Happy holidays

Travel prices rise as competition narrows

Holiday Travel
Air fares are up, up and away. Source: AP

With Germany teetering on the brink of holiday season, it’s the last thing anyone wants to hear: Vacations are becoming more expensive because airlines are quietly raising ticket prices.

The rises are in part a result of a shortage of planes on some routes following last year’s insolvency of Germany’s second-largest airline, Air Berlin.

Fares for medium-haul flights on weekdays are up 45.6 percent from last fall, according to research by comparison site Mydealz. Weekend fares are up 15.2 percent. On short-haul flights, prices were up 9.5 percent weekdays and 7 percent on weekends.

A lack of competition is thought to be a major contributor to the rises. Nineteen of the 50 routes examined were flown by just one airline and had average fare gains of 33.5 percent, Mydealz said.

But if you’re one of the many who has still yet to book a trip, don’t panic. Flight prices are unlikely to explode any time soon. Britain’s Easyjet, which took over large parts of Air Berlin, is expanding its operations in Germany, increasing competition for national carrier Lufthansa and other smaller airlines.

Buses too

Prices are not only rising in the skies. Back on terra firma long-distance coach fares have also been increasing. But again, these will probably be kept in check by competition, this time from the railway. Train operator Deutsche Bahn, for example, has announced it will offer discount tickets from €19.90 ($23.20) from August to deter customers from resorting to coach services such as Flixbus.

The railway has the advantage that it’s faster than coaches, which forces bus companies to keep their fares significantly below train ticket prices.

Airlines and coach services are well aware that price remains the most important factor for customers, as a recent survey by airport association ADV confirmed. For European flights, 48 percent of customers base their choice of airline on price, it found. In the domestic German market, the percentage falls to 30 percent because these are mostly used by business travelers who care more about departure times.

All in all, it might be worth considering a driving holiday this year.

Jens Koenen leads Handelsblatt’s coverage of the aviation and space industry. To contact the author: koenen@handelsblatt.com

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