Thursday 1 November 2012

Price war in Australian skies !

It looks like the " bums on seats " war to attract airline passengers is hotting up.  Virgin has bought a sixty percent share in discounter  " Tiger " and is building a liaison with Singapore Airlines to make the right connection to the rest of the world.   This will face off against Qantas and it's tourist subsidiary - Jetstar, which are in the process of forming a working liaison with the growing airline giant -Emirates.

Maintaining a healthy bottom line has seen the demise of many big name international airlines.  Equipping an air fleet with the right mix of planes is an expensive business and the cost of jet fuel can surge unexpectedly. As things stand, Qantas has a firm grip on air travel within Australia and operates that at a profit, but it's overseas service runs in the red.  Jetstar is now competing with Qantas economy seats in taking tourists to overseas destinations and some people think a clear division between " discount " and  " business/luxury " services is under way.

Airline passengers are finding it rewarding to " shop around " when booking a flight.   There are so many " deals " on offer, usually accessed on the Internet that a lot of money can be saved by researching the best prices in comparison to just booking a seat on a scheduled service.

We have come a long way from the days of the old " two airline " policy.   That was a time when airline seats seemed to be under some sort of price control - and there was no difference in price whether you booked with Ansett or TAA.     Both were expensive, given that Australia is a big country with it's population centres separated by long distances, and not served by fast trains or any other type of fast transport system.

It seems likely that this coming ticket price war will be healthy for passengers wallets, but it will deliver a question mark to those who live in country Australia.   The big, high volume traffic routes are between the three major cities on the east coast.  Getting to those hubs from regional cities and towns is so far unresolved, and this raises questions about the future of services to Sydney's Mascot airport - which combines overseas and domestic travel with feeder services from the regional centres.

The question is - can Mascot accommodate this volume of traffic ?    Melbourne had a similar problem and solved it by upgrading Avalon as it's second domestic airport.   So far, no decision has been reached on the site of a second Sydney airport and when that is attained, it will probably be well over a decade of planning and construction before the first aircraft touches down on that new runway.

It must be a nightmare for the airline industry in trying to put together a master plan to integrate local and overseas travel, knowing that Australia's biggest city and the lynch pin in the east coast hub has a bottle neck that shows no sign of being resolved.

It seems to be a case of politics taking precedence over the needs of the Australian transport industry !


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