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Asia fares dive as airlines fight ferocious duels on Singapore

August 14, 2014 Aviation, Headline News No Comments Email Email

egtmedia59“Save on Singapore from $316 return, including tax.” That’s the headline of a newsletter emailed to consumers by travel.com.au earlier this week. 

It turns out that the AUD 316 Scoot round-trip fare to Singapore is from Perth rather than Australia’s east coast, but fares to Singapore from the east coast are also astonishingly cheap as airlines fight an intense and almost certainly profitless duel on the route.

Travel.com.au was advertising round-trip fares on Singapore Airlines subsidiary Scoot from AUD 456 ex Sydney and AUD 496 ex Gold Coast for bookings by the end of this month and departures anytime up to 30 November. http://industryclub.com.au/

Scoot itself was yesterday advertising Sydney/Singapore one-way fares from AUD 219 and business-class on the same route from AUD 499. Jetstar has one-way flights on the route from about AUD 344.

A volatile mix of aggressive low-cost carriers, soft consumer demand and overcapacity is putting strong downward pressure on fares.

Scoot’s rival AirAsia X, based in Kuala Lumpur is another keen player, having  increased its capacity to Australia by 40% over the last year.

Singapore Airlines, one of the world’s most respected carriers, profitable for each year of its 42-year history, is busy defending its home turf. SIA’s profits have dropped steadily over several years as competition grows fiercer. In the quarter ending 30 June the group recorded a 52% drop in operating profits.

Singapore Airlines cut back on A380 services to Australia in May this year, offering one daily A380 return flight from Singapore to Sydney rather than two. The other frequency is operated by a B777. From 25 October 2014, SIA will no longer deploy a A380 on its daily service from Singapore to Melbourne. SIA will probably redeploy the A380s on its new route between Auckland and Singapore.

For consumers, it’s a great time to travel to Asia – not just Singapore but more or less anywhere. THAI is keen to bring visitors to Bangkok because bookings are soft in Thailand, though the place is great and all is normal. That means competitive fares.

To Singapore again, travel.com.au also listed Malaysia Airlines round-trip fares of AUD 679 to Singapore from Melbourne or Sydney, Royal Brunei AUD 706, Emirates AUD 755 from Sydney and AUD 727 from Melbourne or Brisbane.

Webjet yesterday was showing Sydney/Singapore one-way fares during October of AUD 299 on Scoot, AUD 342 on MAS, AUD 393 on Garuda, AUD 404 on Jetstar, AUD 406 on Virgin Australia and AUD 407 on Etihad.

Some of those fares are very cheap for full-service carriers, though MAS obviously faces special challenges currently in filling seats.

The scene is reminiscent of the days back in the late 1980s when fares to Hawaii were sold at rock-bottom prices from Australia as US and Australian airlines virtually gave away seats on the route. Nobody was making any money and eventually one carrier pulled off the route, then others, and fares shot up.

That was long before cut-price carriers, in the modern sense, existed.

Written by : Peter Needham

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