Discount fares fired up when Tiger stalled
Ratings agency Moody’s has indicated that Australian airlines are charging consumers higher fares because of Tiger’s scaled-back flights.
Moody’s said discount fares rose last year after budget airline Tiger was grounded and have remained at higher levels since restrictions were placed on Tiger’s flight operations.
Moody’s said domestic airlines Jetstar, Qantas and Virgin “have to date used the decrease in capacity resulting from Tiger’s operational disruptions as an opportunity to increase fares and improve yield”.
News Ltd quoted analyst Arnon Musiker, who said official statistics showed the average “best discount” airfare had fallen from 2007, when Tiger entered the market, until its grounding in June 2011.
But an index measuring prices suddenly jumped mid last year, at the same time as Tiger was grounded.
When the Civil Aviation Safety Authority allowed Tiger back into the air in mid-August, the regulator cut the airline’s daily flights from 60 to 18 with the number gradually increasing to 38 this month.
“What it does show is that a low-cost carrier such as Tiger …has a significant impact on ticket prices,” Musiker said.
Jetstar, Qantas and Virgin Australia have rejected the Moody’s claim.
Ian Jarrett
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