Low price entrants could make Czech market more competitive

Published: 8/25/1999

On August 13th 1999, Go, a subsidiary of British Airways targeting the lower end of the market, announced that it is expanding its network to include a Prague-London route. When the service starts on September 23rd, it will consist of one flight daily between Prague's Ruzyne airport and London Stansted. The British airline is banking on the incentive of a 5,000 Kc ($147) weekend round-trip ticket to win substantial custom. According to David Magliano, head of public relations at Go: "That's just over half of British Midland's fare" . A return ticket from British Midland currently costs about 9,600 Kc. Toby Nichol, a spokeman for British Midland, said that the airline “always welcomes competition," the He added: "But we offer very different services. And it [Go] flies to a different airport -Stansted. We fly to Heathrow." Nichol ruled out the possibility that British Midland would react to Go by cutting fares. Other competitors have, however, taken note. Czech airlines (CSA) hinted that Go could spark a fare war. Jan Bartak, Director of CSA's public relations department, said that the company is " ready to react ... to any possible introduction of Go company operations - especially in regard to price policy". For now, it looks as if Go intends to attract more expats than locals. According to Wendy Walker, spokewoman for Go: "We didn't know how the native Czech would react to ticketless booking, online booking and dealing only in English over the phone". Local tourist industry insiders agree that the cut-price fares would probably not appeal to their compatriots. Ondrej Dubovsky, a Prague tour operator, said the company'scredit card-only booking method could put the service out of reach of many Czechs interested in using it, while native Praguers who actually own an international credit card may look down their noses at Go. "Any kind of plastic and we are talking about businesspeople. These people won't fly budget," Dubovsky said. He conceded, however, that: "There will be general interest. British people won't mind flying budget." Others remain doubtful that the low prices will result in plane loads of hedonistic young tourists arriving with hard currency to spend on Bohemian lager. Daniel Mourek, Manager of market research at the Czech Tourist Authority, observed that: "European cities like Prague and Amsterdam attract young people for various reasons. It's not possible to characterise [tourists] by price".

Article ID: 780