Saturday, August 02, 2008

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It is not yet the end for budget air travel


Photo by Raboe - http://en.wikipedia.org/wiki/Image:Ryanair_pescara_03.jpg

The Financial Times, on 1 August 2008, had an article entitled It is not yet the end for budget air travel.

It made the following points:

1. British Airways says fares must rise sharply to reflect higher fuel costs.

2. Michael O’Leary, boss of Ryanair, says Air fares are going to fall, as part of a new price war.

3. British Airways argues that fuel now makes up 40-50 per cent of the industry’s total costs.

BA plans to reduce the number of its flights and push up prices.

4. Ryanair is the lowest-cost producer in the business. It has lots of cash and one of the strongest balance sheets. It is hoping that it will gain market share.

So long as Ryanair is the lowest-cost producer, it is likely to be 'the last man standing'.

Kevin Done (It is not yet the end for budget air travel ) writes:

"I need to get to the southern Scottish Highlands in mid-October. For weeks I have been trying to obtain one of the cut-price deals supposedly available to travel by rail on the overnight sleeper. Forget it. They are as elusive as the monster in the loch.

"On Friday morning I bought two Ryanair tickets from London Stansted to Glasgow Prestwick for £55.96, a lot less than it costs for a tank of diesel for our VW Golf. That was the total price, two people, all in, including all taxes and charges and including £16 as the credit card handling fee. Yes of course we will check in online, check in no bags, and each have only one carry-on bag weighing less than 10kg. And we will run to the plane. That is the O’Leary contract. But throw in the hire car and petrol, the train from Liverpool Street to Stansted (nearly half as much as the air fare) and there is still nothing to touch it. The return sleeper for two would have been £378."

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