The European Regions Airline Association (ERA) is warning that the dumping of airfares by certain low cost carriers (LCC) could well drive their members out of business.
The industry body said that at a time when the entire aviation sector is facing major operational challenges and exponential increases in the price of jet fuel, coupled with the challenges of post-COVID recovery, the lowering of flight costs to below operational prices was ‘irresponsible’.
“Certain LCCs lean on the practice of unbundling airfares, but for airlines with price transparency, less than €10 for a flight is business suicide,” it said, adding, “these practices create unnecessary and significant pressure and directly impact fair competition.”
ERA said this practice, particularly when carried out by airlines who have received state aid, should be investigated as a potential misuse of public funds. Defending the value of the service offered by its members, the ERA said small-to-medium sized airlines supported the regions of Europe by maximising the benefits of tourism with the creation of local jobs, the conservation of natural and cultural heritage and by providing improvements in infrastructure to benefit the regions.
ERA director general Montserrat Barriga said: “A healthy level of competition is important for our industry but eroding competitors’ margins by selling tickets at extremely low prices, even below taxes or direct costs, will gradually drive airlines out of business and ultimately reduce consumer choice and connectivity in Europe.”
She added that ERA will continue pushing for transparency on prices, and setting prices above taxes in the current discussions with the European Commission regarding the revision of the Air Services Regulation. “With the impact of the pandemic, our industry’s recovery is incredibly fragile, and it is vital that we attract new recruits to our stretched workforce. Increasing the pressure on the industry, and those working in it, is completely counterproductive.”