Tag Archives: trains

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

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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

What does Warren Buffett’s train investment say about airlines?

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So, Warren Buffett has invested some $26 billion buying American freight operator BNSF, with news commentators hailing this as an ‘all-in’ bet on the future of the US economy. But there’s more to it than that – it is, of course, a huge leap of faith into the future of railways, even if lumping coal isn’t exactly as glamarous as swish new high speed train sets. But Buffett has never been about style over substance, and trains in Europe are usually associated with massive subsidies.

In typical long-term Buffett style, he has talked about growth potential of rail in the USA over the next 3 decades, and even if this investment is in freight railways, there is no doubt that passenger rail networks will also see substantial development over this period.

Compare this to Buffett’s attitudes towards airlines, after he lost 75% of his $385 million investment in US Airways back in 1995. He pointed out that the he didn’t think the US airline business had ever made money – and this was in an industry without the kind of state carrier subsidies which were common elsewhere in the world. Buffett is quoted as saying, in respect of the Wright brothers’ first flight:

“If there had been a capitalist down there, the guy would have shot down Wilbur. One small step for mankind, and one huge step for capitalism.”

Has anything changed in the airline industry since 1995? Well, there’s been plenty of deregulation across the pond, and plenty of former big names are no longer with us. In Europe, we have Ryanair’s Michael O’Leary echoing many of Buffett’s sentiments, describing the current situation facing European airlines as a ‘bloodbath’, and the ‘perfect storm’. Of course, Ryanair are one of the few airlines to buck the trend, whereas this morning’s announcement from Lufthansa that they can’t find a suitable bidder for bmi, and that consequently bmibaby are shedding jobs hardly comes as a surprise.

Despite all this, Warren hasn’t been put off from investing in flying alltogether, having ditched his own private jet, aka ‘The Indefensible’ back in 1998, in favour of buying private jet hire company NetJets.

The BNP v Eco-fundamentalists – both are equally fascist

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I have no problem with the vast-majority of environmental campaigners, but there are a dangerous few out there who seem to think it is perfectly reasonable to impose a total ban on all domestic flights within the UK. More worrying than this opinion being widespread is the way it is allowed out on news reports without any kind of counter-argument. Yet whenever there is a suggestion of the BNP getting more air time, there is uproar.

So what is so wrong with suggesting a ban on domestic flights, in the name of the environment?  As the United Kingdom is made up of many islands, a sizeable portion of travel within her borders is always going to be made by air. Even over-land, there are many journeys which are totally unrealistic to make by rail, especially for business travellers wanting to head to important meetings and make it back in a day. People who think that it is an easy switch from air to rail tend not to be the ones that take the trains all that often.

Where rail services have improved, such as between London and Manchester, the proportion of people travelling by train has increased, but there will always be some people who will want to choose to fly, or who want to take a plane because the next step of their journey is an onward flight to another destination. As the network currently stands, travelling by train from Manchester to Heathrow is a great deal less convenient than flying.

Of course, some communication can be done by electronic means, but if travel broadens the mind, then those people who seek to prevent people from travelling must have very narrow minds. Except that they masquerade as intelligent, educated people acting in our best interests. At least we know what we are getting with the BNP – mindless thugs who want to see certain sectors of the population sent away. But we should never forget that freedom to move within our borders is just as important as the freedom to cross borders. I have spent time in Saudi Arabia, where we had to get a ’50k pass’ to travel internally, and it was a bureaucratic nightmare.

The environmental damage caused by flying is already healthily compensated for by existing APD (Air Passenger Duty), which is levied twice on internal flights – both on the outbound, and on the inbound journey. Even moderate increases in APD, when not counter-balanced by our European neighbours, result in a huge discouragement to travel within the UK, as flights abroad are proportionally taxed at a lower rate.

So by all means, let’s have a reasoned debate about choices in travel mode, and about their environmental impacts. But let’s not be fooled by people who think an outright ban on domestic flights, or even steep increases in their taxes, is remotely in the UK’s best interest.