22 January 2009

LCCs seeing more Porsche and Ferrari business

SYDNEY - Business travellers in Australia are turning to low-cost carriers as the global economic crisis depends.

Declan Ryan, whose family pioneered low-cost air travel with Europe's leading budget carrier, Ryanair, told BusinessDay there would be a further flight from full-service carriers.

A board member of budget carrier Tiger Airways, Ryan said the "Porsches and Ferraris" were starting to park outside the Tiger terminal.

"The market is ripe for really cheap fares and I think business is going to move over to us big-time," he said.

"They might not brag about it too much, but a lot of CFOs around the country are saying 'where you can, fly Tiger'.

I think demand will continue to soften for the big boys but, for the low-cost carriers like Tiger, there really is an opportunity."

Tiger Airways group chief executive Tony Davis said Sydney could be one of its new destinations as talks with Sydney Airport continue.

"If conditions are right, the opportunity is right, the cost base is right, then, absolutely, we will fly into Sydney," he said.

The worldwide move towards lower air fares has also been quantified by IATA, which said a deepening recession in many economies had led to a year-on-year fall in premium tickets of 11.5 per cent in November, after a 6.9 per cent drop in October.

"Major long-haul markets saw the largest declines in premium travel during November, with a 17.7 per cent fall across the Pacific, a 9 per cent fall across the Atlantic and a 9.9 per cent fall in Europe to Asia travel," IATA said.

Figures released by Qantas reinforce IATA's assessment. In November, Qantas domestic passenger numbers slumped 7.4 per cent (or by 110,000) compared with November 2007. Qantas international traffic dropped 8.4 per cent ââ¬' 57,000 passengers fewer than November 2007.

By contrast, Qantas' budget carrier, Jetstar, recorded strong growth. Domestic traffic in November was up 11 per cent (67,000 more passengers) and international traffic was up 5.6 per cent (8000 more).

Source: The Age

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• LCCs Business Class
  
  

  Perhaps now all LCCs should offer Busienss Class for a slightly higher fare like NokAir has done.

  By Jaffee Yee, Thursday, January 22, 2009