Flummoxed that air travel remains cheaper than rail travel in many shorthaul markets, some German politicians want to place punitive tariffs on cheap flights.
Alexander Dobrindt, leader of the Christian Social Union (CSU), a party that is part of Germany’s center-right governing coalition, wants a price floor.
I want climate protection instead of predatory pricing. Nine euro tickets for flights within Europe have nothing to do with market economics or climate protection. There needs to be a minimum flight price and rail journeys need a VAT cut.
On the one hand, this idea makes a lot more sense than taxing prices based upon distance or whether in the EU or outside the EU. Sure, the longer flight, the more carbon emissions. But think about it: what are the alternatives to flying across oceans and continents? If there is going to be punitive taxes, shouldn’t those fall on the sort of shorthaul routes in which rail and bus travel is actually a viable alternative? In that sense, Dobrindt’s idea is not so far-fetched if the German government sees discouraging shorthaul air travel or promoting Deutsche Bahn (the rail system) as a policy goal.
But on the other hand, can you imagine the public outcry? The headlines of out-of-touch leaders aiming to exclude the poor and middle class from air travel? As Germany faces economic uncertainty and potential recession, perhaps raising airfare prices and hurting airlines and the commerce such airlines foster is precisely the wrong recipe at this time.
The CSU is a conservative party. Of course conservative means different things across the Atlantic and in the era of Trump, but the party and certainly the governing coalition with Angela Merkel’s Christian Democratic Union (CDU) has generally stood for lower taxes. The VAT cut seems more in-line with party policies than a price floor on budget airlines.
CONCLUSION
I find the concept of a price floor on airline tickets an interesting one. I’m not in favor, but I do think it makes more sense than taxing longhaul flights…
What are your thoughts on mandatory minimum pricing for airline tickets?
I think this idea won’t fly (pun intended). Not only because the type of flights that often get these super low fares are not routes you could do by train. For example I’ve used Ryanair flights between UK and Spain in the past that were under 10 gbp, no viable alternative available. So putting a price floor there will do exactly as you say, create outrage that poor people shouldn’t fly.
Looking at this at an airline level also becomes tricky. Would you penalise LH from offering FRA-DUS (generally easily doable by train)? But in doing so you essentially make it harder for LH to compete on for example DUS-NYC when they have to offer a train connection to FRA when BA could offer DUS-LHR-JFK and allowing the traveler airport parking etc. at their local airport. Not sure that’s fair either.
Very tricky topic. Do you basically prohibit fares maybe then for DUS-FRA but not for DUS-FRA-Beyond? As those O&D passenger COULD use the train?
Very interesting discussion over a pint in the pub I think. The answers though I think are totally up in the air 🙂
Stupid logic. Make train travel more enjoyable if you cannot go cheaper. Eg.: Trains station is not as hectic as airport. Train seats more comforting than plane seats, etc.
Maybe he had another agenda regarding this issue. But the way he conveyed the idea, just plain stupid.
Train travel is more enjoyable than air travel, and by far too. I travel from Munich to Salzburg and Graz regularly. The standard seats are exponentially more comfortable, larger, and more legroom. I can’t speak for every line in Germany or Austria but air travel is nowhere near as comfortable as the ÖBB (Austrian Rail).
Duh!
James, have you compared train vs rail travel in Germany?
Most routes that we are discussing are run via ICE trains, the Siemens versions. The ride, the seats, the service and the stations are superior to any class of air travel.
I find travel by train in Europe infinitely more enjoyable than air: convenient, easy access, no real luggage constraints, not weather dependent, reliable, safe, comfortable, relaxing, (relatively) cheap.
It’s a dumb idea that benefits no one (except the government). The minimum (or, for that matter, maximum) price should be determined by the market. If the airlines want to GIVE the tickets away, fine. If people are willing to pay 5000 euros, fine. Government has a role in keeping the free market safe, in keeping the participants honest, in punishing dishonest behavior, but not in imposing its will on the economics of the market.
The whole focus on commercial aviation needs to change – cruises, SUV’s, imported fruit, etc all have a similar impact. And then let’s get into private jets and motor yachts, after that we can come back to commercial aviation.
Agreed ships have a HUGE impact yet somehow we don’t talk about as you say cruises, imported produce (out of season fruit/veg etc.) and I think THAT is something they should be focusing on. I rather not have strawberries available year round over futile taxes that just end up costing everyone more but the impact on the environment doesn’t change. Just our wallets change.
This has nothing to do with the environment or climate change. The CSU is the Bavarian sister party of the CDU, Munich is lufthansa’s second major hub, but with the spat with Frankfurt it could possibly become the main one one day. The link between his comments and the CEO’s are very real, he’s basically echoing him. This is lufthansa lobbying pure and simple.
The German government has a long history in protecting lufthansa, the last major incident of it had AirBnb as a casualty.
AirBerlin… silly autocorrect
Why not spend some effort to make rail prices more affordable?
Since the demise of AirBerlin, ticket prices in for intra-Germany have increased, not decreased. Yes, EasyJet and Ryanair have put some pressure on Lufthansa (and Eurowings), but not near enough. Try getting an inexpensive long-haul flight out of Berlin.
Completely agree with Adrian (above). This is just pandering to Lufthansa — an airline I actually like, but one that sometimes has a weird concept of what we in Germany would really like to have.