Which Budget Airline Charges The Lowest Fees?
Despite many differing opinions about it, budget airlines are one of the go-to methods of traveling for many who wish to do so on a budget. Budget airlines have already carried 984 million passengers in 2015, which was 28% of the world total scheduled passengers. It becomes even more affordable when there are special sales around! But there’s only one issue that makes many hesitant to fall for these low prices.
The hidden fees.
While many can work around those fees with smart planning, there are still some fees you can’t avoid easily. And the one fee you can’t escape no matter how careful you plan your budget trip is the processing fee.
What’s processing fee?
Processing fees are what you pay to be able to, well, pay. The fees are charged so that customers are provided with a secure and comfortable mode of payment. It’s also used to maintain online payment systems as well as upgrade, enhance and improve the security features for all payments made online. This is inclusive of all types of payment such as debit card, charge cards, direct debits and especially credit cards.
Credit cards have one of the highest processing fees due to the level of security needed, and the amount can increase due to a specific term and condition which will be explored on soon. This is a shame as using your credit card to make payments comes with a lot of benefits, such as getting rewards points and cashback. But using them will mean getting charged a higher processing fee compared to other forms of payment. So the question is: Is it worth the price?
Processing fee comparisons
Not all budget airlines display how much is charged for the processing fee, as it’s often all-inclusive with the cost of the ticket. But there are those that do display their processing fee, and you will need to keep an eye out for it as it is only showed when you’re about to key in your credit card details or after.
But to give you a standard idea, let’s see how much they charge for their processing fees, particularly for credit card payments online.
AirAsia’s processing fee ranges, depending on your location. But before you go on thinking that AirAsia has an affordable processing fee compared to Scoot (who merged with Tiger Airways on July 25, 2017) or Jetstar Asia, it’s important to consider that these airlines have another condition in relation to these prices: customers are charged per customer per flight.
Not sure how that works? Here’s an example.
Say that you’re a family of four (two adults and two children) travelling to Phuket at the end of this year for the school holidays. You’re looking into the first week of December 2017, and as you book you opt for meals, check-in baggage, seat selection and insurance (if available). You want to use your credit card as a mode of payment as you’re hoping to get extra rewards points.
Based on the above situation, here’s how much your processing fee will look like for the three airlines above.
Pretty high from the fares shown above, isn’t it? There’s a reason for this. As Scoot and Jetstar Asia is based in Singapore, their cheapest flights requires you to stop over at Singapore, which makes the flight not only a lot longer, it would also be more expensive. You would also have to change planes once you arrive in Singapore, which makes the number of planes you would have been on four for the overall trip with Jetstar and Scoot.
As mentioned above, customers are charged per customer per flight for their processing fee when using their credit cards. The processing fee for Scoot when making a payment is RM16, but because there are four of you, and you will need to take two different planes to and from Phuket, you will be charged twice. So that’s RM64 for all of you times two, coming to the total of RM128.
The same thing happens with Jetstar Asia, where the initial processing fee of RM35 is now RM280 due to the same reasons above. AirAsia’s processing fee is RM8 for a trip to Thailand, and as there are four of you and it’s a direct flight to and from, it’s not as high as the others. But you can see how a simple processing fee of RM8 can quickly add up for a return flight.
The cheapest processing fee you can find on AirAsia is when you pay direct debit. You’re only charged RM4 for the entire payment process, rather than per passenger per flight. But doing that will mean losing out on the benefits when paying with your credit card.
Price comparisons of airlines without processing fee
So, does the processing fees still make a significant difference between budget airlines and other airlines?
Both Malindo Air and Firefly fares are simple and already has check-in baggage as part of the fare. But even so, their fares are still significantly higher than AirAsia even when they do not have a processing fee. While both airlines claim that they do not charge processing fees (under selected terms and conditions), there are other fees to look out for.
With Firefly, there’s the Advance Passenger Processing Fee that costs RM4.80 per person per flight specifically for Phuket. Malindo also has such a fee for RM5 as well as a service charge of RM17.50 per person per flight, all of which are charged under the base fare. These fees are unrelated to your credit card use and cannot be avoided though.
In the end a processing fee does raise the cost of flights at budget airlines, but what matters the most is the base fare and the add-ons you are looking into getting that will affect the cost significantly. But these add-ons can be opted out, and fares can always be cheaper during the sale. Processing fees? Not quite easy to opt out if they’re being charged.
Are there any other fees to look out for?
If you’re using your credit card to make the payment, there is a possibility of being charged a cross-border transaction fee. Cross-border transactions are when the country of the cardholder’s bank differs from that of the merchant. These fees are subject to your bank, so it will differ and they won’t show on your flight itinerary and instead appear on your credit card statements, making it a hidden cost that you won’t see until you check your credit card statement.
As long as the budget airline is using the same system that links to your local bank, this shouldn’t be an issue. But those using overseas credit cards, do take note!
If you already made a booking with your credit card and want to select more add-ons after you’ve made your payment, don’t worry! You won’t be charged an extra processing fee after you made your payment for any add-ons such upgrading your seat or even buying more meals.
How to avoid the processing fee
While your options for the processing fee are mainly to opt for a different payment with a lower fee, particularly direct debit, it is possible to avoid the processing fee using the right credit card. For AirAsia, you will need to pay with the AirAsia BIG Visa card to avoid the processing fee, and the card comes with plenty of other rewards as well when you use it. For Jetstar, only Australian residents holding a Jetstar MasterCard or Jetstar Platinum MasterCard can avoid paying the processing fee.
There’s also the fact that flights to and from the United States of America with AirAsia do not get charged a processing fee. Other than that, you will have to deal with the processing fee in one way or another.
Consider your options
When it comes to budget airlines, it’s always possible to make the best out of their offers and gain the best saving you can get with the right choices. You can always look for cheaper insurance options, let the airline select a seat for you instead for free, or even opt out of meals for short flights.
But there are certain fees, such as taxes, security charges and especially processing fees that cannot be avoided unless you have the right tools. While processing fees can add up quickly for credit card users, it’s still important to consider the benefits that come with using your credit card, not just in terms of rewards points but some do come with travel insurance that can only be used if you book your flight with your credit card.
So consider your options to see which one is worth it, and be aware of these extra fees from budget airlines to make sure you’re getting the best out of your budget flight. Happy traveling!