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Aussie dollar dives but much of the effect is positive

October 3, 2014 Destination Global, Headline News 1 Comment Email Email

egtmedia59The Australian dollar was this week approaching a four-year low against the American greenback.

Analysts blamed a mix of weak retail and trade figures on Australia’s part, and a resurgent economy on America’s part. If the dollar falls below USD 86.60, its 2014  lowest point, it would plunge to levels not seen since July 2010.

A low Aussie dollar is customarily said to be good for inbound travel to Australia and bad for outbound – though travel in both directions has defied currency fluctuations in recent years.

Qantas chief executive Alan Joyce is in no doubt about how the weak dollar will affect Qantas – and it’s all good, or most of it, anyway. Joyce told the Sydney Morning Herald a weaker currency would encourage more Australians to fly domestically and would increase Qantas’ competitiveness with other international airlines. It would also spur more foreign tourists to visit Australia.

“Because we have 65% of the domestic market we obviously disproportionately benefit from Australians staying home and travelling,” he told the paper.

Qantas has an increasing stake in the US market, with A380 services between Sydney and Dallas-Fort Worth having finally replaced B747s on the route – a change most passengers feel was well overdue. The change to larger aircraft will automatically increase Qantas capacity on the route by about 10%.

The Aussie dollar rallied a little yesterday after the release of better-than-expected building approvals data.

Written by : Peter Needham

Currently there is "1 comment" on this Article:

  1. stingforever says:

    …..wouldn’t fuel be more expensive when oz currency dive?…

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