Fares fair: UK air fares are below the 'correct' price for travel all over the world
Researchers set one-way economy class journey price at £32, plus 7p for every mile of the flight
Simon Calder is Travel Editor at Large for The Independent, writing a weekly column, various articles and features as well as filming a weekly video diary. Every Sunday afternoon, Simon presents the UK's only radio travel phone-in programme called The LBC Travel Show with Simon Calder (97.3 FM). He is a regular guest on national TV, often seen on BBC Breakfast, Daybreak, ITV News and Sky News. He is often interviewed on BBC Radio, particularly for BBC Radio 4’s You & Yours programme and BBC Five Live.
Sunday 25 August 2013
Ever since the no-frills airlines transformed flying, and started selling seats at a wide range of prices, travellers have fretted over fares – and whether they have paid more than they should for the trip. At last, researchers have devised an equation for the “correct” price for a one-way economy-class journey: $50 (£32), plus 11c (7p) for every mile of the flight. The results show that most passengers flying from Britain pay significantly less than the global average.
This revolutionary piece of research allows travellers to judge how good a particular deal is. Taking the popular journey from Manchester to Malaga, the benchmark fare is £226 return. For travel in September, many deals are available on the route for significantly less. But over the Bank Holiday weekend many people will be paying much more. The lowest one-way flight on the route from Malaga to Manchester today is £354 on easyJet.
Almost all airlines operate “yield management” pricing. This process seeks to maximise the earnings from each departure by varying fares according to how well the flight is selling. Generally, early bookers will pay the lowest fares, but if take-up for a particular flight is sluggish then the price will drop in a bid to stimulate sales.
The fares study is by an Australian travel planning website, Rome2rio. Millions of economy fares on thousands of airline routes were examined. The 20th percentile fare (where 20 per cent of fares are lower, and 80 per cent are higher) was used to calculate rates per mile.
Dr Michael Cameron, co-founder of Rome2Rio and a former Microsoft software engineer, told The Independent:
“We decided upon 20th percentile because this better represents the fares travellers would actually purchase. A single search on a travel site like Rome2rio often returns hundreds of air fares, many of which are not as good value and the traveller would likely never purchase, but inflate the median (50th percentile).”
The effect of competition on air fares is demonstrated by comparing the benchmark return fare to two transatlantic destinations from London. The predicted fares to Bermuda and New York are £544 and £548 respectively, since they are almost exactly the same distance. But on London-New York, which has six competing airlines, fares of £481 are easy to find next month on BA. To Bermuda, a route BA has to itself, the lowest fare is £724.
The Independent applied the researchers’ formula to a dozen destinations from London, ranging from Amsterdam to Sydney. Because the UK is the most competitive nation in the world for aviation, fares are typically lower than the figure generated by the formula. Between London and Rome, for example, the benchmark return fare of £188 (including Air Passenger Duty and other charges) is easily undercut with a little advance planning on BA, easyJet, Monarch and Ryanair.
Many long-haul departures from London also offer better-than-predicted prices. While the calculation for Rio is in line with typical fares at £870 return, average rates paid to Singapore and Sydney are much more favourable than expected.
To Singapore, even non-stop services on BA and Singapore Airlines are usually sold at well below the £1,008 return predicted by the model. London-Sydney economy fares next month are typically £500 lower than the £1,442 that the formula suggests. Over Christmas and New Year, though, demand from England cricket fans travelling out for the Ashes is pushing up prices on quality airlines to £2,000 or more.
The study did not address another cause for anxiety among passengers: the seeming inevitability that the person in the adjacent seat has paid less for the same journey.
Now departing London … the benchmark return air fare to a dozen top cities
City Miles Predicted return fare (£)
Amsterdam 216 94
Dublin 288 104
Edinburgh 333 111
Barcelona 705 163
Rome 891 188
Athens 1496 240
Dubai 3401 540
New York 3455 548
Johannesburg 5638 854
Rio 5759 870
Singapore 6744 1008
Sydney 10557 1442
(Distances provide by OAG; calculations by The Independent)
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