Dear Alex,
Why is it that Europe, and the UK in particular, is awash with dozens of charter airlines of various sizes while the US has hardly any? USA3000, Omni and Ryan are the only ones I’m aware of and these are very small. Do Europeans and Brits go on holiday more enthusiastically than the Yanks? Or is it down to government regulation or lack thereof?
Rick Sanfilippo, New York
Alex replies:
You raise an interesting question, but one that’s not easy to explain. To state the obvious first, most travel in Europe is international whereas in the US it is mostly domestic, and in addition, air travel was always more popular in the UK rather than mainland Europe because we are an island. Overland travel to holiday sunspots takes much longer (two or three days by train from London to Malaga compared with 150 minutes by air) and costs more. That’s why the UK has more charter carriers than the rest of Europe.
Before the arrival of EU liberalisation 15 to 25 years ago, inter-European scheduled flights were costly because, being international, they were restrictive. Tariffs were controlled by the trade body IATA (International Air Transport Association) or individual governments. Fares were kept high because little competition was permitted. The big national airlines, many of whom were state-owned, had no incentive to change the system, and so charter flights were the alternative.
It was very different in the US. Even before tariff deregulation in the late 1970s, US domestic fares were good value because airlines were competing with one another in a single market.
Because their flights formed part of a package holiday, Europe’s charter airlines avoided the restrictions applicable to scheduled aviation. They were also highly efficient. They brought down the cost of package holidays, making them affordable to all.
In recent years, a more affluent market here began switching from packages to “do-it-yourself” holidays, so charter lost out to scheduled. But as the recession bites we see charters and package holidays coming back into favour. A package holiday allows travellers to budget in advance, and also provides bonding against airline failure, which is important in these uncertain times.
