New study on air fares reveals that airport charges don’t determine ticket prices | Airport World Magazine

Competition on routes holds the key

ACI Europe president and CEO of Munich Airport, Dr Michael Kerkloh, commented: “The study spells it out very clearly that the underlying demand and the level of competition between airlines on any given air route are the key determinants of air fares.

“This means that airlines will always aim to exercise their pricing power irrespective of the underlying costs of providing the service.”

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.

According to ACI Europe, this results in constant and significant ticket price variations, which can reach up to 700% for the same product.

Airline consolidation

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.

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New study on air fares reveals that airport charges don’t determine ticket prices – Airport World Magazine.