The True Cost of a Flight
Limits to the cheap-flight strategy
Joachim Kirsch | Claus Lintz | Johannes Delion | Franz Clemens Augustin | Dennis Veit
Jul 2019
| White Paper
| English
The True Cost of a Flight
Limits to the cheap-flight strategy
Twenty euros for round-trip airfare from Stuttgart to Mallorca—low-cost carriers have been attracting ever more passengers with offers like these since the 1980s. Generally speaking, consumers are pleased about the low costs. But with prices like these, it would appear that low-cost carriers have overplayed their hand. Overcrowded airport terminals and delayed or cancelled flights are annoying passengers more and more. In a fiercely competitive environment, airlines find it difficult to generate sustainable profits while creating an excellent passenger experience.
Civil aviation in Europe is at a crossroads. This white paper by Porsche Consulting examines the question of an appropriate ticket price to help civil aviation to transform itself into a healthy system.
Management Summary
- Civil aviation in Europe is at a crossroads. It can only undergo the transformation to a healthy system if it can earn sustainable profits in a fair, competitive environment. A balance should be struck between the interests of passengers, airline, and airports. The aviation industry should once again place greater emphasis on reliability and service quality
- In the long term, no one benefits from cheap tickets—it is not economical for the airline and the passenger often does not receive the service promised. To establish a healthy equilibrium on the market, flexible ways are needed of balancing demand with the ground and air capacities on offer
- Processes and procedures must be designed in such a way that travel becomes more of an experience again and less of a chore. Flight prices should be appropriate, reflect real added value for customers, and stand in reasonable relation to prices for other means of transport. A ticket to Mallorca may then cost more than the taxi ride to the airport
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