Domestic fares to rise

An American Express survey has revealed that Australia has escaped any dramatic rise in fares in the quarter to April as airlines tried to recoup costs assiciated with higher fuel prices, weak exchange rates and a downturn in the US.

Sales surveyed were tickets booked through travel agents and not discounted internet special fares. The survey has shown that the average domestic airfare probably fell. However, with rising costs these fares could not be sustained.

Airfares have not risen for 16 months, apart from GST, which indicates strong competition with the entrance of Impuluse Airlines and Virgin Blue.

Now with the demise of Impulse all eyes are on Virgin Blue to see if the Australian domestic market will be returned to a duopoly, and if fares will return before competition entered the air.

Australian Financial Review p5, 31/5/01

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