Tiger Airways has hit the anger button for anyone who hates bank fees and credit card charges.
They have dropped the $5 ‘convenience fee’ on a new range of ‘raw’ fares for anyone using a Visa or Mastercard debit card issued by an Australian bank or credit union.
These debit cards transfer funds electronically from your account to their account, very closely following the EFTPOS process commonly used in general shopping transactions through bank account access cards.
But why not allow this facility on all fares, not just the one where you don’t have a checked baggage allowance and have only the standard 7 kgs permitted for carry on items?
$5 for a credit card booking for ANY domestic sector is a rip off especially one labelled a ‘convenience’ fee instead of a ’stick ‘em up while we rob you’ fee.
However Tiger looks good compared to Qantas which charges a $7.70 domestic credit card booking fee, and less meritorious than Virgin Blue and Jetstar who charge $3 per segment booked on line using plastic.
Qantas and Jetstar have direct debit facilities with the Bpay process but with a 7 day or 14 days prior to travel cut off period respectively.
What happens in air fare retailing is a microcosm of the issue of banks setting toll gates up across commerce in general, and consistently siphoning cents per dollar out of our pockets at every opportunity.
Most airlines seem addicted to credit and charge card fees. They are locked to the cards because they are integral to the lucrative process of selling their frequent flyers points to people who don’t even necessarily fly with them, via third party sales to the banks to offer as part of their card reward programs, or to department stores and telcos to offer as inducements to buy other goods and services.
It is a process which ultimately frustrates the exercising of choice and creates barriers to competition, while feeding the misleading but popular perception that frequent flyer points offer something ‘for free.’
But if Tiger forces wider use of debit cards as a means of keeping an edge in fare savings, the notion that $1 should really mean 100 cents of value might get a bit of much needed traction in tough times.
3 Comments
I guess Tiger had to think of something to stay within the (new) law about up-front disclosure of total price. So now it IS possible to fly at the advertised price, whereas it wasn’t before.
I betcha most people still book with their credit card (I don’t even own a debit card).
Its easy to feel some sympathy with a small trader who levies an extra % on a thin margin if you won’t pay cash. Some, but not a lot. After all, there is no free cash withdrawal for most people, so you’re trading their card fee for your ATM fee, against your free ATM limits and the costs/risks of carrying wads of dough.
But in an online world, there isn’t a money slot on the laptop to pay by cash. If there IS no alternative, in what sense is this fee actually justified? Wouldn’t it be better for everyone, including the mighty Q to stop this game, and accept some honest pricing?
Odd, that they’ve just been told not to advertize free flights (plus fineprint costs) -if they can be ordered not to be silly there, why not in this case?
I keep wondering when BPAY will stop being the low cost alternative. I’m sure some bank has an itchy trigger finger on that one.
I don’t know why they don’t just directly pass on the % charge that the credit card companies apply. It’d mean people using AMEX weren’t being subsidised by the rest of us anymore.
(Oh, and if your account isn’t giving you unlimited free ATM withdrawals, you need to shop around a bit more!)
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