Should air fares be capped in the same way as gig tickets?
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The Man Who Pays His Way: Dynamic pricing delivers for airlines and passengers. Personally I can think of many places I would rather be on 11 July this year than Heaton Park in Manchester. But tens of thousands of Oasis fans are collectively spending millions on tickets for the first night of their reunion tour.
Viagogo currently has a ticket on sale that, according to the site, has a face value of £2,000. All yours for £5,000 – an uplift of 150 per cent – plus a “handling and booking fee” of £755 and the VAT that applies, taking the total to £5,906. Let’s call it three times the number you first thought of.
An outrage? The government seems to think so. Ministers are consulting on “introducing a cap on the price of ticket resales”. The consultation is “seeking views on a range from the original price to up to a 30 per cent uplift”. On social media, Derek Edwards contacted the culture secretary, Lisa Nandy, saying: “If you are looking at this then you also need to look at the airline industry?”.
The implication: airlines are capitalising on strong demand to charge outlandish prices. Mr Edwards then contacted me, asking: “Would you add your voice to this?”. Sorry to be blunt, but dynamic pricing – where the price is set according to aggregate demand – works wonders in aviation. I have no comment on gig tickets beyond observing that if there are willing buyers at almost £6,000 for an Oasis ticket, then the market will find a way to deliver. In a similar vein, if you will excuse the phrase, heroin is illegal but there seems a ready supply and an alarming demand.
