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Aci Europe: new study on air fares

It reveals the real determinants of airline ticket pricing

This afternoon, at the "2nd ACI EUROPE Airport Investment Symposium", a new Study was released providing fresh insights into the evolution and logic of air fares and airline ticketing.

The study, entitled "Identifying the Drivers of Air Fares" and produced by Global consultancy, Icf was commissioned by ACI EUROPE with a view to gaining an independent analysis of the real world determinants of air fares. It follows a sustained campaign by some airlines, which contend that reductions in airport charges would be passed-through directly to passengers in lower air fares.

ICF’s analysis notes how the static nature of airport charges, which are set well in advance and do not vary for long periods of time, contrasts with the extremely dynamic pricing techniques used by airlines to set air fares. This results in constant and significant ticket price variations, which can reach up to 700% for the same product.

Even more interestingly, the illustrative searches undertaken within the study also found that ticket prices on monopoly airline routes are consistently more expensive than those on routes served by two or more competing airlines – further proof of the disconnect between airport charges and air fares.

With airline consolidation set to further develop in Europe in the coming years, the ICF Study provides an insight into the risks inherent in having fewer airlines expanding their market share.

Demand for air transport in Europe is expected to keep growing - with ACI forecasting passenger traffic at Europe’s airports to increase from 1.93 billion passengers in 2015 to 4.78 billion by 2040.

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