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Has It Felt Like Airfares Are Much More Expensive? That’s Because They Are

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.

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  1. You are correct, capacity is one reason. One other issue that I hear from CO folks is that their revenues have no pun intended “sky” rocketed since they switched from Skyteam to Star Alliance. Better connectivity and more options made CO a more popular choice Trans Atlantic than when aligned with Skyteam.

    • The Star Alliance connection is a great point I hadn’t thought of – considering all of the international traffic that is generating, that could certainly have a large impact. Thanks for that…

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