Australian travel industry fears fares crisis

13 Apr 2009

Travel agents in Australia are warning that discounted air fares especially in First and Business Class categories are becoming increasingly unsustainable, paving the way for a major crisis.

Graham Turner, managing director of Flight Centre, Australia's largest travel agency, told the Sydney Morning Herald that first and business-class seats were the worst affected and were "still not filling up" despite yields falling up to 50 percent.

Many international and domestic fares have more than halved in the past year as airlines try to counteract the substantial decline in passenger demand.

Qantas has been fighting a firece battle with Singapore Airlines and Dubai-carrier Emirates on the so-called “Kangaroo route” between London and Australia, with all the airlines slashing fares to bone.

Industry figures are concerned that once rates fall it will be difficult to reinstate them to previous levels.

Kenny Coyle

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