Air Wars - the price battle between low-cost airlines in Prague

As the Czech tourist industry grows more successful by the year, the air transport business is likewise becoming all the more lucrative. Low-cost airlines are now operating from Prague International Airport in increasing numbers, and with this rise in popularity comes the inevitable competition for customers, with companies drastically reducing air ticket prices in an attempt to entice clients to their airlines. Chris Jarrett takes a closer look at Prague's airfare battle.

Photo: European Commission

On February the 14th of this year, another low-cost airline landed on the Czech market, as SkyEurope established a base at Prague Ruzyne Airport, making it the third air carrier to do so, along with the flagship company Czech Airlines and Smart Wings, the Czech low cost airline. Now, as other low-fare carriers react to the arrival of SkyEurope with reductions in ticket prices, a battle for clients is getting underway. Smart Wings last month announced plans to cut prices of flights from Prague to Amsterdam, Barcelona, Milan, Paris and Rome from the original 990 crowns to a mere 190, a reduction of over 80 percent. And now further airlines operating in the Czech Republic, such as Air France and GermanWings, are planning similar measures. The Managing Director of the Czech department of Air France, Ludovic Froidure, said this of imminent plans in response to the price battle:

"Basically Air France has taken a new look at reviewing its pricing. We are currently offering the lowest fare based on the earlier you book the best fare you can find. You know today we are offering 2000 crowns as the lowest price every day and clients are somehow used to booking a long time in advance. We will look at the price war between Smart Wings and SkyEurope and maybe we will adapt our pricing strategy, if it is necessary, to Paris. We are looking at low-cost flights with very high consideration but at the same time we also have to manage not just the Paris lines but on a worldwide network as well."

The radical reductions in price could have a significant impact on the airline business in the future however. Froidure explains why:

Prague Ruzyne Airport

"Generally, it will perhaps push people to travel more, but one impact that we can imagine is that the prices will go down. The airlines are already losing a lot of money and low-costs are part of that. And at the end of the day, if you are reducing your price but petrol costs are increasing or doubling in 2 years, then we are facing a considerable issue."

Indeed the increase in popularity of Czech air travel could have other effects. The capacity of Prague Ruzyne Airport has been reaching its limits in the past few years, and further development will have to be considered in the future to cope with increased air traffic. Besides the recently constructed North 2 Terminal, there are plans to add a new 3.5 km runway, which will lie 1.5 km south-east of the main runway. At an estimated cost of 5-7 billion crowns, we can only wait and see what future effect this has on Prague's air wars.