Category Archives: Aviation Economics

When flights to hub airports are still cheaper if you go indirect

Posted on by
Reply

If you want to reach many destinations from regional airports like Birmingham, Manchester or Glasgow, you would expect to take a connecting flight through a major European hub airport.

But what about when you want flights to that hub itself? You would have thought that there would be enough capacity on the route for it to be cheaper to go direct with the airline which operates that hub facility. As it happens, the opposite is often the case, even when flights via that hub are cheaper than direct flights to the other hub.

Looking at flights to 10 hub airports served by direct and connecting flights from Birmingham, we found the following:

Hub airport
Airline
Direct £
Indirect £
Premium%
Airline
Via
Brussels Brussels Airlines 255 200 28 KLM AMS
Copenhagen SAS 208 151 57 KLM-AF AMS / CDG
Dubai Emirates 470 339 131 Swiss ZRH
Frankfurt Lufthansa 396 151 245 KLM AMS
Istanbul Turkish 183 161 22 KLM AMS
Munich Lufthansa 193 151 42 KLM AMS
New York Continental* 437 369 68 KLM-DL AMS
Zurich Swiss 193 161 32 KLM-AF AMS / CDG

Flight prices were searched using Expedia.co.uk for a 1 week trip (therefore including a Saturday night stay and often being cheaper), between 1st and 8th December. Only flights to Paris and Amsterdam were cheaper direct – hardly surprising considering how close they are, but Brussels still worked out more expensive to go direct.

Now these dates might be quite soon, but they are still before the mid-December Christmas rush. Looking forward to March next year, prices for direct flights to Brussels, Frankfurt, Munich and Zurich fell below the prices for flight connections.

This shows that the network carriers are still charging hefty premiums for direct flights. This seems to fly in the face of environmental concerns over short haul flights being the most polluting – and two short haul flights when one will often do being particularly bad for the environment.

The low cost airlines have shown that point to point routes are what the customers want, and that they shouldn’t need to pay for the privilege. Most low cost airlines actively shun transfer passengers, as if one flight is late, they don’t want to deal with missed connections, and their smallprint makes it clear that they are your problem, not theirs.

Yet, of the routes featured, none have a low cost alternative from Birmingham. At a push, you could fly to Paris with Flybe, and then take Thalys to Brussels, or if your dates were flexible, you could find a cheap flight to Geneva and then train it to Zurich.

So will the legacy airlines ever wake up to the idea that direct flights should be cheaper for them to operate, better for the environment, and therefore cheaper for the consumer? Not without a heft taxation penalty against them, and UK Air Passenger Duty is onerous enough as it is. In the meantime, they will continue to charge more for the convenience of a direct service, especially if there isn’t a realistic low cost alternative.

Notes:

  • *Continental dates were 2nd-9th December. No direct Continental flights found in March 2012.
  • AF = Air France, DL = Delta
  • AMS = Amsterdam, CDG = Paris CDG, ZRH = Zurich

The shocking lack of European capitals served by flights from Birmingham

Posted on by
4

As I see that the Birmingham Airport twitter feed has many comments about the runway extension and the High Speed 2 railway proposals, I thought it was worth a quick reminder of just how many major European capital cities are not served by flights from Birmingham Airport.

Now I’m not just talking about Vaduz or Andorra-la-Vella, which don’t even have airports, these are major European capital cities, including the capital of the largest country in the EU (Germany), aswell as other major players such as the Spanish capital Madrid and the Polish capital Warsaw. Even Lisbon and Rome will not get Birmingham flights until the end of March 2012.

European capitals not served by flights from Birmingham

(but these are served by flights from Manchester or other UK regional airports):

City Birmingham Manchester Edinburgh
Notes
Athens (previously operated by various airlines)
Berlin (previously operated by BACON)
Helsinki
Lisbon (YES) (new route starts 31 March 2012)
Moscow
Oslo (previously by Ryanair to TRF?)
Rome (YES) (new route starts 25 March 2012)
Stockholm (previously by Ryanair to NYO?)
Vienna
Warsaw (previously operated by Norwegian)

Now, surely I’m not being fair on Birmingham here? Aren’t there many other European capitals and major cities which are served by flights from Birmingham?

European Capital* Cities which are served by Birmingham flights:

City Birmingham Manchester Edinburgh
Amsterdam*
Brussels
Copenhagen
Dublin
Istanbul*
Paris
Prague
Zurich*

In virtually all of the above cases, other the cities served from Birmingham are also served from Edinburgh. European cities which are served by Birmingham flights, but not by flights from Manchester, are few and far between.

If there is any unfairness, it is that there are numerous cities in Germany which are both more commercially important than Berlin, and which are served from Birmingham. Yet, Berlin is still important in its own right, both for business, and as a key city break destination. If there are flights to Berlin from several other UK airports, then why not from Birmingham, especially as the new Brandenburg Airport should create an opportunity for new routes.

Surely, it would be easier to create incentives for the airlines already at Birmingham to open up new routes to some of these key cities, rather than chasing much harder to win contracts for flights to Asia, which have so far failed to materialise in any great way from Manchester, and which would be even less likely to work from Birmingham, given its proxmimity to London. And why should anyone fork out a hefty High Speed 2 rail fare to arrive in some field right on the edge of the Birmingham Airport complex, when Virgin Trains will take them to within a two minute shuttle ride of the main terminal building, with an only marginally longer journey time?

Notes:

  • * Amsterdam is nominal capital and most important commercial city in the Netherlands. Seat of government is in The Hague.
  • Zurich is both commercial capital of Switzerland and main gateway airport to Bern.
  • Istanbul is largest commercial city in Turkey.

The end for Galway flights?

Posted on by
1

Next Monday sees the last Aer Arran flights from Galway, as the airline says they are no longer competitive. This marks the death knell for the airport in terms of passenger flights, but unlike in the UK, airport bosses can’t blame air passenger duty for their own failings. It looks like improved road links between Galway and Dublin have a lot more to do with it.

Aer Arann flights had operated to Lorient in France, and Edinburgh, London Luton, London Southend and Manchester in the UK. Domestic flights to Waterford were also available.

Could Galway be rescued by Ryanair? This can’t happen, as the runway at Wateford, being just under 1,300m long, is too short to be able to handle Ryanair’s Boeing 737-800 jets. British regional airlines like Eastern and Flybe do have the right kind of aircaft to operate commercial flights from Galway, but they are unlikely to be interested in operating any of the routes Aer Arann have cancelled, as if they can’t work for them, they are unlikely to work for another airline. One possible exception might be London – Flybe have a well established operation at Gatwick, which is better connected to central London than either Southend or Luton. Flybe already operate a small selection of other flights to Ireland from their various UK regional bases. They might just be tempted to look at Gatwick to Galway flights, but don’t count on it.

New taxes likely on USA flights

Posted on by
2

Fed up with high Air Passenger Duty on flights from the UK? Tough – it looks like taxes are likely to get a lot steeper on flights departing from airports in the USA.

In what USA Today are calling a rare show of unity, it looks like politicians from both side of the fence are accepting that increasing taxes on flights is a ‘low hanging fruit’ option which would be easy to implement, and which would just lead to airlines passing on the extra charges to passengers.

Perhaps politicians on the other side of the pond are being more honest in one respect – there is no suggestion of these taxes being an environmental levy, it is a simple means of providing some funds to help plug the multi-billion dollar budget deficit. Where they have an easy sell is in proposals to double the ‘security fee’ from $2.50 to $5 per flight – a move which will affect all UK visitors flying home, aswell as any UK tourists taking internal or connecting flights within the US. The irony, of course, is that this tax is totally disproportionate to the actual costs of providing security, which can also be met through the airport usage fee. In the USA, even now we have passed the 10 year anniversary of the 9/11 horrors, security is an easy sell – whereas in Europe I think we are a bit more sceptical.

There is also a proposal to tax each flight to the tune of $100 per departure – a proposal previously mooted in the UK, but never implemented.

No doubt our fresh-faced new transport secretary will be watching closely!

APD is not a green tax – told you so!

Posted on by
Reply

As confirmed in our news story, chancellor George Osborne has admitted what we knew all along, namely that Air Passenger Duty (APD) is purely a revenue raising measure, not a green tax.

Finally Chancellor George Osborne has, albeit unwittingly in the form of a leaked letter, admitted that APD is “fundamentally a revenue raising duty” and currently raises around £2.5billion per year.
Mr Osborne’s admission that APD is nothing more than a tax grab came in a letter obtained by a national newspaper that he wrote to Olivier Jankovec, director general of the Brussels-based Airports Council International.

  • Do you think it is a green tax?
  • Do you think it should be revised up or down?
  • Do you think flights should be taxed in a different way?

 

Heathwick is just plane thick!

Posted on by
3

So it looks like the government wants to take a closer look at a £5 billion high-speed train link between Heathrow and Gatwick, dubbed ‘Heathwick’. Whilst this might have some use for people who already have to transfer between the airports, it would be totally pointless as a way of making some kind of joint ‘superhub’ for flight connections.

There is one simple reason for this – there just isn’t enough spare capacity at either airport to justify building a link between them.

Another problem would be that even if such a link might take a nominal 15 minutes between the two airport sites, it still would have to make multiple stops to pick up passengers at the three different terminal areas in the Heathrow site, and then make two drop-offs to cover the North and South terminals at Gatwick.

British Airways will no doubt be looking at the proposal with some moderate interest, as they are the largest hub airline at Heathrow, but they also have a sizeable network of routes from Gatwick, with passengers currently having to transfer between the two airports by bus. However, BA would still be much keener to see a third runway at Heathrow, even if that has been dismissed by the government.

Oddly enough, the £5 billion price tag is in the same ballpark as the (then) £6.9 billion Rugby Airport proposal, which would have delivered a three-runway facility halfway between Rugby and Coventry. Widely ridiculed at the time for being a white elephant no airline is interested in, it could have fast connections to London via the proposed high speed two rail line.

Even though there are a number of technical problems with the Rugby site, it is starting to look remarkably good value, when compared to anything coming from the current government, which, when it comes to transport policy, is remarkably lacking in sensible ideas.

What other long haul flights from Belfast would you like to see?

Posted on by
2

Now that chancellor George Osborne has slashed the rate of taxation on direct long-haul flights from Northern Ireland, other airlines will be looking to see if they can launch new Belfast flights. Although the catchment area of Belfast is still limited compared to other airports in the British Isles, there are still a few routes which might now become viable.

Which destination would you like to see served by long-haul flights from Belfast?