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Ticket prices set to soar as airlines chase profits
Published: 14 Aug 12 08:53 CET | Print version
Online: http://www.thelocal.de/money/20120814-44341.html
The days of really cheap air travel are numbered, Germany’s air travel industry association has warned, saying that airlines needed to increase their profits to remain solvent.
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“The average profit must increase if we want to have solvent airlines in the future,” he said.
Lufthansa and Air Berlin, the two biggest German airlines are both having difficulty, and are struggling to reduce their costs. Lufthansa made a loss of €168 million in the first half of this year, while Air Berlin was €66 million in the red in the second quarter of the year.
Lufthansa ticket prices are already starting to take off, as evidenced in a letter to investors saying that the price situation was “continuing to develop positively” in July. A spokesman suggested that prices had been rising for years. “Flying is becoming more expensive,” he said.
Siegloch complained that German airlines and airports were being burdened with increasing costs which were particular to them and not seen elsewhere. Airline passengers have to pay a ticket tax since the start of last year – currently that adds €7.50 to each trip.
He called for this tax to be scrapped. The state “should not artificially make the situation more difficult for domestic companies,” he said.
High fuel costs were also making it difficult to keep prices low, he said.
The situation at Germany’s airports was also tricky, with just six of the 22 making a profit, he said. Those near the borders were suffering in particular as passengers were opting to travel from foreign airports to avoid the ticket tax, he suggested.
DAPD/The Local/hc
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Your comments about this article:
I live near some of those border airports, like Düsseldorf, Weeze ect. It's at least half an hour more to drive to the nearest airport over the border and my car goes through more costs in fuel than the 7 bucks I could save.
It has probably nothing to do with the fact that the flights are much cheaper there, but hey, let's blame it on some tax.
I am not sure if Mr. Klaus-Peter Siegloch masters the financial concepts. Solvency has little to do with profit, but with cash-flow. If you have a profit, as little as it can be, but a good cash-flow, then you are never in peril of insolvency. I guess that what he meant is that the airlines should be(come) profitable, not that the average profit must be increased.