Low fares are here to stay

[Mal]

Low fares are here to stay

Some airline commentators have been predicting air fares will rise as the Australian and global economies recover. But, after a year when fares to the US more than halved and domestic fares plummeted as the low-cost airline model continued to spread, other analysts believe consumers will continue to enjoy highly affordable air travel for at least another year.

While I don't believe everything written in that article, and personally believe that airfares will rise considerably in 2010 compared to 2009, the article has some good points.

Although, can anyone explain how a regular passenger could end up with a bill for $200 on ancillary services when flying Tiger? And no, that's not purchasing a replacement last minute fare on DJ/QF/JQ when Tiger cancels their flight/you're late etc.

Under this strategy, advance-purchase fares are very cheap but next-day fares are sky high and "ancillary" charges can triple the fare between Melbourne and Sydney from about $100 return to more than $300.

 

[odysseus]

Although, can anyone explain how a regular passenger could end up with a bill for $200 on ancillary services when flying Tiger? And no, that's not purchasing a replacement last minute fare on DJ/QF/JQ when Tiger cancels their flight/you're late etc.

Well, 20kg of luggage alone is $100 extra. Since they were quoting return prices, double that, and that's your $200

 

[oz_mark]

$25 each way for exit row seats, $30 each way for sports equipment, $70 each way for 30kg of luggage, $6 a sector convenience fee for booking via cc. Easy to get a few hundred bucks in extras happening.

 

[Mal]

Well, 20kg of luggage alone is $100 extra. Since they were quoting return prices, double that, and that's your $200

True - if you're stupid enough to pay at the airport, and go over the 15Kg for $25. But do passengers really pay $100 for baggage when they can pre-pay $20 and get a 20Kg allowance (or $35 for 25Kg or $70 for 30kg?)

Surely that has been a selective "pricing" type of $ extra. Looking at the fee schedule Tiger Airways , there aren't any that really surprise me or are exorbitant for a LCC.

 

[harvyk]

LCC are only cheap when you use them as a flying bus service. As soon as you start adding in extra's (baggage \ drinks \ dinner etc...) the price skyrockets, and can sometimes end up more expensive than their full service counterparts.

Infact I have been on a QF flight from MEL-BNE, it's price was $150 which included everything, the DJ flight left at the exact same time, it's price was also $150, except that included nothing. QF with everything included ended up been cheaper than DJ with nothing included!

 

[zzyss]

Bollocks. You watch the prices go up as the cost of fuel increases along with the economic recovery...

OK, so it might be a "fuel surcharge" but it's still a price rise.

 

[harvyk]

Negative much zzyss?

Yes, we will see a return to higher fares, but I would also not expect too much too quickly. The problem is that the airlines all need to raise them at roughly the same rate. Given at the cheaper end of the bus cheap fares are everything if any one airline was to raise it too much compared to the product they have on offer (and QF are trying, with their one difference being the A380) then the market will backlash and go elsewhere. Blinkered always loyal FF's will only take so many seats and they know it.

Just today they announced a 5% fare increase. This is still no where near as much as the discounting that has happened since this time last year.

 

[zzyss]

Negative much zzyss?

Hehe... I tend to think of it as pragmatic rather than negative, but the economic crisis has only temporarily helped us to forget that fossil fuels are a limited resource, and the trajectory that we were on just prior to the GFC was a reflection of basic supply vs. demand => demand is increasing and supply is decreasing.

An airline pretty much lives or dies by its ability to manage fuel supplies, hence a lot of decisions that affect pax factor this in: flight duration, baggage/weight allowances, surcharges, etc.

 

[JohnK]

Hopefully domestic airfares can remain stable for a little while longer. Airfare increases when commuting regularly can be a real burden.

Can't see the price of crude oil increasing too quickly. Back under USD70 a barrel end of last week.

 

[kiwitripper64]

The LCC will continue to offer cheaper fares and hopfully keep costs down but most here will continue to fly QF because company pays for flight, we get status points, lounge access and when things go wrong we often get looked after. So when a flight gets delayed on LCC its into the bar for a long time, and on QF its into the lounge and usually on next flight. Its these intangables that keep me comng back. And the ffp so we can do even more flying.