50 Pence to Germany

[ORAC]

BBC- Wednesday, 29 January - Air fares slashed in price war.
Ryanair is competing with a new no-frills rival.

Fares between Britain and Germany have been cut to £1 or less as a new no-frills airline and Ryanair try to win customers by outdoing each other on price.

Germanwings began selling tickets between London's Stansted airport and Cologne for £1 ($1.64), including all the taxes, on Wednesday morning. But as soon as Ryanair heard about the fares it promptly cut the price of its own tickets between Stansted and Frankfurt Hahn to just 50 pence.

The airlines will actually lose money on each seat they sell because they are bearing the cost of the taxes themselves rather than charging passengers.

"Traditionally the no-frills airline have worked out that they can actually and rationally carry a passenger for just one pound, but only if all the marginal costs, anything from air passenger duty to the passenger service charge are actually added," said the Independent's travel editor Simon Calder. "Typically a £1 fare becomes about 15 quid once all the extras are added."

As well as bearing the cost of extra charges, Germanwings has gone one step further by offering the low fares on all flights - including popular weekend trips.

The new no-frills airline is part-owned by Lufthansa.

[Squawk7777]

I guess you can call it the civil version of "the battle of Britain" :rolleyes: :D

[cwatters]

...and the tax works out at approx 1800% last time I did the sums.

I flew Ryan air from Brussels to Stansted and back recently for £1 + tax and was quite impressed. We were on schedule both ways (eg 10 mins early) despite having to stop for deice on the way out.

Cabin staff were kept busy when a large group decided to buy train tickets into London on the plane using about 6 different credit cards.

Stewardess wouldn't start the safety briefing until everyone had stopped talking!

[Press Button B]

Will we soon see 'Below cost selling', 'Predatory Pricing' and 'EU Commission' in the same sentence?

Now EW against FR but maybe BA or LH might care to take FR to court over abusing an increasingly dominant position... :)

[Dewdrop]

Boy ! Its a sign of the times when BA regards FR as a dominant rival. BA should stop carping and realise business has to be won.

[Evanelpus]

More to the point, when will we see the day where airlines will pay you to travel....aahhhh, dream on.

[brabazon]

Unlike Simon Calder I did find some 50p flights for a Wednesday in March, bizarrely these fares are inclusive of all charges and taxes, including APD - that is a bargain!!!

[stormin norman]

50p x 150= £75 - fuel, 2 tonnes @ £200 - Aircraft operating costs of £1200 Per hour x 1.5 = -£2125 And these guys make a profit.
Fantastic ,they can come and run my business anytime!

[brabazon]

Stormin Norman

Try your sums again. They're not offering every seat at those prices, hence the difficulty of finding them. The trick is to sell enough that you don't fall foul of advertising standards - they even define the number of seats available - and then sell the others at higher fares.

Their average fare per passenger is around £30, with an 80% load factor on a 189 seat 737-800 that's £4536 in revenue from the passengers. Throw in some on-board sales, commissions from hotels, car hires etc etc and you're on for profit!!