It's a bloodbath out there

[Mattg]

I can't help noticing that international airfares out of Australia on full-service airlines have been extremely low lately. Last week Virgin was selling return tickets to Hong Kong for $499, and flights to the USA are now routinely available for under $800 return on premium airlines (such as Air New Zealand and Fiji Airways).

This is great for passengers, of course, but I can't help thinking that this is unsustainable. So many overseas airlines have gone out of business in the last few months alone, and others (Jet Airways, Asiana, etc.) appear to be heading in a similar direction.

Are sub-$500 fares to Hong Kong going to become the norm, or does something have to give?

 

[RooFlyer]

Come back when it's a Business Bloodbath and I'll be interested

 

[Renato1]

Yes, I've been noticing an awful lot of cheap fares lately on the European routes, or promotions like extremely slightly cheaper fares than what I paid Qatar, but coupled with really cheap four and five star accomodation in Doha.

I haven't seen such a flurry of good sales in March before - where the sale prices are applicable to most of the year, rather than just for narrow time periods.
Regards,
Renato

 

[Mattg]

Come back when it's a Business Bloodbath and I'll be interested

I fear that the day this happens is the day many airlines will go out of business (pardon the pun).

 

[serfty]

Come back when it's a Business Bloodbath and I'll be interested

It sort of is - those VA $499 fare are eligible for 1Plus - min bids $500 day, $550 overnight- so Business class not unusual from $800 one way.

 

[pauly7]

I can't help noticing that international airfares out of Australia on full-service airlines have been extremely low lately. Last week Virgin was selling return tickets to Hong Kong for $499, and flights to the USA are now routinely available for under $800 return on premium airlines (such as Air New Zealand and Fiji Airways).

This is great for passengers, of course, but I can't help thinking that this is unsustainable. So many overseas airlines have gone out of business in the last few months alone, and others (Jet Airways, Asiana, etc.) appear to be heading in a similar direction.

Are sub-$500 fares to Hong Kong going to become the norm, or does something have to give?

Corresponding VA international loads have also been very very sickly especially HKG so no doubt related.

 

[Haplo]

I think as the technology improves and plane consumes less fuel over time, airline will slash price as their cost would have gone down.

I think HK is unique in that there is so much competition on that route, so airlines are forced to lower the rate to compete.

 

[MEL_Traveller]

I fear that the day this happens is the day many airlines will go out of business (pardon the pun).

The $499 fares can still represent a healthy profit for the airline. You have to account for premium cabins, freight, frequent flyer program. Plus new, fuel efficient aircraft, and more seats closer together. And fuel that could have been hedged.

WOW went out of business because it had no premium traffic to support its ultra low fares. And why would you fly with WOW when you can fly legacy for the same price but get all the extras like bags, bar and food for free?

Holiday LCCs seem to work well..,. Thompson and Jetstar and the like - point-to-points focussing on distinct leisure markets, with good fleet utilisation.

 

[harvyk]

It's certainly not bad, but still not quite as cheap as 2009. I remember getting a CBR-SYD-SFO return for $700 on QF.
Better still, I was given an op-up to J on the way there (as there was no PE on the 747's quite yet). , and I was phoned by QF the day before I departed asking if I wanted to purchase a points upgrade for the trip home, which came in at 45,000 points from memory.