Australia’s domestic airfares for business class and best discount economy class seats fell by about 10 per cent in October, new figures show.
While the measure of business class and best discount economy ticket prices were lower, the Bureau of Infrastructure, Transport and Regional Economics (BITRE) monthly measure of domestic ticket prices showed a marginal increase for restricted economy fares.
The business class index was at 83.3 index points in November, down 10 per cent from 92.8 index points a year earlier and 23 per cent lower than the peak of 109 index points recorded in June 2011.
Meanwhile, the volatile best discount economy category also fell by 10 per cent to 61.9 index points, from 69.0 points in the prior corresponding period.
By contrast, more stable restricted economy index was up 1.8 per cent in October from a year earlier.
The BITRE air fare series is a price index of the lowest available fare in each fare class, weighted over selected routes.
Lower airfares, as well as recent figures showing little passenger growth in the local market, reflected the difficult operating conditions Australia’s major airline groups have spoken of in recent times.
Qantas chief executive Alan Joyce said at the airline group’s 2018/19 full year results the corporate sector was flat, while the resources market was continuing to rebound. Meanwhile, there was also some weakness in among price-sensitive leisure travellers.
Virgin Australia chief executive Paul Scurrah said at the company’s 2018/19 full year results it was a tough economic climate with high fuel, a low Australian dollar, and subdued trading conditions.
And Regional Express has forecast a drop in profit in the current year as it battled what executive chairman Lim Kim Hai described as a harsh operating environment, as ongoing trade tensions between China and the United States hit economic growth in Australia and around the world.
“Rex will not be spared the full brunt of the global headwinds in the new financial year, and our profits could be eroded by 15-20 per cent as things stand,” Lim said at the airline group’s 2018/19 full year results.