CUTTING air fares carries no guarantees that extra passengers will enable an airline to break even, the chief executive of Blue Islands has said.
‘There is no one-for-one direct relationship between our prices and throughput,’ Rob Veron said at a Chamber of Commerce lunch.
‘If we drop fares 10% we wouldn’t see an increase in passenger numbers by 10%.’
Mr Veron outlined the degree of losses incurred while competing on the inter-island air route with Aurigny, which Blue Islands now runs with only modest competition from franchise partner Flybe.
He said that those days had created ‘false expectations’ of price on inter-island travel.
‘The inter-island service has evolved from a small aircraft-high frequency model, which created false expectations of the Channel Islands market.
‘With seats from £25 one-way, both parties would have been losing £1m. a year.
‘Now we have moved away from that to a situation with some refinement in the market into a position with a sustainable level of supply, and a price point which mitigates loss and covers costs.
‘There is no massive profit to be made inter-island.’