your home country, you probably won’t have noticed this. But if you travel around Europe a lot, this is sure to raise your cost of travel by quite a bit.
As I belong to the latter group, I’m far from happy with this policy. It’s bad enough that Ryanair forces you to buy tickets in a foreign currency, despite being Irish and using the euro for its own accounting. But I much rather let my bank do the currency conversion than accept the extortionary rates of ‘the low fares airline’.
Ryanair is not alone in offering a ‘convenient currency exchange service’ at ridiculous rates. I’ve noticed this ‘exchange sharking’ practice at ATMs around the world, at some online stores, and since a few months even on freelance platform oDesk (shortly thereafter rebranded as ‘Uwork’). But here’s the catch: all those services are opt-in. The payment screen allows you to choose whether to pay in the local currency or in your own, at a clearly displayed exchange rate.
Not so with Ryanair. When I made my booking there was no option anywhere in the booking process to opt-out of their automatic currency exchange. Only after I had paid, the exchange rate that had been applied to my card was shown… and it was nowhere near reasonable. To ensure that I hadn’t simply overlooked the currency conversion option on one of the screens, I scrutinized each step of the process extra carefully when I booked another ticket for my girlfriend. With the same result: Ryanair shoots first and asks questions later. Or rather, not at all.
Customer service denies any wrongdoing
Most people probably wouldn’t have noticed what had happened. Or if they did, they would just grumble and get on with their business. Very few would actually contact Ryanair about the issue, not in the last place because of their horrendous customer service that can only be reached through a buggy web form. But I’m not most people, and I like to make a point if I feel it needs making.
So I politely wrote to their customer service department, only to be told that the currency conversion was my own fault, and that I should have opted out by ticking a check box somewhere in the booking process. Yeah right! Fortunately I have the paranoid habit of taking screenshots of online transactions, and I could demonstrate that there had been no check box anywhere on the web form.
Next the customer service asked me to obtain proof from my bank of the amount that had been charged to my card. There was absolutely no need for this, since they could see in their own accounting system how much they had taken from me. But they seemed happy to throw up an extra barrier to dissuade me from pursuing my stolen money. I wondered how many people would just give up at this point.
But once I’m resolved to do something, I will see it through, so I decided to keep pressing the issue. I took a screenshot from my online banking history and sent it to Ryanair’s customer service (again through the cumbersome web form, as their email address is ‘unmonitored’). I also politely advised them that I’m an online marketer, and that I would happily take the opportunity to give them some extra publicity over the case–a trick that has worked wonders before.
I don’t know if it was the promise of bad publicity, or simply them having run out of options to tell me off, but I finally got a letter stating that they would refund the stolen money… or not quite. The customer service rep dryly announced that they would refund EUR. 11.94, whereas the money unduly taken for currency conversion had been EUR. 14.55. How they came up with this amount is anyone’s guess. It almost felt like they were trying to see just how far they could push their luck.
So altogether it had taken me a couple of hours of work to reclaim less than 12 euros that Ryanair had stolen from me. That time would have been more profitably spent elsewhere, and I imagine the same goes for most people. And that is exactly what Ryanair is counting on: that most people won’t jump through all the hoops to reclaim a tiny amount of money.
Total damage runs within the millions of euros
But tiny amounts add up. Imagine that out of a hundred Ryanair passengers only one* books a flight from another country than their domicile (or using a credit card in another currency than that of the country of departure). That’s 817,000 passengers**, booking flights worth on average EUR. 46.40**. These passengers are overcharged by about EUR. 3.25 each***, adding up to a total of EUR. 2.65 mln. Due to Ryanair’s cumbersome customer service channel and its stonewalling policy, I imagine that no more than one out of ten* passengers manages to fully reclaim the money taken from them. That results in an extra 2.39 million euros in profits for the company, directly stolen from its customers. To put this in perspective: that is 132 annual salaries (after tax) that Ryanair pays its cabin crew (source: Become-Cabincrew.com).
With the current state of affairs it doesn’t look like anything will stop Ryanair from stealing from its passengers. The effort required from each individual customer is far too large compared to the amounts stolen. (Compare this to a bank siphoning off tiny amounts of money from each of its customers’ transactions: a popular plot theme in crime movies from the early years of the internet.) The oversight on airlines in Europe is highly fragmented, with national oversight bodies only dealing with complaints regarding flights taken from their country, while companies like Ryanair operate on an international scale. Moreover, airline regulation remains highly focussed on safety, whereas financial integrity is hardly a popular theme.
The only thing you can do is warn your fellow-travellers, and not take no for an answer when trying to reclaim money Ryanair has unduly taken from your credit card. And we may hope that competition in the low-cost airline segment by companies like Wizz Air and EasyJet will eventually push Ryanair to adopt more responsible business practices.
* These numbers are complete guesses on my part, but fairly conservative ones at that. I invite anyone to provide me with more reliable data on this.
** These numbers are taken from Ryanair’s annual report 2014.
*** Assuming Ryanair overcharges each passenger by the same percentage it did to me.