Airline pricing "astonishing" says LCY's boss

13 May 2009 by BusinessTraveller

Airlines are “sailing close to the wind” in the way they present their fare prices, according to Richard Gooding, CEO of London City Airport. He quoted one example of a fare advertised at £2.49 but which came to £93 when taxes and other charges were added.

Mr Gooding said he found it “astonishing” the way airlines presented their fares in the way they do. Gooding compared it unfavourably with how a shop gave the price of an item and its delivery with no extras, while airlines simply gave the basic fare.

“Do airlines know they are misleading the consumer who wants to know what the cost is. It is quite hard to find out.

“It seems to me that airlines are sailing close to the wind and that Brussels might be taking a look at what they are doing,” said Gooding.

Gooding was speaking at a forum in London yesterday (May 12) jointly organised by Management Solutions UK and the Association of Corporate Travel Executives and attended by 95 delegates.

He said that airports were faced with either having to cut costs or charge fees to survive. Gooding cited Luton Airport which was now “unbundling” its product and charging £1 for drop offs.

he said airports “worked well” in growing markets but currently there had been two successive years of decline – unprecedented since the last world war – and was now moving into uncharted waters.

“I think we are going to see a lot of airport ownership changes, driven by the situation we are in,” said Gooding. Two UK airports, Coventry and Bristol are already up for sale.

Mr Gooding said his airlines at London City were already asking for the fees to be sliced up, so that they knew how much they paid for baggage handling or electricity.”

But Titus Johnson, UK and Ireland manager for Air Berlin, said his carrier was a “strong advocate of a bundled programme.” He said it believed in a full product and full service adding that customers wanted “certainty, service and simplicity.”

Mr Johnson said the market seemed to be going to extremes with at one end some airlines charging for everything which “adds to the bureaucracy.”

But he pointed out that carriers in emerging economies like Brazil and India were behaving in the opposite way with fares covering services and handling.

Report by Stanley Slaughter

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