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Flying to Berlin cheaper than a return train journey to London - market failure or market success?

Jonny Clark

28th January 2016

You may have seen this story doing the rounds yesterday - a money saving blogger discovered that a flight from East Midlands airport to Stanstead via Berlin was cheaper (by about £7) than an equivalent train journey from Sheffield to his home in Essex. Now, Jordan Cox's story is quite amusing and his point is that he managed to get a cheaper trip going via Berlin which had the added benefit of allowing him to visit a city that he wanted to see. If you ignore any of the holes that may emerge (with regards to cost of connecting buses or the opportunity cost of the time taken) it does bring out an interesting question for A Level students of Economics.

Does this represent a market failure or market success? Is this a case of how deregulating the air-flight market (to increase competition) alongside improving customer information (through improved technology) has reduced prices? Or, is this a case of how allowing the UK train lines to be dominated by profit-maximising monopolies has lead to higher prices for train journeys and thus reducing the value of trains in comparison to using a plane?

Jonny Clark

Jon Clark has been teaching economics and business studies for over 25 years primarily in the Further Education sector. Before joining tutor2u, he was a senior manager at South Cheshire College in Crewe.

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