No more traveling by plane for the price of a mojito on the terrace. At least on Ryanair. Michael O’Leary officially announced the end of the promotional campaigns that allowed, from time to time, to pay a ticket (without luggage) at 9.99 euros, or even 99 cents.
The Ryanair boss also announced in the process that the average price of its tickets would increase from 40 to 50 euros, an increase of 25%. But Ryanair just follows the general trend. All airlines tend to increase the price of their tickets. And this more easily as demand is strong, despite much higher prices than before the Covid crisis.
Traveling by plane is much more expensive than in 2019
Compared to the summer of 2019, the average price of airline tickets departing from France has increased by 21% on domestic flights. The increase is more moderate for flights to Europe (+11%) or North America (+18%), but exceeds 40% for Asian destinations. This clearly shows that competition limits price increases. Since the price war with low cost companies focuses on intra-European flights.
Can we be sure that Ryanair will not release its tickets for less than 10 euros, if oil falls below 50 or 60 dollars a barrel? With Michael O’Leary, you can never be sure of anything. But everything conspires to make this return impossible.
French companies dream of a minimum price of 350 euros round trip
On the one hand, the traditional companies that militate for a minimum ticket price. The National Union of French Airlines, for example, defends the establishment of a minimum fare of 350 euros round trip for domestic flights and 450 euros for intra-European flights.
Several States also defend this idea. In 2020, Austria, for example, wanted to introduce a minimum price of €40 per segment. But Brussels, seeing it as a possible breach of internal market rules, has asked Vienna to review its copy. The European Union remains attached to the principle of freedom from tariffs, which guarantees healthy competition.
Brussels wants to play with the price of fuel to end tickets that are too cheap
On the other hand, he campaigns for the “greening” of air transport. And therefore it aims to encourage companies to be more virtuous by reducing their CO2 emissions. He has planned to operate two levers together: the progressive taxation of kerosene and the mandatory addition of sustainable fuels to kerosene.
That increase, progressively, the cost of fuel and, consequently, the price of tickets. This would de facto make it impossible to return Ryanair’s €10 tickets.
Source: BFM TV
