You’ve paid your fare, tax, surcharge, baggage allowance and booking fee. You’ve risen at an unholy hour to navigate a scrum of fellow passengers and triumphantly squeeze into a garish seat.

After the endless offers of drinks, food and duty-free come the scratchcards. The announcer urges you to dig deep, as for every card sold a percentage is given to charity. A good opportunity to allay that lingering environmental guilt by making a donation?

Perhaps not. An investigation by The Times has revealed a series of cynical practices by no-frills airlines, for whom revenues from additional services such as scratchcards, duty-free, hotels, hire cars and insurance are increasingly important as they try to keep headline ticket prices low.

As little as 1 per cent of the revenue from the 35 million such cards sold on airlines and ferries has gone to good causes, compared with 28 per cent for the National Lottery’s games. Other services, such as the opportunity to book hotels or hire cars through the airlines’ websites, cost up to 100 per cent more than consumers would pay if they booked directly. A spokesperson for easyJet said: “Ancillary revenues are a key aspect of the business models of all low-cost airlines. We make £3.32 profit per seat so obviously our margins are very tight.” EasyJet’s ancillary revenue grew from £61.7 million in 2004 to £131.3 million in 2006.

Ryanair’s rose from £101 million to £176 million in the same period and it eventually hopes to offer free tickets to all, because of the growth in profits from such services. The airline said: “Services we provide such as car hire, hotel booking and travel insurance are among our biggest revenue generators.”

Flight crews often work on commission to sell the scratchcards, which offer a prize pool of 20 per cent of sales revenue. Under EU regulations, the cards count as onboard consumables and therefore are not liable for VAT or duty.

This compares unfavourably with the cards sold by the National Lottery, which offer a prize pot of 50 per cent as well as donating 28 per cent to good causes and paying 12 per cent in tax.

Only 1 per cent of the revenue from easyJet’s £1 cards goes to its nominated charity. One in-flight announcement on easyJet stated that passengers should “dig deep into your pockets as for every card sold a donation is given to the Anthony Nolan Bone Marrow Trust”.

However, an easyJet spokesman said that the flight crew had not followed an approved company script, and that they should have explicitly stated that the charity donation was only 1 per cent. A spokesman for the trust said: “If there are instances of dishonest practice, we need to be made aware and would check that out.”

Cabin crew told The Times that they had no discretion concerning the announcements they made, which were provided for them on cards.

Ryanair and many other low-cost airlines receive their scratchcards from Travelcards Ltd, an independent company which the airlines say is responsible for making a donation on their behalf. A spokesman for the company refused to divulge the donation to its chosen charities, either as a percentage or a total figure, but said that it was at “a six-figure level”.

The airline is also making significant profits from other ancillary services.

Despite boasting of “cheap car hire” on its website, to rent a Ford Ka for 24 hours next month from Hertz is advertised for £37.71 on the Ryanair website, compared with £25.99 for customers who approach the company directly.

Likewise, to book a deluxe room at the Thistle Victoria hotel next month would cost £267.65 through Ryanair, compared with only £130 through the hotel chain’s hotline.

A Ryanair spokesman said: “We think you’ll get a better deal on our website.” But he refused to divulge the cut that the airline takes from its partners Hertz and Expedia.

EasyJet offers a somewhat better deal, although a night for two at the Hilton Olympia in London was offered yesterday for £12 more than the hotel’s own booking line. A spokesman said that the company had a price promise to match any online competitor, but that it was not valid for phone bookings.

He added: “We are providing a service to our customers. It makes their lives easier to be able to book hotels and cars all in one place and in some cases we are able to negotiate favourable bulk deals.”

Pay as you go

£3.32 The profit easyJet makes per passenger before ancillary revenue (drink, duty-free, hotels etc)

£176m The amount Ryanair made in ancillary revenue last year

74% The increase in ancillary revenue Ryanair recorded over the past two years

1% The amount easyJet gives to charity from the sale of in-flight scratchcards

£20m The estimated profit airline and ferry operators have made from scratchcards and phone cards

£137.65 The amount you would save per night if you booked a deluxe room at the Thistle Victoria directly rather than through Ryanair

£11.72 The amount you would save per day if you hired a Ford Ka direct from Hertz rather than through Ryanair

Source: Ryanair, easyJet, Travelcards, Thistle, Hertz

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