Business class airfares higher in June

written by australianaviation.com.au | June 20, 2016
Australia's domestic carriers at Sydney Airport. (Seth Jaworski)
Australia’s domestic carriers at Sydney Airport. (Seth Jaworski)

Domestic business class fares have risen to their highest level in more than four years, while best discount economy fares were softer in June, new figures show.

The Bureau of Infrastructure, Transport and Regional Economics (BITRE) monthly report on domestic ticket prices showed the index measuring business class airfares rose to 95.8 points in June, compared with 90.8 points in the prior corresponding period.

The result was the highest figure since the index reached 107 points in November 2011.

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Meanwhile, the BITRE measure of air fares for best discount economy was at 59 index points in June, down from 61.4 points in the same month a year ago

And the restricted economy index was marginally higher at 79.7 points, from 79 points in June 2015.

Australia’s two major airline groups Qantas and Virgin Australia have both made adjustments in the domestic market in recent times in response to soft demand, particularly among leisure travellers due to weak consumer confidence and the upcoming election.

In April, Qantas said it would cut capacity in the three months to June 30 2016, compared with the prior corresponding period, in response to the airline posting negative revenue per available seat kilometre (RASK – an industry measure of demand) in March and weaker-than-expected traffic over the Easter and school holiday period in most Australian states.

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At the same time, Virgin has announced the removal of between four and six ATR turboprops over the next three years due, in part, to the resources downturn, as well as the withdrawal of its entire Embraer E190 fleet.

The BITRE air fare series was a price index of the lowest available fare in each fare class, weighted over selected routes.

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