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Where are domestic fares headed? Here are the clues!

June 22, 2018 Headline News No Comments Email Email

Australia’s busiest air route, Melbourne-Sydney, was the second-busiest route in the world in 2017 (up from fourth in 2016) and if trends continue it may eventually move into first position.

The fact emerges from the 4D Focus-Australia Aviation and Airfare Analysis, compiled by Flight Centre Travel Group’s (FCTG) 4th Dimension Business Travel Consulting division. It gives a good overview of fares and trends on the domestic front.

The busiest air route in the world, for the record, is between Seoul and the South Korean holiday island of Jeju.

Melbourne-Sydney grew to 10.8 million seats in 2017 – up 1.2% on 2016. 

Some key findings in 4D’s report:

Domestic Travel – CORPORATE Economy Class airfare benchmarking

(based on 2017 fare benchmarking against 2016 fares)

  • Domestic economy class price changes for tickets purchased through FCTG’s corporate brands ranged from a 1% to 9% increase on key routes.
  • Corporates flying the CBR–SYD route incurred the lowest increase with fares rising by 1%
  • Those corporates travelling on the ADL–SYD and HBA–MEL routes incurred the largest economy increases of 6% and 9% respectively.

Domestic Travel – LEISURE Economy Class airfare benchmarking

(based on 2017 fare benchmarking against 2016 fares) 

  • From 2016 to 2017 the average price of domestic economy class leisure fares purchased through FCTG’s leisure division increased by 9%
  • The biggest increase for leisure tickets was for the ADL–SYD and MEL–SYD routes where prices increased by an average 14% over 2016
  • Leisure economy travellers flying BNE–PER saw the smallest increase of 4%. 

BENCHMARK SUMMARY Economy Class

General manager of 4D, Felicity Burke, said the increase in inbound visitors and domestic tourism had reduced the availability of domestic seats, pushing load factors up to nearly 80% in 2017.

“The demand for domestic seats in the leisure space was very strong last year, which has also affected ticket prices,” she said.

The 4D report indicated a 2.5% and a 4.6% increase for corporate and leisure domestic fares during the next 18 months provided the carrier mix remained the same along with a positive outlook for the domestic economy.

Additionally four key industry themes have been highlighted for the year ahead:

  • Shifting airfares due to continued airline transformation, strong tourism numbers, solid load factors, a rise in oil prices and positive economic outlook.
  • Connected technology such as biometric systems are producing a frictionless international passenger experience, speeding up processing times and reducing airport congestion.
  • Air New Zealand and Virgin Australia ending their trans-Tasman alliance, and Air New Zealand, Qantas and Virgin Australia making tactical moves to increase market share across the Tasman; and
  • International airlines continuing to adjust their networks from and to Australia, and deploy new aircraft for an improved flight experience.

FAST FACTS 

MEL–SYD is the busiest domestic route (10.8 million seats – up 1.2% on 2016; 54,500 flights) and second-busiest route in the world in 2017 (up from 4th in 2016).

BNE–SYD is the next busiest Australian domestic route with 4.7 million seats flown during 2017

8.8 million inbound visitors into Australia during 2017 (+6.5% on 2016)

62 international airlines operated to/from Australia during 2017

2017 On-time performance: 

Virgin Network – departure 85.3%; arrival 83.4%

Qantas Network ­ departure 85.1%; arrival 84.4%.

Edited by Peter Needham

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