Airline tickets

With the semester in Hong Kong nearing its end, it is high time to book a ticket back home. My reluctance to book earlier has been due to a preconceived idea of tying my travel plans to the outcome of my internship applications; hence if I didn't get an internship, I could stay longer in South East Asia, perhaps visit friends on the way back to Europe (say, in Mumbai), or even extend my travels to new locations. If I did get an internship, well then I would just fly directly there. But with no news from the Western front, and more school work due in June, I decided that it would be best going back to Denmark.

Booking intercontinental airline tickets some 3 weeks in advance is generally not considered a great idea. I flew out to Hong Kong with Finnair, via Helsinki, for a total travel time of around 15 hours. Having booked 3 months early, and travelling on a youth ticket, it cost me 3.125 DKK. The same ticket today, one-way, will cost +16.000 DKK.

Being a student and strapped for cash, I was simply looking for the cheapest option. Online comparison sites, such as momondo.com, are ingenious for comprehensive searches, and have frequently been used during my travels around Asia. Although the Asia market is more regulated and less open than the European one, prices have generally been similar. As a result, it looked like my indecision was going to have a pricey cost. Fortunately that was not the case. I booked my ticket back to Denmark on May 21st with Aeroflot, one stop via Moscow, with travel time around 15 hours. Price: 525 USD, or less than 3.000 DKK.

In the age of the internet, it is still incredible that such price discrepancies exist. The European aviation industry has gone from being a highly regulated, monopolistic market to an open, deregulated market. The increased European integration has resulted in increased competition; the former incumbents (known as flag-carriers due to their strong ties with national governments) are being challenged by a wave of lost cost carriers such as Ryanair. The incumbents would previously receive favourable spots at national airports, quasi-monopolistic markets, and international protection, in return for essentially doing the governments bidding, such as excessive hiring and corporate social responsibility. The flag carriers (such as British Airways, SAS, KLM, Lufthansa, etc) are still suffering from the rapid liberalization through the 90's with their ineffective cost structures, and are trying to retain customers by creating global alliances (such as STAR alliance) and by offering frequent flyer miles (which are essentially a switching cost). They also pride themselves with better service, greater convenience, and higher safety. Perhaps, but at a price that is over 5 times higher than a competitor? I think not.