Two UK airlines are experimenting with a new business model based on fixed one-way prices. Start-up Now Airlines says it has solved the software issues that delayed its April start and will join Air Wales in abandoning fluctuating fares set by increasingly complex yield management systems.

Several start-up airlines, such as Iceland Express, have abandoned promotional fixed-rate services once their yield management systems were in place, and several small European carriers are charging fixed rates for government-subsidised routes. However, Cardiff-based ATR 42 operator Air Wales claims its all-inclusive £49 ($78) one-way fare between Cardiff and London City airport is the first permanent fixed-rate operation. Air Wales managing director David Marshall says the strategy is profitable and that traffic analysis shows that around 80% of bookings are made less than two months before departure, by which time fares for alternative modes of travel are more expensive.

Meanwhile, privately funded UK start-up Now Airlines plans to fly its inaugural service from its London Luton base to Rome Fumiciuno in October using three 148-seat Boeing 737-300s. Tickets will go on sale next week for travel to nine European points grouped into six geographic zones. Each zone has a set price, plus "seasonal surcharges".

Source: Flight International