02/03/2013

Airport water is overcharged

The morning radio programme asked Geneva airport why bottled water was so much overcharged: the answers were unconvincing!


In the morning radio programme "On en parle" last Monday, the Geneva airport authorities were asked why bottled water was so expensive when bought inside the airport. The example was given of a half litre bottle of water sold for just under 5 Swiss Francs: in normal Geneva shops a full litre bottle can be bought for as little as 50 centimes (one twentieth of the price in the airport shops!).

For their response, the airport chose the indefatigable spokesman, Bernard Stämpfli, to concoct a reasonable defence of the profiteering. HIs first weak response was that the airport was special in having longer opening hours than normal shops, and having the requirement that the assistants be bilingual (normally meaning that they speak some English!). Not surprisingly, this weak argument was quickly demolished by the programme presenters, who noted that prices in comparable places such as railway stations were much lower.

The next argument was that in all airports the shops traditionally have a larger profit margin on a few items, including bottled water. He also invoked the fact that the restrictions on taking drinks onto aircraft had led to the need for a secure production chain from the bottling to the airport. Again, this argument was demolished by the fact that prices in the open airport shops (before passing through security) were essentially the same.

The programme presenters then picked up on this concept of "traditionally higher profit margins". Bernard Stämpfli then told us what we already know, namely that part of the profits of an airport come from the shopping area (a shopping mall with an airport attached?). If I heard correctly, he implied that the revenue from these commercial activities amounted to about the same as the traditional activities related directly to transporting passengers.

As a consequence, Bernard Stämpfli said that each time that someone buys a bottle of water at an inflated price, he or she helps to keep down the passenger departure tax imposed by the airport. He quoted this departure tax as 21.35 Swiss Francs, stating that it is one of the lowest in Europe, whereas in neighbouring airports in Europe it is often more than double the Geneva amount. In consequence, the small effort of passengers buying bottles of water is largely recompensed by this low departure tax.

At this point I started thinking that I should do some checking on this: in my opinion Bernard Stämpfli sometines lets his enthusiasm get in the way of the real facts. The programme presenters also found this statement "hard to swallow", but had not been able to understant why, if other airports had the same profiteering from bottled water, were taxes elsewhere not the same as in Geneva!

Notwithstanding all of the above, Bernard Stämpfli stated that Geneva airport made a particular effort to avoid the airport becoming known as a price tourist trap. In most cases, the Geneva airport management put pressure on the airport shops to keep down the differential between their prices and normal town prices. He specifically stated that Geneva airport was without doubt the only European airport (that he knew of) which specified that there had to be at least one make of bottled water with a budget price of not more that 2.50 Swiss Francs for 33 cl or 2.80 Swiss Francs for half a litre. The programme presenters agreed that it was actually possible, by insisting and refusing the initially proposed bottes, to purchase these budget bottles.

At this point the Swiss price surveillance office was asked their opinion on the matter. The response was that there was nothing to be done, since the existence of different shops selling bottled water ought to provoke competition (I doubt that it has, given the quoted prices). The alternative response was to take an emoty bottle with you and fill it in a public drinking water tap (cost essentially zero!).

So after the end of the programme I did a little checking on passenger taxes in European airports. Since taxes may vary according to the distance flown and the class of the passenger ticket, I restricted myself to those for passengers in economy class flying in the Schengen zone inside Europe: this is undoubtedly the case for the majority of passengers flying from Geneva. The only airport that I could find which is more expensive (something like double) than Geneva is Zurich. Paris came out at 9.05 euros, Germany at 7.50 euros and Italy at 5.35 euros. Even in Britain, where people think that the taxes are too high, the value is £13! As a result, I wonder how aware is Bernard Stämpfli of these other airport taxes?

Finally, a little bit of simple maths. If about 6 million passengers fly from Geneva each year, then to reduce the passenger duty from 21.35 Swiss Francs to a round 20 Swiss Francs would require that the airport shops contribute an extra 8 million francs from their profits on the sale of bottled water. Although I do not know exactly what percentage of the overall shop profits has to be paid to the airport, I sort of doubt that this is realistic!

Would anyone care to comment on the prices that they have paid for bottles of water in other European airports?

16:30 Posted in Potpourri | Permalink | Comments (0) | Tags: geneva, airport, price, bottled, water, shops | |  del.icio.us | | Digg! Digg |  Facebook

The comments are closed.