Economics 101: when cheap flights aren't cheap

For a country so avowedly capitalist it amazes me that so many people have no idea how the system works. This week we saw another bunch of economic illiterates who seem unable to grasp that most basic tenet: if the service you offer is more expensive and less efficient than a rival, people won’t buy it. BMI scrapped flights from Durham Tees Valley to Heathrow, causing much wailing and gnashing of teeth in the North East. The local paper, the Northern Echo, even persuaded an MP to waste Parliamentary time banging on about it.

So imagine I wanted to travel tomorrow from Durham Tees Valley to London. I haven't booked in advance so need a walk-on fare. There's a flight that takes an hour and a quarter for £184 pounds but I still have to get into London, which takes an hour and costs a fiver. Now imagine I decide to go by train: bearing in mind that we have the highest walk-on fares in Europe. This takes three hours and brings me into Kings Cross. Crucially, it costs just £133 for an anytime single ticket - £50 cheaper than the cheap flight, and once centre-to-centre journey times are factored in, only takes about half an hour more.

So why on earth would anyone who isn’t connected to the aviation industry want to fly from Durham Tees Valley? And why would any business want to pay more so one of their employees can spend an hour squashed up against the bulkhead reading a Tom Clancy novel and another hour rattling along the Piccadilly line into central London? Have newspaper editors and MPs lost the ability to understand the economic system they so support – or are they so addicted to kerosene that they want flying promoted even when its more expensive than other, less polluting ways of getting about?