Backyard brawl: Airlines go for broke
SINGAPORE – Singapore Airlines has slashed its fares on long-haul routes, a move which is likely to fuel a price war that will spread like wildfire through Australia, Asia and onto Europe.
SIA, in response to a sales slump, has slashed fares to 82 overseas destinations, including the hotly contested kangaroo route between Australia and London.
The latest SIA fares to the UK from Australia are hundreds of dollars below fares charged by Qantas, Emirates and newcomer Etihad.
Singapore’s Tiger Airways earlier this week announced it would launch flights between Melbourne and Sydney on July 3 and would challenge Qantas low-cost subsidiary Jetstar on the route.
Tiger Airways Australia managing director, Shelley Roberts, said, “Melbourne-Sydney is one of the most popular routes in both Australia and indeed the whole world.â€
Tickets for Tiger flights between Melbourne and Sydney went on sale yesterday, with fares starting at $68 one way.
“We will be putting an extra 400,000 seats a year on the Sydney-Melbourne route,” Roberts said.
Also this week, Qantas spent $23.7 million to increase its stake in two Asian airlines, Jetstar and Valuair, and replace the Singapore Government’s Temasek Holdings with a new shareholder.
Analysts saw the move as part of a Qantas plan to beef up its presence in Asia and take on its main competitor, Singapore Airlines.
Writing in The Australian, Adele Ferguson said the new ownership structure put Qantas in a better position to forge a relationship with one of Asia’s biggest low-cost carriers, AirAsia, which was recently forced to cancel a plan to privatise after failing to get finance.
“The speculation is Jetstar will unite with AirAsia and use the low-cost model to expand in Asia. There are no formal merger talks with any parties but speculation is rife that when the time is right, Qantas will pounce,†Ferguson wrote.
Ian Jarrett
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