Current Affairs Air Wars - the price battle between low-cost airlines in Prague
As the Czech tourist industry grows more successful by the year, the air transport business is likewise becoming all the more lucrative. Low-cost airlines are now operating from Prague International Airport in increasing numbers, and with this rise in popularity comes the inevitable competition for customers, with companies drastically reducing air ticket prices in an attempt to entice clients to their airlines. Chris Jarrett takes a closer look at Prague's airfare battle.
Photo: European Commission
On February the 14th of this year, another low-cost airline landed on the
Czech market, as SkyEurope established a base at Prague Ruzyne Airport,
making it the third air carrier to do so, along with the flagship company
Czech Airlines and Smart Wings, the Czech low cost airline. Now, as other
low-fare carriers react to the arrival of SkyEurope with reductions in
ticket prices, a battle for clients is getting underway. Smart Wings last
month announced plans to cut prices of flights from Prague to Amsterdam,
Barcelona, Milan, Paris and Rome from the original 990 crowns to a mere
190, a reduction of over 80 percent. And now further airlines operating in
the Czech Republic, such as Air France and GermanWings, are planning
similar measures. The Managing Director of the Czech department of Air
France, Ludovic Froidure, said this of imminent plans in response to the
price battle:
Ludovic Froidure
"Basically Air France has taken a new look at reviewing its pricing.
We are currently offering the lowest fare based on the earlier you book
the best fare you can find. You know today we are offering 2000 crowns as
the lowest price every day and clients are somehow used to booking a long
time in advance. We will look at the price war between Smart Wings and
SkyEurope and maybe we will adapt our pricing strategy, if it is
necessary, to Paris. We are looking at low-cost flights with very high
consideration but at the same time we also have to manage not just the
Paris lines but on a worldwide network as well."
The radical reductions in price could have a significant impact on the airline business in the future however. Froidure explains why:
Prague Ruzyne Airport
"Generally, it will perhaps push people to travel more, but one
impact that we can imagine is that the prices will go down. The airlines
are already losing a lot of money and low-costs are part of that. And at
the end of the day, if you are reducing your price but petrol costs are
increasing or doubling in 2 years, then we are facing a considerable
issue."
Indeed the increase in popularity of Czech air travel could have other effects. The capacity of Prague Ruzyne Airport has been reaching its limits in the past few years, and further development will have to be considered in the future to cope with increased air traffic. Besides the recently constructed North 2 Terminal, there are plans to add a new 3.5 km runway, which will lie 1.5 km south-east of the main runway. At an estimated cost of 5-7 billion crowns, we can only wait and see what future effect this has on Prague's air wars.
