Today is May Day, or International Workers Day as it’s known by communist sympathizers who disapprove of being referred to as communists. San Francisco’s Rainbow Grocery is closed today in honor of the occasion, and The Flight Guy will mark the day by blogging about Moscow, once the home of May Day’s wildest and craziest parties (although none quite as wild as Queen’s Day).
In yesterday’s blog I mentioned that fares to Germany are so cheap right now, that they justified flying in to a major German airport as an alternative to other nearby European cities such as Amsterdam. The same could easily be said of other popular cities, especially in Eastern Europe, such as Prague, Krakow, etc.
Not only are these cities easily accessible from major German air hubs such as Frankfurt and Munich, but most airlines have common-rated fares to smaller airports in eastern Germany such as Leipzig and Nuremberg. Granted those smaller airports generally involve taking an extra connecting flight, so your best bets if you want to combine a trip to Germany with to other countries in Central/Eastern Europe would be to fly to a major gateway such as Berlin or Munich, and then invest in a Rail Pass that covers Germany and the other countries that you want to visit. You can also play around with Rail Europe’s Pass Finder to explore all of your options.
Fares to Germany are so low right now, that they account for 99 out of the 100 best deals from North America to Europe right now in terms of Price Per Mile (PPM). I mentioned in yesterday’s blog that I’d be sharing some travel site tips with you, and for this purpose I can’t say enough about FareCompare’s Flyer Talk Fares.
As someone who used various GDS (Global Distribution Systems) professionally for years, as a fare geek I’ve found it frustrating being without them. Luckily FareCompare provides some decent tools for both professional and amateur fare geeks to analyze what’s in the market.
Of those top 100 PPM fares to Europe, the only one that isn’t to Germany is from New York to Moscow on Delta, which comes out to the bargain price of just $339 including tax for departures in May. Technically it’s ranked #98, although fares #78-#100 are all statistically about the same, coming it at just 3.6-3.62 cents/mile.
It’s a significant fare not only because it’s the only fare in the top 100 that isn’t to Germany, but it’s also the only one on that list that isn’t from California (69) or Texas (30).
Recent domestic fare wars have lowered the bar for what airlines need to charge from the West Coast to Europe, but I’ll focus on that more next week. For the time being, why is Moscow specifically the best deal in terms of PPM off the East Coast? The short answer is competition.
Up until the recent economic meltdown, Russia’s financial growth was booming, fueled largely by its vast supply of natural resources (notably oil and gas) and a robust commodities sector. And as Russian business boomed, demand for air travel to/from the country increased along with it.
For many years, Moscow was only reached by direct flights from the US on Aeroflot, which currently offers nonstop flights between Sheremetyevo International Airport (SVO) and New York (JFK), Washington DC (Dulles) and Los Angeles. Aeroflot also used to operate flights to Anchorage, Chicago, Miami, San Francisco and Seattle, all of which were discontinued between 2001-2003. The airline even flew trans-Pacific routes from San Francisco-Vladivostok and Anchorage-Khabarovsk, making it the only airline in the world to operate completely around-the-world service.
As for Moscow, most Americans traveled there via another European gateway such as London or Frankfurt on a European airline such as British Airways or Lufthansa. That begin to change a couple of years ago when Delta Airlines continued its European expansion with nonstop flights from JFK to Sheremetyevo, which were recently complimented with additional nonstop flights from Atlanta to Sheremetyevo.
American Airlines crashed the party last summer when it began nonstop service from Chicago (O’Hare) to Moscow’s newer and more comfortable (ie: less Soviet) Domodedovo International Airport (DME). And earlier this spring, United Airlines, which had previously been funneling passengers to Moscow via Frankfurt using codeshares with its partner Lufthansa, also began nonstop service to DME from Washington Dulles. US Airways has also secured traffic rights to begin flying to Moscow from its hub in Philadelphia. That leaves Continental as the only major US airline out of the mix, which is somewhat ironic considering that until recently they offered flights to the most international destinations from the US (they were recently surpassed by Delta’s aggressive expansion, and are now a distant second thanks to the Delta-Northwest merger).
Like everything else in the free market, airfares are dictated by the laws of supply and demand. Judging by the low fares to Moscow from across the country, not just New York, there appears to be a huge glut in supply as well as little demand.
When United entered the market earlier this year, they were offering fares from about $500-$600 from the East Coast, and about $600-$700 from the West Coast to Moscow, including taxes. Those were on par with what has been offered in low season (January-March) over the past few years, including 2007-2008 when oil prices (and subsequent airline fuel surcharges) were at record highs. Thus they were simply trying to tap in to existing demand, and weren’t doing anything to try to increase demand. That’s a questionable strategy when launching a new route in a healthy economy, and it’s downright stupid when trying to do so in a recession. It’s even more suspect to a market that has been so adversely affected as Russia.
As a result, fares began plummeting on all airlines, not just United. It’s not surprising to see Delta being especially aggressive in this market, considering how highly they value market-share in their ambitious international expansion.
So now there are deals to Moscow to be had from just about anywhere in the US, often costing much less than fares to what have traditionally been cheaper Western European gateways. For example, fares from San Francisco to Moscow are now as low as just $537 with tax, whereas fares from SF to Amsterdam start at $684. Singapore Airlines recently began nonstop service from Houston to Moscow, partially as a fueling stop en route to Singapore, but also as a way to capitalize on connecting two of the world’s biggest energy markets. As a result, fares from Houston-Moscow can be found for under $500, whereas fares to London, Paris and Amsterdam are all over $500.