LOW AIRFARES FINALLY HERE TO STAY

The American Express Q3 Airfare Index has found that Australian domestic airfares have decreased by a dramatic 35%, since Virgin Blue first commenced operations in 2000.

Mr Jim Georges, Director- Head of American Express Consulting, Asia Pacific, says this is great news for travellers on the major Australian Domestic routes, as lower airfares are more of a permanent fixture than ever before. “Whether this will remain the case is somewhat dependent on the ability of Virgin Blue to stay in the market,” Mr Georges said.

Within the Asia Pacific region, Overall First and Business Class airfares increased 0.4% and Full Economy airfares increased 0.4%. Discount Economy airfares fell 3.5%, with Lowest Peak-Season and Off-Season Excursion airfares falling by 4.4% and 3.9% respectively.

“The Airfare Index for the whole of Asia Pacific has been impacted by Australia’s drop in airfares, prompted by the introduction of Virgin Blue and Impulse airlines, which has since folded,” said Mr Georges.

“Crude oil prices, which are another major factor influencing movements in airfares, have been less volatile and also slightly lower than earlier in the year, trading in the range of US$26 to US$28 a barrel. However, this improvement in recent months is yet to translate to a reduction in airfares around the region.”

The Overall index for the Asia Pacific region has increased rapidly over the past six quarters in First, Business and Full Economy Class. Business Class airfares have the fastest growing index, rising 16.5% over the past three years. First Class airfares have recorded the next largest increase of 15.3%. Full Economy airfares have been slightly more contained, increasing 12.1%. Discount Economy airfares are only 7% higher than three years ago. The Lowest Peak and Off-Season Excursion indices increased 5% and 8.3% respectively.

During the third quarter, airfares from Hong Kong, India, Japan, Singapore and Thailand were unchanged in most classes.

ABOUT THE INDEX

The American Express Asia Pacific Airfare Index is published every quarter as a guide to airfare changes and trends in the Asia Pacific region. It is produced exclusively for American Express by Access Economics. It tracks airfare activity in 165 city-pairs, all originating in the Asia-Pacific region, with destinations throughout the world. The airfares are surveyed from published airfares available for ticketing from the first day of the quarter.

As well as providing critical analysis of airfare trends in the region, the Airfare Index assists organisations to measure and keep track of their performance in terms of business travel expense management.