Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR

 
lowwkjax
Topic Author
Posts: 37
Joined: Sun Sep 02, 2018 10:52 am

Austria to introduce minimum price for plane tickets

Mon Jun 08, 2020 9:34 pm

In today’s press statement the Austrian government has presented their strategy to save OS. While it’s generally good news that most of the jobs can be saved and OS will continue to operate, including a requirement to keep the VIE hub and it growing in the same numbers as MUC and FRA (percentage wise), it also includes a new regulation affecting every airline. Ticket prices below the federal taxes won’t be allowed anymore, so an airline won’t be permitted to sell tickets for less than what taxes and fees are. This means that there won’t be anymore tickets below roughly 40 euros anymore. I don’t think that regulation of prices is the way to go, the only thing I see here is them trying to protect OS from LCC which could turn out to be a problem once a LCC takes this to court. What do you guys think?

https://www.austrianaviation.net/detail ... e-branche/
 
SA280
Posts: 31
Joined: Sat Nov 02, 2019 1:18 pm

Re: Austria to introduce minimum price for plane tickets

Mon Jun 08, 2020 9:41 pm

What a bad protectionism!

The immediate output of this policy will be a reduction in the overall capacity. In order to protect a mismanaged airline and save those jobs, the Austrian government is going to harm Austrian consumers and make Austria a less attractive destination for European tourists. The damages to the whole economy look far superior to the benefits they intend to promote.
 
ltbewr
Posts: 15102
Joined: Thu Jan 29, 2004 1:24 pm

Re: Austria to introduce minimum price for plane tickets

Mon Jun 08, 2020 9:42 pm

Seem to me they want a minimum amount of tax and fees to be paid no matter the base fare. It makes sense and may be necessary to maintain facilities fee revenues and general tax income to the country.
 
santi319
Posts: 999
Joined: Thu Dec 29, 2005 3:24 pm

Re: Austria to introduce minimum price for plane tickets

Mon Jun 08, 2020 9:44 pm

This will stimulate traffic in BTS, specially LCC. Mainline airlines will be the ones benefiting from this.
 
User avatar
armagnac2010
Posts: 23
Joined: Sun Jun 07, 2020 12:45 am

Re: Austria to introduce minimum price for plane tickets

Mon Jun 08, 2020 10:03 pm

Curious to see if it passes EU rules, setting a minimum price is generally not acceptable.

Also curious how Austrian customers will be able to redeem their Miles and More flights.
 
jomur
Posts: 343
Joined: Sun Jun 19, 2016 6:36 pm

Re: Austria to introduce minimum price for plane tickets

Mon Jun 08, 2020 10:08 pm

armagnac2010 wrote:
Curious to see if it passes EU rules, setting a minimum price is generally not acceptable.

Also curious how Austrian customers will be able to redeem their Miles and More flights.


If Scotland can get away with having a minimum price for Alcohol then the EU will not care about minimum prices for an airline ticket.
Last edited by jomur on Mon Jun 08, 2020 10:19 pm, edited 1 time in total.
 
IWMBH
Posts: 612
Joined: Tue Apr 17, 2018 5:01 pm

Re: Austria to introduce minimum price for plane tickets

Mon Jun 08, 2020 10:15 pm

This won’t work. If Ryanair sells tickets as an Irish company for a plane departing Vienna they don’t have to comply to this rule. If an Austrian company want to sell tickets below €40,- they just move to an “office” outside Austria. This is just a government saying “hey look at us being progressive” but actually achieving nothing.
 
klm617
Posts: 4862
Joined: Sat Jul 04, 2015 8:57 pm

Re: Austria to introduce minimum price for plane tickets

Mon Jun 08, 2020 10:24 pm

lowwkjax wrote:
In today’s press statement the Austrian government has presented their strategy to save OS. While it’s generally good news that most of the jobs can be saved and OS will continue to operate, including a requirement to keep the VIE hub and it growing in the same numbers as MUC and FRA (percentage wise), it also includes a new regulation affecting every airline. Ticket prices below the federal taxes won’t be allowed anymore, so an airline won’t be permitted to sell tickets for less than what taxes and fees are. This means that there won’t be anymore tickets below roughly 40 euros anymore. I don’t think that regulation of prices is the way to go, the only thing I see here is them trying to protect OS from LCC which could turn out to be a problem once a LCC takes this to court. What do you guys think?

https://www.austrianaviation.net/detail ... e-branche/


Isn't Austrian part of the Lufthansa group ?
the truth does matter, guys. too bad it's often quite subjective. the truth is beyond the mere facts and figures. it's beyond good and bad, right and wrong...
 
Varsity1
Posts: 2196
Joined: Mon May 02, 2016 4:55 am

Re: Austria to introduce minimum price for plane tickets

Mon Jun 08, 2020 10:29 pm

LCC's killing the legacies off is a long term problem. The legacies provide a transportation infrastructure that is vital to the country and economy. If I need to travel between two secondary cities in Europe, it quickly becomes impossible on LCC air service alone.
"PPRuNe will no longer allow discussions regarding Etihad Airlines, its employees, executives, agents, or other representatives. Such threads will be deleted." - ME3 thug airlines suing anyone who brings negative information public..
 
IWMBH
Posts: 612
Joined: Tue Apr 17, 2018 5:01 pm

Re: Austria to introduce minimum price for plane tickets

Mon Jun 08, 2020 10:39 pm

Varsity1 wrote:
LCC's killing the legacies off is a long term problem. The legacies provide a transportation infrastructure that is vital to the country and economy. If I need to travel between two secondary cities in Europe, it quickly becomes impossible on LCC air service alone.


I don’t agree, I think there is a market for both. But, even if this is the case than the LCC have every right to do so. If there is a market for travel between two “secondary cities” than an airline will open the route. If not, good riddance.
 
davidjohnson6
Posts: 796
Joined: Mon Jun 20, 2016 10:10 pm

Re: Austria to introduce minimum price for plane tickets

Mon Jun 08, 2020 10:43 pm

Ryanair will almost certainly challenge the minimum fare rule being proposed. In the case of Scotland having a minimum price per standard unit volume of alcohol, this relied on EU law allowing individual Govts to create laws to protect human life and the health of citizens - i.e. make it harder for alcoholics to destroy their livers. It depends very much on whether the Austrian and EU courts decide that minimising CO2 emissions by virtue of minimum price is permissible. It seems likely that the Austrian Govt in requiring this condition will have taken advice from lawyers who are expert in this area of law. There may also be the argument about whether airlines should be allowed to engage in price dumping (i.e. routinely selling well below cost so as to damage a rival) as an anti-competitive practice

While Ryanair is Irish, I assume the proposed law will apply to all flights which depart an Austrian airport, regardless of airline nationality. Ryanair and Wizz are the likely losers here. I think non-monopoly routes will not move to Bratislava; VIE has good roads and public transport to Vienna city but BTS does not. Vienna has a much larger and richer population than Bratislava and is a much greater tourist draw.

Yes one can argue that companies should be able to sell a little below cost price to stimulate a market briefly, but the idea of routinely selling well below cost price for something that is seen to create environmental damage for which an airline carries little liability is likely to be well received by many people who fly maybe 2 or 3 times per year
 
Varsity1
Posts: 2196
Joined: Mon May 02, 2016 4:55 am

Re: Austria to introduce minimum price for plane tickets

Mon Jun 08, 2020 11:48 pm

IWMBH wrote:
Varsity1 wrote:
LCC's killing the legacies off is a long term problem. The legacies provide a transportation infrastructure that is vital to the country and economy. If I need to travel between two secondary cities in Europe, it quickly becomes impossible on LCC air service alone.


I don’t agree, I think there is a market for both. But, even if this is the case than the LCC have every right to do so. If there is a market for travel between two “secondary cities” than an airline will open the route. If not, good riddance.


There are city pairs that don't support a direct flight and require a connection. LCC's don't provide that, not practical and reliably.

Belgrade and Bremen, how would a business professional get between these places on a reliable schedule?
"PPRuNe will no longer allow discussions regarding Etihad Airlines, its employees, executives, agents, or other representatives. Such threads will be deleted." - ME3 thug airlines suing anyone who brings negative information public..
 
IWMBH
Posts: 612
Joined: Tue Apr 17, 2018 5:01 pm

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 12:30 am

Varsity1 wrote:
IWMBH wrote:
Varsity1 wrote:
LCC's killing the legacies off is a long term problem. The legacies provide a transportation infrastructure that is vital to the country and economy. If I need to travel between two secondary cities in Europe, it quickly becomes impossible on LCC air service alone.


I don’t agree, I think there is a market for both. But, even if this is the case than the LCC have every right to do so. If there is a market for travel between two “secondary cities” than an airline will open the route. If not, good riddance.


There are city pairs that don't support a direct flight and require a connection. LCC's don't provide that, not practical and reliably.

Belgrade and Bremen, how would a business professional get between these places on a reliable schedule?


If enough people want to travel between these city for the right price, someone will pickup the route. If not, you’ll need a stopover. It might be worth it to some airlines to fill planes on profitable routes, but that won’t change because of LCC’s.
 
FlyingElvii
Posts: 772
Joined: Wed Dec 27, 2017 10:53 pm

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 12:53 am

armagnac2010 wrote:
Curious to see if it passes EU rules, setting a minimum price is generally not acceptable.

Also curious how Austrian customers will be able to redeem their Miles and More flights.

At this point, it is safe to say that the EU is dead, it is every nation for themselves now.
 
ethernal
Posts: 293
Joined: Mon May 06, 2019 12:09 pm

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 12:55 am

Varsity1 wrote:
IWMBH wrote:
Varsity1 wrote:
LCC's killing the legacies off is a long term problem. The legacies provide a transportation infrastructure that is vital to the country and economy. If I need to travel between two secondary cities in Europe, it quickly becomes impossible on LCC air service alone.


I don’t agree, I think there is a market for both. But, even if this is the case than the LCC have every right to do so. If there is a market for travel between two “secondary cities” than an airline will open the route. If not, good riddance.


There are city pairs that don't support a direct flight and require a connection. LCC's don't provide that, not practical and reliably.

Belgrade and Bremen, how would a business professional get between these places on a reliable schedule?


Just to play devil's advocate... a mesh of point-to-point routes across various carriers would provide very decent coverage even to secondary cities (especially as LCCs continue to take away market share from legacies). IRROPS would become the biggest issue there (stranded in a city) since you're not necessarily "connecting" at a hub.

Beyond that, Europe has the advantage of a decent rail network. Getting close enough is usually good enough. If there is a nonstop to DUS, HAJ, or TXL then you're pretty much just as well off as taking the connecting Lufthansa flight with a typically 2+ hour layover.
 
Thenoflyzone
Posts: 2960
Joined: Sun Jan 07, 2001 4:42 am

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 1:23 am

what was the cheapest fare out of VIE pre-COVID?

Seems to me 40 Euros is not not much of a minimum. Then again, I live in Canada, where cheapest domestic fares we have here are 2.5 times that price.
us Air Traffic Controllers have a good record, we haven't left one up there yet !!
 
User avatar
enilria
Posts: 10179
Joined: Fri Feb 22, 2008 7:15 pm

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 1:41 am

So their competitor gets bailed out and they can’t control their fares?
 
MIflyer12
Posts: 7733
Joined: Mon Feb 18, 2013 11:58 pm

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 1:53 am

Reuters explained this as a Green Party move, in two elements:

- the minimum ticket price mentioned by the OP

- a 30 Euro tax on short haul flights less than 350km

If you want people to take fewer short-haul flights - in favor of lower emission trains, or not going at all - that should do it. That this supports OS against LCC competition is just gravy.

https://www.reuters.com/article/us-heal ... SKBN23F1EN
 
YYZLGA
Posts: 442
Joined: Fri Dec 09, 2016 4:28 am

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 2:32 am

Could we start to see Ryanair selling Bratislava as an alternate Vienna airport?
 
airhansa
Posts: 380
Joined: Wed Jan 08, 2020 3:18 pm

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 2:51 am

Thenoflyzone wrote:
what was the cheapest fare out of VIE pre-COVID?

Seems to me 40 Euros is not not much of a minimum. Then again, I live in Canada, where cheapest domestic fares we have here are 2.5 times that price.


It's occasional for a low cost airline to reach those levels if you book in advance, rare for a full service airline to reach those prices during a very low demand off peak period. Canada is exceptionally expensive for both air and train fares.
 
OSL777FLYER
Posts: 163
Joined: Sun May 06, 2012 8:11 am

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 3:43 am

This is nonsense form the Green Party of Austria.

This will benefit Bratislava. LH might not want to continue with the OS brand. And people will not want to travel to Vienna for a weekend getaway.

LCC's will definitely go for Bratislava as far as Vienna goes.

With regards to other destinations such as Innsbruck and Salzburg, people might choose to go elsewhere.

Just wait until hotels, restaurants etc. start to complain due to lack of customers and income..........As COVID-19 was not enough.
 
eurotrader85
Posts: 157
Joined: Wed Oct 24, 2018 8:45 pm

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 4:30 am

I sincerely hope this gets challenged in court. This is nothing but trying to protect OS from low cost competition. If OS and the Austrian government wants people to fly OS and pay higher fares to keep it viable then maybe OS should focus on providing an actual premium service so people actually want to fly it. Genuinely poor airline and VIE is a terrible hub. I really can never understand why it gets so many flag wavers.

Unfortunately don't think the challenge will come from FR, they will naturally stand to gain, has to come from EZY or W6, the latter of whom are certainly giving OS something to worry about.

It does make me chuckle though, as people have said BTS is only an extra 30 mins drive over VIE from Vienna city centre and will happily mop up some extra pax.
 
marcelh
Posts: 1008
Joined: Wed Jun 19, 2013 12:43 pm

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 5:09 am

FlyingElvii wrote:
armagnac2010 wrote:
Curious to see if it passes EU rules, setting a minimum price is generally not acceptable.

Also curious how Austrian customers will be able to redeem their Miles and More flights.

At this point, it is safe to say that the EU is dead, it is every nation for themselves now.

This is the most hilarious comment I've read in a loooooong time.
 
lowwkjax
Topic Author
Posts: 37
Joined: Sun Sep 02, 2018 10:52 am

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 5:13 am

What I could imagine is e.g. Wizz giving the people one leg for free if they book to/from VIE, like “if you book VIE-xxx with us for €40, you get the flight back for free”, this would also bring the price per flight down to €20 and there’s nothing the Austrian government can do about it if it’s legal in wherever the returning flight is departing (or the first one, depending on where you fly from).

Just want to point out that this law is nonsense since airlines can still play around with the fares as they please and nothing is being accomplished.
 
User avatar
mercure1
Posts: 4753
Joined: Sun Jul 13, 2008 5:13 am

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 5:15 am

Pretty silly to institute a price floor.

Though clearly the politicians have their own agendas here and seek to alter normal market dynamics.

Cant see this will be good long term outcome for consumers or Austrian business sectors that earn living off tourism and travel in general.
mercure f-wtcc
 
marcelh
Posts: 1008
Joined: Wed Jun 19, 2013 12:43 pm

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 5:17 am

Thenoflyzone wrote:
what was the cheapest fare out of VIE pre-COVID?

Seems to me 40 Euros is not not much of a minimum. Then again, I live in Canada, where cheapest domestic fares we have here are 2.5 times that price.


An additional 40 Euros isn't a lot, compared to a weekend Vienna including a decent hotel, fine restaurant and tickets for some "must-see" locations. Been there, done that.
 
airhansa
Posts: 380
Joined: Wed Jan 08, 2020 3:18 pm

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 5:21 am

I also agree that this is more about trying to move passengers back onto the railways. Usually most people in Europe prefer to take the train over the plane, but ticket prices have been so low in the aviation sector that a lot of people have chosen to fly instead. This would therefore force passengers back onto the trains. Though I would suggest that lowering the price of railway tickets would also help drive demand (which is what happened in Japan, where the high-speed rail operators introduces lower stopping fares which essentially "recaptured" the market share back from low cost airlines).
 
User avatar
ro1960
Posts: 1274
Joined: Wed Jan 04, 2006 8:19 am

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 5:25 am

OSL777FLYER wrote:
This is nonsense form the Green Party of Austria.

This will benefit Bratislava. LH might not want to continue with the OS brand. And people will not want to travel to Vienna for a weekend getaway.

LCC's will definitely go for Bratislava as far as Vienna goes.

With regards to other destinations such as Innsbruck and Salzburg, people might choose to go elsewhere.

Just wait until hotels, restaurants etc. start to complain due to lack of customers and income..........As COVID-19 was not enough.


Let’s not get too dramatic. No fares lower than €40 doesn’t mean tickets will be offered for €400 instead. If airlines can offer tickets for €60 instead it’s still a good price and people will buy. I don’t see passengers avoiding VIE as you describe it.
You may like my airport photos:
https://www.flickr.com/photos/aeroports
 
Blerg
Posts: 3958
Joined: Tue Jan 09, 2018 11:42 am

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 5:43 am

Is the railway system really that competitive in Europe? I remember some years ago I had to travel to northern Netherlands (Franker) and then to the south (Maastricht). Both times I flew into AMS from where I took a train to my final destination. Personally, it was horrible with so many stops, change of trains and so on. Another time I had to go to Odense from Copenhagen but the train was so expensive that I ended up taking one of those car sharing rides. All in all, trains might be an option for many Europeans but outside some busy markets is it really the cheapest or most convenient so as to displace aviation in many instances?

As for this move, it won't work long-term because I don't have an impression the government is doing something concrete to address the fundamental issue at Austrian Airlines: cost. What they are doing is throwing money at OS hoping the problem will resolve itself. What interests me more is where is OS actually losing money? Is it from its transfer passengers and network or from O&D? Personally I don't see much of a future for OS. I think they are the next big player to go.
 
User avatar
ro1960
Posts: 1274
Joined: Wed Jan 04, 2006 8:19 am

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 6:01 am

Blerg wrote:
Is the railway system really that competitive in Europe? I remember some years ago I had to travel to northern Netherlands (Franker) and then to the south (Maastricht). Both times I flew into AMS from where I took a train to my final destination. Personally, it was horrible with so many stops, change of trains and so on. Another time I had to go to Odense from Copenhagen but the train was so expensive that I ended up taking one of those car sharing rides. All in all, trains might be an option for many Europeans but outside some busy markets is it really the cheapest or most convenient so as to displace aviation in many instances?


It varies depending on routes and yes it can be inconvenient and people will prefer air over rail. For instance ORY-TLS, busiest domestic route and Europe’s #3 is cheaper than TGV via Bordeaux for a similar door to door travel time.
You may like my airport photos:
https://www.flickr.com/photos/aeroports
 
Blerg
Posts: 3958
Joined: Tue Jan 09, 2018 11:42 am

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 6:03 am

ro1960 wrote:
Blerg wrote:
Is the railway system really that competitive in Europe? I remember some years ago I had to travel to northern Netherlands (Franker) and then to the south (Maastricht). Both times I flew into AMS from where I took a train to my final destination. Personally, it was horrible with so many stops, change of trains and so on. Another time I had to go to Odense from Copenhagen but the train was so expensive that I ended up taking one of those car sharing rides. All in all, trains might be an option for many Europeans but outside some busy markets is it really the cheapest or most convenient so as to displace aviation in many instances?


It varies depending on routes and yes it can be inconvenient and people will prefer air over rail. For instance ORY-TLS, busiest domestic route and Europe’s #3 is cheaper than TGV via Bordeaux for a similar door to door travel time.


How much is an average TGV ticket for such a route?
 
avier
Posts: 1079
Joined: Tue Aug 07, 2018 12:38 pm

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 6:05 am

This is something similar to what India introduced once domestic flights resumed in the country on May 25th. The aim was to prevent certain financially stronger airlines from undercutting fares and hurting already weak competitors and also on some routes from having sky high fares due to say monopoly of an airline on certain routes. So basically that's a floor and ceiling cap*. However, it's only a temporary measure till Aug '20, but seems to be working well for the airlines and consumers.
*The fare limits vary by flight time, so seemed reasonable and fair.

https://www.livemint.com/news/india/ind ... 95867.html
 
User avatar
seahawk
Posts: 9627
Joined: Fri May 27, 2005 1:29 am

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 6:16 am

Storm in a tea cup, as this price includes all taxes and fees, so the only thing it does is stop airlines from promoting 9 Euro tickets and then adding taxes and fees to end up at 50 Euro.
 
Waterbomber2
Posts: 1206
Joined: Mon Feb 04, 2019 3:44 am

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 6:21 am

I don't think that it will be that big an issue.
OS fares are rarely cheap and certainly much higher than 40 EUR and LCC's still have the option to offer more frills like free luggage. I also don't think that this law applies to flights arriving into VIE, as it's based on taxes for pax departing Austria.
So LCC's could set the return fare at 40,01 EUR, 0,01 EUR to VIE, 40,00 EUR from VIE, problem solved.

Personally, I don't think that this will be an issue nor a solution to anything, just fools making up laws that make themselves feel like they achieved something.
 
User avatar
PM
Posts: 5259
Joined: Wed Feb 09, 2005 5:05 pm

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 6:25 am

Things are changing. "Normal" isn't going to come back. Many people hope and believe that we will come out of the pandemic with different priorities. It is hoped that we can become greener. Measures to discourage people from flying unnecessarily may become popular. Airlines that have received state aid may (should) find that it comes with strings attached. I expect more regulation in future, not less. The Austrian move should, I think, be seen in that context.
 
davidjohnson6
Posts: 796
Joined: Mon Jun 20, 2016 10:10 pm

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 6:30 am

Advertising a ticket as costing 1 euro but with 39 euros extra mandatory taxes and fees when you are about to pay was pretty much stopped in the EU years ago

This new measure is about stopping airlines running price promotions where the airline sells a ticket for less than the taxes+fees, and the airline effectively subsidises a passenger to pay. For any ticket, the airline is legally liable to pay those 40 euros even if the passenger pays just 1 euro - this rule is about ensuring the passenger pays a minimum of 40 euros to the airline even if an airline wants to run a price promotion
 
andrej
Posts: 1254
Joined: Mon Jun 18, 2001 8:31 am

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 6:37 am

Lovely protectionism at work. When airlines in Europe region folded, it was a fair market competition, and no governmental support was allowed. Now, as major players are at risk, it is hidden in form of Corona aid. Airlines (namely Lufthansa Group in this case) generated profits for years. It should be company's responsibility to preserve buffer for bad times. When it is not able, due to unprecedented circumstances, it should receive governmental guaranteed loans. Not hand outs and only when business has a solid plan. Austrian has been weak part of the group for years. If Austrian is not able to survive, let it be. Ryanair, WizzAir, and certainly other airlines are ready to step in.

Minimum ticket price is some freaky wet dream of the Greens. If RYR can generate profit at its pricing levels, then let them thrive (they should not be given any subsidies as well; but that is for another topic). I thought that this was the beauty of a competitive and deregulated markets. I for certain hope that other airlines will file a lawsuit against such stupid move.

davidjohnson6 wrote:
Ryanair and Wizz are the likely losers here. I think non-monopoly routes will not move to Bratislava; VIE has good roads and public transport to Vienna city but BTS does not. Vienna has a much larger and richer population than Bratislava and is a much greater tourist draw.


David, I am not sure if you have had chance to travel from BTS to VIE (city centers), but public transport option is more than sufficient. Directly from the airport, you have an option to take buses (SlovakLines - offering also express services; about 40 minutes), FlexiBus, etc.). From the main bus station (which is accessible by regular mass transport; your options increase), and from two train stations you can take multiple trains to Vienna (during rush hour almost at 30 minute intervals; again to city center). If demand increases, I am certain that market participants will react. Train station at BTS should have been constructed years ago, but oh well.

I do concur that purchasing power is significantly lower, but people do travel (for a right price). And, you can not compare BTS to VIE in terms of tourism. Yes, BTS has its important place in history, but it does not offer as much as VIE (BTS was a coronation town of Austrian Empire and the seat of kings for several decades).

If tickets remain to be cheap, I am sure that even people from VIE will seriously consider flying out of BTS (as people from BTS, and greater Slovakia had done for years). Any PR campaign will eventually make it possible.

I think that BTS can handle some traffic from VIE, but not all (LCC). This is mainly due to limited apron size and general infrastructure at the airport. I am not sure how capable are its ground handling, and ability to serve several arrivals at the same time. This is more prohibitive than connectivity. There are about 13 stands that can handle B738/A321 size planes. Will this be sufficient to replace LCC operations from VIE?

In the past, RYR threatened to close its base in VIE. But after some negotiations, it actually expanded its operations. I believe that this is a hot air from the politicians. No sane politician (that wants to be re-elected) will do something that it hurts him (such as loss of jobs). It will fight to provide support and money to AUA and keep RYR happy.
 
SurlyBonds
Posts: 383
Joined: Mon Nov 02, 2015 10:24 am

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 6:37 am

PM wrote:
Things are changing. "Normal" isn't going to come back.


That is not what data from China indicates. In China, according to what I've heard, domestic air travel is at 90% of pre-lockdown levels.
 
Toinou
Posts: 254
Joined: Sun Apr 14, 2019 8:21 am

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 6:42 am

Contrary to many people here, I think the Austrian government got a good idea on how to implement that. Not being allowed to sell below tax price (ie not being allowed to sell at a loss) can be put as a pure ban of unfair competition, something that EU usually mostly support. (The same reason may prevent airlines from selling the return to nothing in compensation.)
Whether most people here like it or not, air ticket taxes will become a reality in Europe in coming years, whatever method is used to design it.

Blerg wrote:
Is the railway system really that competitive in Europe? I remember some years ago I had to travel to northern Netherlands (Franker) and then to the south (Maastricht). Both times I flew into AMS from where I took a train to my final destination. Personally, it was horrible with so many stops, change of trains and so on. Another time I had to go to Odense from Copenhagen but the train was so expensive that I ended up taking one of those car sharing rides. All in all, trains might be an option for many Europeans but outside some busy markets is it really the cheapest or most convenient so as to displace aviation in many instances?


It really depend of what metric you use to assess how "competitive" it is.
Contrary to what you say, it frequently is a rather interesting option for secondary markets as those rarely have good air links. Smaller cities mostly have no airport or one with few links just to major hub(s). It means for most trip you will either have to connect or take a land transport to reach your destination. So taking the train all the way may not be much more of a hassle.
You can add one factor : many people in Europe consider planes and airports to be very unpleasant places and are ready to admit longer journeys to avoid them. This is also a form of convenience.
For those people, one aspect is that plane tickets are sometimes significantly cheaper, so a tax may be the factor that will balance things enough for them to chose to go by train.
 
Blerg
Posts: 3958
Joined: Tue Jan 09, 2018 11:42 am

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 6:51 am

Does it mean OS will discontinue VIE-BUD since a train takes 02.37.
 
User avatar
PM
Posts: 5259
Joined: Wed Feb 09, 2005 5:05 pm

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 7:06 am

SurlyBonds wrote:
PM wrote:
Things are changing. "Normal" isn't going to come back.


That is not what data from China indicates. In China, according to what I've heard, domestic air travel is at 90% of pre-lockdown levels.

China is hardly in the vanguard of trying to address the climate emergency. I'm thinking more of European governments.
 
GLANKG
Posts: 102
Joined: Fri Feb 02, 2018 9:19 am

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 7:13 am

Anti-dumping regulation aside, Austria introduced a 12 EUR flight tax immediately, and a 30 EUR tax for short flights.
AUA flies around 150 weekly flights to destinations within 350 km,
GRZ
SZG
KLU
PRG
BUD
KSC
KRK
ZAG
If OS drops many of those flights in favour of trains as they currently do with LNZ - VIE on ÖBB, with the Lufthansa guarantee of VIE grows in line with FRA/MUC, unless FRA/MUC drops routes, OS will have to add capacity somewhere else.
Last edited by GLANKG on Tue Jun 09, 2020 7:19 am, edited 1 time in total.
 
davidjohnson6
Posts: 796
Joined: Mon Jun 20, 2016 10:10 pm

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 7:17 am

There is public transport between BTS and Vienna city centre - but compared to that between VIE and Vienna, it takes much longer, frequency is lower, and early morning/late evening the difference becomes more obvious. Then again Vienna to VIE is about 25km while Vienna to BTS is about 85km, so impossible to have equality

Ryanair has been trying to promote BTS as the alternative to VIE for well over 10 years. It has some routes, but it never really made much impact on the Vienna market. Every time I flew Ryanair between London and Bratislava, passengers were speaking Slovak or English and not German.

Going slightly off topic, anyone have thoughts about the future of Klagenfurt airport ? It is very dependent on the KLU-VIE route which wIll attract *much* more tax soon. The train from Klagenfurt centre to Vienna centre is about 4 hours... wonder if the price increase will push passengers not connecting to another flight to choose plane instead of train which may make KLU unsustainable and leave Graz airport as the sole passenger airport in southern Austria
Last edited by davidjohnson6 on Tue Jun 09, 2020 7:32 am, edited 2 times in total.
 
VSMUT
Posts: 4204
Joined: Mon Aug 08, 2016 11:40 am

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 7:26 am

I for one think it makes good sense, and should be spread out to more of Europe. End the pointless short flights, stimulate growth in high speed rail.


andrej wrote:
Lovely protectionism at work. When airlines in Europe region folded, it was a fair market competition, and no governmental support was allowed. Now, as major players are at risk, it is hidden in form of Corona aid. Airlines (namely Lufthansa Group in this case) generated profits for years. It should be company's responsibility to preserve buffer for bad times. When it is not able, due to unprecedented circumstances, it should receive governmental guaranteed loans. Not hand outs and only when business has a solid plan. Austrian has been weak part of the group for years. If Austrian is not able to survive, let it be. Ryanair, WizzAir, and certainly other airlines are ready to step in.


Protectionism how? I am willing to bet that the market for sub-350 km flights are dominated by the legacy airlines, not the low cost carriers. A quick look at Wikipedia suggests the same.


andrej wrote:
Minimum ticket price is some freaky wet dream of the Greens. If RYR can generate profit at its pricing levels, then let them thrive (they should not be given any subsidies as well; but that is for another topic). I thought that this was the beauty of a competitive and deregulated markets. I for certain hope that other airlines will file a lawsuit against such stupid move.


Reality is that aviation is unsustainable, it needs to be reduced. The Greens at least have the sense to focus on flights so short that they can easily be replaced with alternatives. Cutting short flights provides some of the respite needed to sustain those that can't easily be replaced. And face it, nobody likes being squashed into a turboprop or CRJ for a ridiculous 30 minute flight. It's a win-win situation.
 
GLANKG
Posts: 102
Joined: Fri Feb 02, 2018 9:19 am

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 7:30 am

In addition to 450 million state aid and 150 million LHG injection, OS saved 300 million EUR from employees contribution and 150 million from suppliers. OS's first quarter operating loss is 197 million. The 300 million loan is 6 years term, OS will become state owned in the event of none repayment.
 
FlyingHollander
Posts: 429
Joined: Sun Jul 31, 2011 3:50 pm

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 7:46 am

Blerg wrote:
Is the railway system really that competitive in Europe? I remember some years ago I had to travel to northern Netherlands (Franker) and then to the south (Maastricht). Both times I flew into AMS from where I took a train to my final destination. Personally, it was horrible with so many stops, change of trains and so on.

Why are you judging rail's competitiveness by a journey to a small town (12.000), in a rural province, awkwardly situated on the opposite side of a large lake? And if you do think this is a representative route the train (or car if including that) is the clear winner as you'll be waiting a long time to get a plane to Franeker or anywhere in Friesland...

In regards to plane vs train, routes between major cities within about 600km is what we should be looking at. When high-speed links are available, they are used and often the preferred method of travel for O&D. Just look at routes like LON-PAR/BRU, AMS-BRU-PAR, MAD-BCN, DUS-CGN-FRA etc. Trains can definitely gain market share on other similar routes if infrastructure were to be built. Encouraging this by making airlines ask at least cost price for tickets seems fair to me.
If it ain't Dutch, it ain't much.
 
User avatar
TheFlyingDisk
Posts: 2049
Joined: Mon Jun 09, 2008 12:43 pm

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 7:50 am

Wouldn't LCCs earn more by having a minimum fare, logically speaking.
I FLY KLM+ALASKA+QATAR+MALAYSIA+AIRASIA+MALINDO
 
lhrnue
Posts: 365
Joined: Sat Jun 05, 2010 2:47 pm

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 7:52 am

Surely setting a minimum price which is equal to the minimum tax can't be anti competitive.
 
GLANKG
Posts: 102
Joined: Fri Feb 02, 2018 9:19 am

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 8:16 am

VSMUT wrote:
I for one think it makes good sense, and should be spread out to more of Europe. End the pointless short flights, stimulate growth in high speed rail.


It's hard to foresee if anti-dumping regulation will be applied across EU, different countries have kind of different politics. I do think Austria has another very good example of transport that some others should probably follow, Vienna's well-run public transport system that sells annual pass at 1 EUR per day, it's less than half of the price in Berlin/Hamburg/Munich, and half of the population have one, the share of public transport use in all journeys is significantly larger than German cities. There were quite same media attention from time to time (BBC, Guardian, etc.) but it hasn't been really replicated.

Coincidentally at the same time with AUA bailout Austria also announced the rolling out of the "1-2-3-Ticket" (all public transport within Austria would be 3 EUR per day in 2021, cross one state border 2 EUR per day, 1 EUR within state), that's a lot cheaper than current ÖBB annual pass rate, OS still has a sizable GRZ/KLU/SZG flying, how many would still choose flight over train then?

P.S. the infrastructure minister behind the plan is also from Green party.
Last edited by GLANKG on Tue Jun 09, 2020 8:16 am, edited 1 time in total.
 
SueD
Posts: 233
Joined: Sat Jul 27, 2019 11:35 am

Re: Austria to introduce minimum price for plane tickets

Tue Jun 09, 2020 8:16 am

OSL777FLYER wrote:
This is nonsense form the Green Party of Austria.

This will benefit Bratislava. LH might not want to continue with the OS brand. And people will not want to travel to Vienna for a weekend getaway.

LCC's will definitely go for Bratislava as far as Vienna goes.

With regards to other destinations such as Innsbruck and Salzburg, people might choose to go elsewhere.

Just wait until hotels, restaurants etc. start to complain due to lack of customers and income..........As COVID-19 was not enough.


The vast majority of seasonal traffic to Innsbruck, Salzburg , Linz and Graz are inclusive tour package type holidays and an extra €10-30 would be concealed in the overall price with little effect imho.

Whilst Linz and Graz schedules have already been well and truly dismantled by LH Group today.

If Austria apply a scheme based on something close to the U.K. ADP model the 350 km radius pricing structures makes the shorter routings pretty expensive anyway.

That said ground travel times within Austria and to neighbouring countries even East to West within the borders can be pretty long !

Its 4 ½ hours by train from Vienna to Munch while Vienna to Milan takes about 14 hours ( change in Switzerland) and Vienna to Berlin about 9 hours , even Vienna to Zurich is the best part of 8 hours .

Yes trains in Europe are all TGVs ( myth !) - Much of the European rail network is conventional at top speeds more closely to the 100 to 150 Kms range. Even those classy ICE trains in Germany spend much of their time on the conventional network .

Might seem a small and central country on a typical map however geographical and geological elements can make for ground travel difficulties and well somewhat time consuming- Oh and Vienna is right at the wrong end of the country when it comes to the rest of the EU .

Air travel from and to Vienna is the only viable way of doing business imho.

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos