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Airline Competition Grows, Prices Become More Expensive?

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May 18, 2008

Statistics Finland finds that prices of domestic airline tickets continue to rise despite increased competition. Blue1 says competition on the domestic market is poor; Finnair disagrees.

Finnair's challenger Blue1, which flies to five Finnish cities, says competition is only present on the routes flown by Blue1. The airline says it has brought competition, at least to some degree, to the domestic airline market:

"In taking into account all tickets, real prices sank at least in the areas in which Blue1 brought competition," says Tom Christides, Corporate Communications VP at Blue 1.

Statistics Finland reports that domestic flights in Finland are now nearly 40 percent more expensive than they were at the start of the decade. Airlines say the hike stems from higher fuel costs. The same petrol is, however, used aboard international flights -- the prices of which have gone down by some 20 percent.

Finnish national airline Finnair meanwhile maintains that domestic competition is fierce. Sakari Romu of Finnair says ticket prices have gone up by less than one-tenth during the past five years.

These days, high-speed trains and car travel are the airliners' staunchest competition.

Airline Competition Grows, Prices Become More Expensive?

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