Now there are record cheap airline tickets. You may want to think about booking a summer holiday right now, warns flight analysts.
Many used the autumn holidays to travel. After a year of little traffic and restrictions, traffic has exploded after the summer compared to earlier in the year.
Avinor can report that during the first autumn holiday week alone, more than 730,000 had packed their suitcases and turned their noses towards the airport. Part of the reason may be the cheap ticket prices, but many people probably feel a little travel fever after months in the country.
In week 40, Avinor registered -57 percent of the number of travelers abroad in relation to pandemic holidays in 2019. At the start of the pandemic, traffic was 90 percent below what it was before the pandemic, so the arrow points upwards.
Price war about customers
Aviation analyst at Winair AS, Hans-Jørgen Elnæs, tells Nettavisen that it is not only leisure travel that has been less of during the pandemic, but also business travel – naturally enough. But now it has turned on many fronts.
He points out that one has seen a change after things started to open up again after the summer.
– Firstly, the aviation industry has been through a tough time. Norwegian has been reconstructed and has had its debt cut to almost zero, says Elnæs.
He also mentions the relatively new airline, Flyr:
– They also have a very low cost of operation. This allows them to offer cheaper rates. SAS, on the other hand, is more expensive to operate and tries to avoid selling tickets at too low a price, says the aircraft analyst.
– The second is that the companies have adjusted prices after the pandemic. They want us to travel more again. That’s why they offer cheap tickets, he explains.
In other words: If the airlines are to get customers to fly with them, they must be able to tempt with cheap ticket prices. As the number of flights has been stagnant for a long time, it is now a matter of concern for customers.
Airlines that offer travel abroad in Norway offer regular low-cost tickets during the day. A check Flysmart24 did – shows that from Gardermoen you can fly to Poland for less than 50 kroner, from Sandefjord to Gdansk or Riga for 79 kroner and to London for 119 kroner.
It has also been seen that the prices of airline tickets between the major cities in Norway have been very low. Norwegian offers airline tickets for 349 almost every day to all major Norwegian cities. The airline Flyr beats Norwegian and can offer cheap tickets for NOK 339.
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– Depending on being able to compete on price
– Since this summer, people have traveled more by plane. This has driven up demand, and the aviation market is price-sensitive, so they are dependent on being able to compete on price in order to compete for customers, says Elnæs and continues:
– Can they live with the low ticket prices in the air, one might ask. But the average ticket price to Norwegian and other low-cost airlines is not as low as one might get the impression. It is important to take that into account: The lowest price is not the norm and the average, but they must offer competitive prices, says Elnæs.
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– You should strike when there are good prices
– How long can you expect the cheap tickets to be available?
– That is the thousand kroner question. It is a balance that governs a number of things in a normal market: capacity, demand and competition between airlines. Now we will hopefully see the light at the end of the tunnel as far as the pandemic is concerned. Demand is good. It has leveled off a bit in Europe, but domestic and international flights in Norway are growing nicely, he says.
Elnæs points out that it is impossible to say exactly when prices will increase, especially since many people probably want sun and heat also in winter. If demand increases in this context, prices will also increase unless extra capacity is deployed.
He says that Norwegians have a habit of planning their summer holidays early, preferably already in December and January.
– Not all companies have their summer program ready yet, but if you can book your summer holiday already now, it can be smart. One should strike when there are good prices. When the high season approaches, you should follow, because then prices often increase, says the aviation analyst.
– It will not be 200 kroner tickets forever, he emphasizes.
New government can raise prices
In 2016, the air passenger tax was introduced, before it was removed again in 2020 at Frp’s request. Another point the aircraft analyst has is that in the outgoing Conservative, KrF-Venstre government’s budget proposal, the air passenger tax of NOK 80 has been included again.
– Say that there is an air passenger fee of 80 kroner, then it is added on top of the original price. On the other hand, I do not think that it needs to have a negative effect on demand, because there is good purchasing power in Norway, says Elnæs.
The newly formed government, which will be formally presented on Thursday, does not have much time to reach its goal with its revised budget, as well as get a majority for the content. Whether the air passenger tax will be an issue is uncertain.
The aviation analyst also has an appeal to the Støre government.
– I believe that the air passenger tax should be removed permanently, it is a purely fiscal tax that has no real influence on travel behavior or the environment, and that it makes Norwegian airlines less competitive with foreign ones, he says and continues:
– The air passenger tax should be removed permanently in the new Støre government’s 2022 state budget. It is of little use, as the Center Party proposes, to cut air ticket prices significantly on some district routes, while there is still an air passenger fee at the bottom of 80 kroner that goes straight to the state treasury. It is also not small money, 1.6 billion in income from the air passenger tax is in the Solberg government’s 2022 state budget, he says.
The Hurdal platform stated the following about the air passenger tax:
“Take the initiative to replace the current air passenger tax with a tax that has a real climate effect and a better geographical profile, so that district jobs and route offers are not unreasonably affected as they are now.”
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