November 29, 2021

European Airfares Look Inviting Next to U.S. Prices

But travelers who have flown within Europe lately often took away a different impression — that airline tickets were surprisingly inexpensive, especially compared with prices to fly within the United States.

A one-way ticket between Edinburgh and Dublin, for instance, can cost as little as $40. A one-way ticket from New York to Washington, about the same distance, starts at $65. Both prices, which vary depending on the travel date, include taxes and unavoidable fees, but not baggage and other optional charges.

While it is tough to do a statistically rigorous comparison, especially since the European Union does not collect fare data for its 27 members, there is little doubt that ticket prices have fallen sharply within Europe, despite higher fuel costs, because of an explosion of competition from low-fare airlines like easyJet and Ryanair. Although Southwest Airlines and other carriers have put similar pressure on prices within the United States, anecdotal data suggests that it is still generally more expensive to fly between major cities in America than it is to fly between cities in Europe.

“Even after taxes, you see a better fare per mile in the European Union than you do in the United States,” said Mark Milke, a director at the Fraser Institute, a public policy research group in Calgary, Alberta, who published a paper last year comparing the lowest fares available on a sample set of routes.

Using that data, Mr. Milke calculated that airline passengers traveling within a single country in Europe last year were paying about 11 cents a mile, including taxes and fees, or 14 cents a mile to fly between two European countries. In the United States, by contrast, passengers were paying about 23 cents a mile.

Since these figures were based on a limited number of case studies, results from a wider set of data would probably vary. In fact, the Air Transport Association, the airlines’ trade group, calculates that domestic tickets in the United States cost about 16 cents a mile, excluding taxes, or at least 19 cents a mile with taxes (using the group’s estimate that taxes add 20 percent to the price of a ticket).

Carlos Mestre, deputy head of the European Commission’s transport unit, said the European Union did not collect data from airlines that would enable it to calculate a similar cost per mile. But based on information the commission has gathered, it has published numerous reports that say airfares have decreased significantly since the late 1990s, when the European Union began allowing airlines to fly freely among member countries.

“Prices have gone down quite dramatically,” Mr. Mestre said, explaining that the rapid expansion of low-fare carriers has increased competition on many routes that were once dominated by a single national airline. The number of routes within Europe has also increased 140 percent from 1992 to 2010.

Low-fare airlines now carry more than a third of all passengers traveling within Europe, forcing older competitors to lower prices, especially on popular routes.

“In Europe, there has been an awful lot more competition in the last 10 years,” said Brian Pearce, chief economist for the International Air Transport Association. “That has led to a lot more choice for passengers as well as it being cheaper to travel.”

Mr. Pearce said European travelers had benefited from the fact that many large cities had multiple airports, allowing newer airlines access to these markets. That is not so much the case in the United States, where airlines like Southwest have fought to obtain scarce takeoff and landing slots in congested cities like New York.

European airlines also face more competition than their American counterparts from other forms of transportation, particularly Europe’s robust rail network.

That competition is likely to increase in the coming years, since the European Commission recently announced an initiative to standardize the information on rail schedules and prices across member countries, making it easier for travelers to compare the cost of airlines versus the train between two cities. On some routes, ferries could be part of that comparison.

Steve Lott, a spokesman for the Air Transport Association, said the shorter distances between cities in Europe was another factor influencing the competitive landscape.

“What type of model capitalizes on frequent short-distance flights?” he said. “Low-fare airlines.”

Those shorter distances also mean that driving is a viable option for many trips within Europe, especially now that border controls have been lifted, creating further competition for European carriers, Mr. Lott said.

Some analysts also note that Europe is going through a competitive phase that already took place in the United States after airline deregulation in the 1970s.

“They’re earlier in a process the U.S. experienced a while ago,” William S. Swelbar, a research engineer with the M.I.T. International Center for Air Transportation, said, noting that when adjusted for inflation, the average domestic fare in the United States has declined more than 50 percent since deregulation.

“We have a maturing market and maturing airlines,” he said. “As a result we’re seeing prices go up.”

Others argue that regulatory policies in the United States favor established airlines, stifling competition and making it harder for new carriers to enter the market and succeed.

Mr. Milke is among those who say they believe that rules prohibiting foreign-owned airlines from operating in the United States — for example, allowing Aer Lingus to fly passengers from Boston to Chicago — keeps ticket prices higher than they would be if this restriction were dropped.

“Low fares are the result of the removal of barriers to competition,” he said. “With lower prices, people travel a lot more, and that creates jobs.”

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