news about cheap fares and airlines from travel search engine Trabber

The American economist credited with bringing about lower fares for airline passengers has died at the age of 93.

Alfred E Kahn was best known as the architect of airline deregulation in the United States, a process that started during President Carter’s administration in the late 1970s.

His reforms made it possible for budget airlines in the US, such as Southwest and Jetblue, to offer no-frills service at massively lower prices than traditional carriers.

This model has been widely copied elsewhere in the world, with the new generation no-frills low-price carriers now entrenched in Europe and Asia, as well as the US.

source: BBC News

easyJet could launch its new low-cost tour operation outside the UK in a bid to save millions in VAT. easyJet Holidays – a joint venture between easyJet and Lowcost Travel – is expected to be registered in Switzerland in a bid to sidestep VAT under the Tour Operator’s Margin Scheme.

Should the model prove successful it could pave the way for other tour operators to register overseas.

According to sources close to the deal say easyJet should save about £10 million in VAT over three years.

source: breakingtravelnews.com

German airline Lufthansa may announce takeover plans for SAS as early as the first half of 2011. Cologne-based Lufthansa is in talks with the governments of Sweden, Denmark and Norway, which own half of the unprofitable Stockholm-based carrier.

The potential acquisition would strengthen Lufthansa’s central-European dominance. It would also offer shorter polar flights from Scandinavia to Canada and northern United States.

source: swedishwire.com

As Asian economies boom, U.S. carriers are courting long-haul travelers with more frequent service, cushier seats and amenities.

In February, Delta Air Lines will begin flying between the U.S. and Tokyo’s Haneda airport, three months after Hawaiian Airlines became the first U.S. carrier to do so. Delta also plans to resume Atlanta-Shanghai service after suspending it last year, and expand flights between China and Japan. American Airlines is launching flights between New York and Haneda next month, and between Los Angeles and Shanghai in April.

The expansion comes as domestic travel begins to recover, but not as quickly as travel in Asia-Pacific. The region already passed North America last year as the largest aviation market in the world. It remains the “‘most profitable region of the world for airlines'” because of its strong economic growth, according to the International Air Transport Association, which represents 230 carriers.

source: USA Today

Some airlines’ behaviour towards passengers during the snow-disrupted Christmas getaway was ”unacceptable”, according to the Civil Aviation Authority (CAA), as passengers were misled about their rights in some cases.

During the disruption many passengers ended up sleeping in terminal buildings or making their own travel arrangements.

Under European regulations, they were entitled to various rights, even though the snow and sub-zero temperatures were beyond the control of the airlines.

These passenger rights include:

• A refund within seven days if a flight is cancelled, or
• Re-routing to their final destination at the earliest opportunity or at a later date
• Meals and refreshments if they choose to wait for the next available flight
• Hotel accommodation if this means an overnight stay
• Two telephone calls, telex or fax messages, or e-mails for those waiting for the next available flight

source: BBC

Airlines around the world face a sharp rise in the cost of buying passenger jets under new export financing rules to be discussed by government officials in Paris this week, confidential documents prepared for their meeting reveal.

The rules would mean many airlines that have long used export credit agencies to help finance some of their jets will encounter higher upfront fees.

The plan represents a victory for 24 US and European airlines that cannot get export credit agency (ECA) loan guarantees themselves because they are based in countries where the big jetmakers manufacture aircraft. The little-known agreement, called the home country rule, affects airlines based in France, the UK, Germany, Spain and the US, where either Airbus or Boeing make aircraft.

source: FT.com

Ryanair should be more like Tesco and won’t always offer the cheapest fares to consumers, its chief executive Michael O’Leary has said.

Speaking to the Irish Independent, Mr O’Leary said that there was no reason why Ryanair’s fares should always be significantly cheaper than those of rivals, but said the changes are unlikely to happen until after he leaves the airline within the next two to three years.

“‘There’s no reason why our average price should be 50pc cheaper than anybody else,'” he said. “‘I think it could easily be 25pc cheaper than everybody else, but that means a different kind of sales mission and a different kind of culture.'”

source: independent.ie

Industry association IATA on Tuesday raised its forecast for airline earnings in 2010 to a record 15.1 billion dollars, but warned that profits would slide next year.

The forecast profit marked a significant step up from the previous figure of 8.9 billion dollar in earnings expected this year.

Two-thirds of 2010’s expected profits were generated in the second quarter, the International Air Transport Association said.

Growth is largely going to come from fast-growing Asia, which will post more than half of the 2010 profit at 7.7 billion dollars.

source: AFP

Ryanair has ruled itself out of the running as a possible bidder for Virgin Atlantic.

The European low fares giant dismissed rumours that it might bid for Virgin after Sir Richard Branson’s carrier started considering possible partnership options.

“‘While Ryanair is interested in a low fares transatlantic service it has no intention of bidding for a high fares airline,’” a statement said.

source: travelweekly.co.uk

The financier, famous for betting against the pound in the 1992 fiscal crisis, has acquired a 3.4pc stake that will have cost more than £7m.

With a 3.4pc holding it is understood that Mr Soros will become Flybe‘s fourth biggest investor behind the Walker family, which owns 49pc; British Airways, which holds 15pc; and management, led by chief executive Jim French, who own 7pc.

The company is Britain’s biggest domestic airline and raised £60m by offering 20.3m shares at 295p.

source: Telegraph.co.uk