Why is it cheaper from UK than From Aus?

[WillBlack]

Air Asia

Aus-MY-UK-MY-Aus
$A2.03 / £1.00; $A1 / 2.55 MYR

Economy:

1. Mon 05 Oct 2009 - Melbourne (MEL) to Kuala Lumpur LCCT (KUL), fare $A 232.00, charges $A 82.00; total $A 314.00

2. Mon 05 Oct 2009 - Kuala Lumpur LCCT (KUL) to London (STN), fare
499 MYR, charges 67 MYR, total 566 MYR; total $A 222.00

3. Thu 05 Nov 2009 - London (STN) to Kuala Lumpur LCCT (KUL), fare 809 MYR, charges 407 MYR, total 1216 MYR; total $A 476.86

4. Thu 05 Nov 2009 - Kuala Lumpur LCCT (KUL) to Melbourne (MEL), fare $A 125, charges $A 38.00, total $A 163.00

TOTAL $A 1,175.86

 

[straitman]

Where is this going :?:

 

[WillBlack]

To summarize Air Asia costs (2009/Oct):

From UK via MY to Aus return MY to UK: TOTAL $A 1,290.64

From Aus via MY to UK return MY to Aus: TOTAL $A 1,175.86


Outbound from Australia & return with Air Asia is $A 114.78 cheaper than outbound from UK & return.

Cheapest QA cost is $A 2069.00; Air Asia cost is 57% of QA cost.

 

[WillBlack]

Where is this going :?:

It is possible to get an air fare Aus-Uk-Aus which is cheaper than UK-Aus-UK.

Using the Yield Management Theory, does this imply anything?

 

[oz_mark]

It is possible to get an air fare Aus-Uk-Aus which is cheaper than UK-Aus-UK.

Using the Yield Management Theory, does this imply anything?

Possibly that Air Asia has more brand awareness in Australia than the UK, so they need to offer UK travellers a reason.

 

[WillBlack]

Possibly that Air Asia has more brand awareness in Australia than the UK, so they need to offer UK travellers a reason.

If the Air Asia fare is more expensive in Britain than in Aus then wouldn't positive brand awareness be higher in the UK or negative brand awareness be higher in Aus according the Yield Management Theory?

I suggest that it might be just that the difference, $A 114.758 / (($A 1,290.64 + $A 1,175.86) / 2) = 9.3%, might be largely the $A / £ exchange rate fluctuating faster than the fares are adjusted.

 

[oz_mark]

If the Air Asia fare is more expensive in Britain than in Aus then wouldn't positive brand awareness be higher in the UK or negative brand awareness be higher in Aus according the Yield Management Theory?

Good point, I was thinking back to front in my reply

I suggest that it might be just that the difference, $A 114.758 / (($A 1,290.64 + $A 1,175.86) / 2) = 9.3%, might be largely the $A / £ exchange rate fluctuating faster than the fares are adjusted.

Colud well be the case.

 

[WillBlack]

Totaling the charges:

Outbound from UK & return: $A 283.22

Outbound from Aus & return: $A 305.88

The difference in charges is insignificant.

 

[NM]

To summarize Air Asia costs (2009/Oct):

From UK via MY to Aus return MY to UK: TOTAL $A 1,290.64

From Aus via MY to UK return MY to Aus: TOTAL $A 1,175.86


Outbound from Australia & return with Air Asia is $A 114.78 cheaper than outbound from UK & return.

Cheapest QA cost is $A 2069.00; Air Asia cost is 57% of QA cost.

Congratulations, you have just proven that A+B+C+D = C+D+A+B. Air Asia only sells one-way fares, so of course its going to work out much the same. But for the discrepancy, look at comparing STN-KUL with KUL-STN and see the difference. Also compare KUL-MEL and MEL-KUL and see the difference.

As for comparing with the Qantas (QF) fare, you need to understand the difference with what you are purchasing when dealing with a LCC like D7. It will work for some people and not for others.

 

[WillBlack]

Congratulations, you have just proven that A+B+C+D = C+D+A+B. Air Asia only sells one-way fares, so of course its going to work out much the same. But for the discrepancy, look at comparing STN-KUL with KUL-STN and see the difference. Also compare KUL-MEL and MEL-KUL and see the difference.

As for comparing with the Qantas (QF) fare, you need to understand the difference with what you are purchasing when dealing with a LCC like D7. It will work for some people and not for others.

Wonderful relief to know that algebra, and arithmetic, still operate on to the same rules in the airliner world.

Now for your suggestion:


. comparing STN-KUL with STN-KUL

1. Mon 05 Oct 2009 London (STN) to Kuala Lumpur LCCT (KUL), fare
£171.00 ($A 347.13), charges £58 ($A 117.74), total £229 ($A 464.87)

3. Thu 05 Nov 2009 - London (STN) to Kuala Lumpur LCCT (KUL), fare 809 MYR ($A 317.25), charges 407 MYR ($A 159.09), total 1216 MYR total ($A 476.86)


. comparing KUL-STN with KUL-STN

2. Mon 05 Oct 2009 - Kuala Lumpur LCCT (KUL) to London (STN), fare
499 MYR ($A 195.68), charges 67 MYR ($A 26.27), total 566 MYR; total ($A 222.00)

4. Thu 05 Nov 2009 - Kuala Lumpur LCCT (KUL) to London (STN), fare
£121.00 ($A 245.63), charges £13 ($A 26.39), total £134; ($A 272.02)


. comparing STN-KUL with KUL-STN

Leaving STN charges ~($A 117.74 + $A 159.09) / 2 = $A 138.42
Leaving KUL charges ~($A 26.27 + $A 26.39) / 2 = $A 52.66


Conclusion: when travelling abroad, secret a £ 50 note on your person incase your airline accidentally lands in Britain (they seem to have the luggage fixed these days) and you need to bribe your way out.