A quick tidbit from Continental’s earnings report:
Anyone who has looked at buying a ticket to Europe has likely had a bit of sticker shock lately, with memories of $500 summer tickets fading deep into the past. Continental’s earnings report gives the details: After decreasing European capacity by about 6%, it saw passenger yields (roughly a measure of average fare) rise almost 26% on flights between North America and Europe between Q2 last year and Q2 this year. Domestic yield is up about 13%.
Last summer was certainly an anomaly, with fares way below anything we had seen in a long time. But being able to increase fares by a quarter in a just a year shows how much pent-up demand there was, as well as the power of taking seats out of the market.