Not so discount domestic economy airfares

Discount airfares on Australian domestic routes have increased, on average, by 10 per cent over the past year.
The upwards trend for discount economy airfares was reflected in an increase of 2.5 per cent in the past quarter on some major trunk routes, according to the latest American Express Airfare Index.
More restricted lowest peak and off-season excursion airfares increased by more than 5 per cent over the past year and the widening price gap between unrestricted and restricted airfares has seen business make more use of restricted airfares for corporate travel.
Mr Robert Tedesco head of consulting services Japan Asia Pacific Australia at American Express said that cheaper costs for change fees or re-booking penalties on restricted airfares compared to the cost of upgrading to a fully flexible airfare had also encouraged this trend.
The Index provides quarterly benchmarking data on trends in corporate travel costs in Australia and also the wider Asia Pacific region through a survey of 924 published airfares.
Mr Tedesco attributed the increased prices to high crude oil prices plus the cost of converting crude oil into jet fuel.
"The crude oil price remains high, generally trading over US$50 per barrel for 2005 to date and has been trading over US$60 per barrel in recent months. The 'crack spread' or cost of conversion from crude to jet fuel has further contributed to increasing prices," Mr Tredesco said.
"Historically the crack spread has averaged around US$5 per barrel but it more than doubled to US$11 in the first half of the year, spiking at more than US$30 during Hurricanes Katrina and Rita.
"Additionally, most Asia-Pacific airlines have imposed temporary fuel surcharges, which are additional to the airfares tracked in the Index."
Other results from the index were that airfares rose considerably in most classes of travel on routes from Australia as well as New Zealand and Singapore, amongst others.
First Class airfares from Australia increased 0.5 per cent in the fourth quarter of 2005 while Business Class airfares from Australia increased by 0.3 per cent, Full Economy fares increased 1.2 per cent and prices of Discount Economy fares from Australia were up by 1.8 per cent.
The American Express Asia Pacific Airfare Index is published every quarter and is the most comprehensive airfare survey in the region.
The Index is a useful tool to help businesses with their business travel expense management.


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