Airlines slash fares to tempt travellers
According to The Australian, airlines are cutting their cheapest local airfares as they try to convince consumers to spend on leisure travel.
Transport Department figures show best discount fares in November are 16 per cent cheaper this month than at the same time last year.
In the past two months the CPI-adjusted best-discount airfare index has hit its lowest point since July, 2005, although fares rose by 3 per cent from October to November.
By contrast, business class fares in November were 2.4 per cent higher than last year, and restricted economy fares were also up by 3 per cent.
Full economy fares, which dropped sharply when Virgin Blue’s fully flexible fares were included in the index in February, were down 17 per cent. The Bureau of Infrastructure, Transport and Regional Economics does not compare raw airfares but collects prices from 70 routes and couches them as an index to measure movements over time. The comparison includes taxes and charges.
A search of airline websites shows one-way fares as low as $45 for Virgin Blue on Brisbane-Newcastle, $29.95 for Tiger Airways on Melbourne-Adelaide flights, and $49 for Jetstar Brisbane-Newcastle.
The drop in leisure fares comes as analysts expect the gloomy economic outlook and falling dollar to result in a fall in passenger numbers when airlines release traffic statistics for October and November.
Low-cost carriers say their traffic figures are holding up and lower fares are designed to keep the market stimulated.
Jetstar spokesman Simon Westaway said competition in Australian skies was strong.
Jetstar’s traffic figures were holding up but leisure travel was discretionary spending, and low fares were needed to stimulate demand, he said.
“That’s not to say we are seeing the start of a downturn, but we need to create a stimulatory environment.”
“Demand is holding up, but these are obviously interesting times and consumers are being bombarded with a lot of negative sentiment.”
A Report by The Mole
John Alwyn-Jones
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