If you think plane tickets in America are bad, maybe you should move to Europe. Recently in Europe there has been a decline in Airline prices. This is due to the large number of charter companies.
Recently I read an article in Der Spiegel, in which a reporter for Der Spiegel interviewed the CEO of Lufthansa, Christoph Franz. In the article Franz explained why the prices for the large airline company will be falling. Due to the increase in charter companies and the cheap tickets they can offer, the large Airline Company will have to change their entire business model and entire price structure. Franz also went on to say, “The Budget airlines actually grew less in 2010 than we (Lufthansa) did.”
After reading this article, I did some digging around and found out that ever since the introduction of charter airlines here in America, most charter companies flopped and went bankrupt. However, the market of charter companies in Europe exploded. This is due to the fact that Europeans love to travel. In Europe it is far cheaper to take a charter flight from Point A to Point B. One of the largest charter companies is GermanWings. Who ironically is a subsidiary of Lufthansa.
While reading around on the internet I found a post on Eddy’s Blog. In the post he talks about how the large airline companies are having to downsize due to the sudden influx of charter companies, which can out price and out sell the larger companies. He then goes on to say that because there are so many charter companies that, unlike the larger companies, can fly to the smaller cities as well as the larger cities. This will eventually drive the prices of the larger companies down to what the charter companies charge for plane tickets. Which after all wouldn’t be a bad thing if you think about it, right?