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Premium fares take a dive
TRAVELCONSUMERDAILY.COM REAL business class air fares in Australia have fallen by about 15% in the past two years and are now at their lowest for a decade, according to the air fares index published by the Bureau of Infrastructure, Transport and Regional Economics. At the bottom end of the market, "real best discount" fares driven by ferocious price competition after the arrival of Tiger Airways on domestic routes in 2007 are now roughly half their levels of a decade ago and more than 60% lower than the peaks of the late 1990s under the Qantas-Ansett two-airline system. Price competition in the business market is expected to intensify as new Virgin Blue chief executive John Borghetti makes a renewed push for more of the business market dominated by Qantas, which carries about 90% of the nation’s "suits". Borghetti has announced plans to segment the zones in VB’s aircraft fleet to create a separate "discreet" business class for the first time, as well as the premium economy class introduced in the past two years. The Centre for Asia Pacific Aviation’s Ian Thomas told the Australian Financial Review premium fares had been falling because of the fallout from the global financial crisis. "There’s pressure on premium travel in terms of volumes and airlines have responded to that by making their fares more attractive to the business-class end," Thomas said. "Qantas is making some adjustment for Virgin more aggressively into the business market domestically." Comment on this article |
