Need I say Moores

Is European aviation broken?

When parking costs more than your flight, it’s clear something is fundamentally wrong with the European airline business model.

Over the last few weeks, I’ve made a few flight bookings. London Gatwick to Geneva with easyJet cost me £58 ($71). London to New York with Norwegian came in at just £434.

And yet my onward flight in the US from New York to Atlanta came in at £240 – more than triple the price of my London-Geneva flight.

To be clear, London-Geneva is 611 miles and New York-Atlanta is 865 miles. That’s only 29% further and 313% more expensive.

I accept that this is a random, unrepresentative sample, with hundreds of potential revenue management variables and drivers at play, but these are the kind of fares we are regularly seeing in Europe. 

With European airlines still pumping overcapacity into the market because of low fuel prices, it’s a buyers’ market and the low fares are absolutely staggering. 

Several European airline executives have told me that they don’t expect rising fuel costs to have a knock-on impact on capacity until next winter – and even then low-cost carriers like Ryanair and Wizz are planning to keep fares down to put further competitive pressure on their rivals.

Compare this with the consolidated US market - and their three times higher fares - and its clear to see why our transatlantic cousins are leading the airline world in terms of profitability.

But the bit that I find most shocking is that my recent car parking at Heathrow for five days in the regular long-stay car park (no valet service or frills) cost me £113.70 – nearly double the cost of my London-Geneva flight.

During a recent conference, International Airlines Group (IAG) CEO Willie Walsh, while speaking about Heathrow expansion, estimated that an airport car parking space costs about £10,000-17,000 to construct.

If you compare this with the huge overheads of running an airline, it’s astounding that the hire of a low-tech parking space costs more than flying a multi-million pound asset through the sky. Something is very wrong here.

Victoria Moores victoria.moores@penton.com

Please or Register to post comments.

What's Need I say Moores?

Need I say Moores

Blog Archive