Tag Archives: USA

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

How to save 36% on New York car hire

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New York is one of the most popular destinations for people taking long haul flights into the USA, and many people jump straight off the plane and head into Manhattan without even thinking about hiring a car.

Yet a car is ideal for exploring the huge range of places that can be reached beyond New York itself, so here’s a simple way to save upto 36% on New York car hire.

The advice is simple – just land in the right place! So many people put a huge amount of effort into squeezing every last penny off their flights that they don’t think about the additional costs at each end of the journey. For a long time, we have warned against the costs of flying into Newark Airport and taking a taxi into Manhattan – this will set you back around $100 including tips and tolls, compared to $60 from JFK – but the journey back to Newark will cost an extra $15 surcharge on top. This relates to the fact that Newark Airport is in the state of New Jersey, and New York taxis cannot pick up passengers there and vice-versa, so you are paying an out-of-state surcharge, and you pay the tolls in both directions (although the Holland Tunnel is only chargeable heading in to Manhattan).

When it comes to New York airport car hire, the advice is the same, except in reverse – this time, it is much cheaper to pick up your car at Newark. Again, local taxes play their part here, and these vary from state to state.

So, I looked at a week’s Newark Airport car hire in March, and this came out at £167 for JFK or just £114 for Newark – a saving of 32%. Look forward to November 2012 and the JFK rate ramps up to £197, putting it amongst the world’s most expensive car hire locations. Meanwhile, for the same period, Newark Airport car hire comes in at £145, a massive 36% cheaper.

This was for the cheapest car available, so the savings will be greater for family cars. However, the more people there in the the group, the more difference small savings in airfares will make. If you are taking New York flights from London, you can select the best fare / car hire combination to either airport.

If you live near airports such as Birmingham or Manchester, there can be an instinctive urge to look for flights from London, when local flights are available without the hassle and cost of getting to Heathrow. Many UK regional airports offer direct flights to Newark with United Continental, but sometimes indirect flights to JFK via another European hub can be cheaper. Beware that if you are adding on a hire car, this could be a false economy.

Check New York Airport car hire with Car Rentals .co.uk

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.

Are British Airways always more expensive when they are the only airline offering direct flights?

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In our news section, we’ve just looked at long haul routes where British Airways is the only airline offering non-stop point-to-point service.

The expectation might be that they would be able to get away with charging a premium for providing such a service – this has always been the way with the traditional airlines. However farcical it might sound, the logic has always been that the punter should be charged more for the direct routing, even though it costs the airlines much less to service such a route.

The article looked at flights to 10 different destinations across Africa, the Americas and Asia. Generally, the rule does still apply – regardless of the cost to the airline, consumers are prepared to pay more for the convenience of a direct routing, and the market is still driven by what the consumer is prepared to pay, rather than what it costs the airline to provide the service.

Infact, the main exceptions to the rule were where you might expect them – on flights to Bermuda, where British Airways were 18% cheaper than the nearest alternative, the non-direct routing would mean taking flights to New York, and then doubling back again to Bermuda – a route which hardly makes any sense at all, considering that Zoom Airlines used to offer flights from Gatwick to New York via Bermuda.

BA were also cheaper on flights to St Kitts and flights to Providenciales in the Turks and Caicos Islands – again, these were niche destinations where the alternative option would have been an unwieldy flight via the USA. However, BA weren’t always cheaper when it came to Caribbean flights where they were the sole direct provider – on flights to the Cayman Islands, it was cheaper to slug it via New York with Continental. Meanwhile, for flights to Trinidad (Port of Spain), BA were effectively competing against themselves, as the cheaper option was to fly with BA to neighbouring Tobago, and then take a short hop from there with Caribbean Airlines. However, the competition here is simply down to the fact that flights to Tobago are also available from airlines like Virgin and Monarch – therefore BA have to be competitive on that sector, making them competitive on the whole route through to Trinidad, providing you take the hop via Tobago.

On all the other routes we looked at, BA were still able to charge a premium for providing the non-stop service. In many cases, the difference was only a few percent, but when it came to flights to Entebbe / Kampala, the difference rose to 41% over the alternative of flying with KLM and Kenya Airways via Amsterdam. We can only assume that this is down as much to the perceived differences in service between British Aiways and their African rivals as much as it is down to the fact that BA serve the route non-stop.